PINEHOUSE BUSINESS NORTH CESO ASSIGNMENT PINEHOUSE, SK

CESO ASSIGNMENT OBJECTIVES CESO was contacted by Village of Pinehouse to assess current construction management operations of Pinehouse Business North ( PBN) and advise on what is needed in order to become Cameco's “ Contractor of Choice”

PINEHOUSE VILLAGE SUMMARY Located 550 km north of Saskatoon Metis village Population about 1,400. In the last generation Pinehouse earned dubious recognition of “ Drinking Capital” of Canada. In early 2000 a new council was elected and after many years of futile policies of isolationism, which bore no improvement, decided it was time to stop blaming others for their social and poverty issues. They embarked on a strategy to join them rather than fight them.

PINEHOUSE BUSINESS NORTH Opened a construction company, Pinehouse Business North or PBN in 2007 with objective to create wealth and employment for community members. Primary strategy was to engage with Cameco, a large uranium mining firm with offices in Saskatoon and extensive operations in northern Saskatchewan. Cameco has 3 uranium mines about 300km north of Pinehouse. Has a policy to assist with economic development in north. Negotiated a Collaborative Agreement which yields $ 1 – 2 million dollars of work per year. Primarily low skill maintenance and environmental civil works.

CURRENT MANAGERIAL CAPABILITIES PBN operations started with basic maintenance work. Painting handrails, cleaning up redundant operations facilities, environmental remediation, hauling garbage and providing unskilled labour. Realizing that their local population lacked basic employment skills they set up a “ Labour Services” department, funded by Cameco, to identify local young people with potential and provide them with basic training to enable them to become employed. ( first aid, employment duties and responsibilities etc.) Opened an office in Saskatoon to provide administrative services staffed with a part time CFO, Corporate Controller and contracted accounting services.

CURRENT MANAGERIAL CAPABILITIES This still provided only limited employment opportunities and PBN wants to grow so they lobbied Cameco to provide larger projects with more skilled tasks. Tried Joint Ventures but found their role reduced to “ Passenger” rather than true partner. A positive development is the appointment of an Operations Manager. Alex is a highly talented and motivated local young man. The son of a prominent elder who has taken on the responsibility of planning, organizing and executing projects. Left school in grade 10 to work the drilling rigs. No formal management training. Plans to hire an “outsider” Project Manager are underway.

CAMECO PERCEPTIONS Met with senior Cameco executives in an informal session designed to be candid. Much sympathy ( love ) for PBN in their efforts to improve conditions in the Community. Main criticism is that PBN stubbornly insists on doing everything within local community resources rather than engage “outsiders”

CAMECO PERCEPTIONS Efforts to provide larger contracts generally failed due to lack of skilled labour and management infrastructure. High prices, limited equipment, weak cost accounting, unreliable financial management/statements, no expertise in providing materials and sub- contractors. Most serious complaint was that PBN is entirely dependent on Cameco, their one and only client. Quote: “Quit being dependent on only us”

RECOMMENDATIONS The assignment objective was to recommend ways for PBN to become Cameco's “Contractor of Choice” and given Cameco's perception of the limitations of expertise in Construction Management, limitations in labour skills and equipment added to the strong desire for reducing dependence on a single client the following was recommended: Maintain the Pinehouse operations and pursue all opportunities deriving from the Collaborative Agreement. Expand the Saskatoon office to the role of a General Contractor. This will encourage hiring outside expertise, provide management training and reduce dependence on Cameco.

RESULTS My recommendations were presented at a Board meeting on Sept. 27 with general agreement to gradually proceed. Shortly after Cameco, surprised all by dropping the dependence concern and offering substantial volumes of work. PBN decided to maintain current status quo and revisit recommendations sometime in the future.