NDP And Ernst & Young Report Nail Nalcor for More Oversights in Muskrat Falls Going Over Budget

In response to the EY Interim Report, NDP House Leader Lorraine Michael says government should immediately engage the province's Public Utilities Board in overseeing the Muskrat Falls hydroelectric project.

The 9 billion dollar Muskrat Falls megaproject is being heavily scrutinized this week for a few specific oversights leading to the project being both behind schedule and well over budget. In fact, Natural Resources Minister Siobhan Coady has told reporters she’s very concerned about the situation.

The Ernst Young interim report highlights clear issues, like concrete pouring being behind schedule because of a poorly negotiated contract with Astaldi, the company responsible for building the powerhouse in the dam.

These contracts ought to have been based on square-meters of concrete poured, instead they’re paying in person-hours of work. As of December 2015, “the proportion of contract value paid to the contractor is significantly greater than the proportion of the concrete that has been placed.”

NDP House Leader Lorraine Michael says in light of the many concerns raised by today’s release of the Ernst Young interim report of the Muskrat Falls Project, government should immediately engage the province’s Public Utilities Board in overseeing the Muskrat Falls hydroelectric project.

“The PUB is responsible for the regulation of the electric utilities in the province to ensure that the rates charged are just and reasonable, and that the service provided is safe and reliable,” says Michael. “What better choice could there be to ensure the Muskrat Falls project is proceeding as it should and the investment of the people of this province is protected?”

Michael notes the Nova Scotia government passed legislation to ensure their Utility and Review Board had full authority over the Maritime Link project to ensure the province’s ratepayers were protected. Government instructed the UARB to ensure the Maritime Link project would benefit Nova Scotians.

“In this province, the government of the day tried to tie the hands of the PUB in its review of the proposed project … the current government, despite its claims of transparency and concern for people, is doing little more than the last one did. The Muskrat Falls project costs are spiraling up, and ratepayers in this province are on the hook for every penny.”

Michael says, “had the PUB been allowed to do a complete review of the project in the first place, we would probably not be in the financial crisis we are today.”

In addition to the concrete pouring oversight, only 50% of the work on the transmission line from Labrador to St. John’s is complete, putting that, too, well behind schedule. Even the EY review is $600,000 over budget.

On Nalcor’s end, vice president Gilbert Bennett is quoted in The Telegram saying they’re “unaware of the information EY is referring to with which to comment on the context or quality of discussions which occurred during meetings and briefings provided by project officials to key stakeholders.”

Likewise Nalcor CEO Ed Martin has said “Muskrat Falls construction contracts were unit priced and that those prices were fixed, helping to provide some cost certainty for the project budget.”

“I ask the Premier,” Michael said in the House of Assembly, “is Mr. Martin right and EY wrong, or is EY right and Mr. Martin wrong?”

Since the original announcement of the Muskrat Falls project, Michael says her caucus has been calling for greater transparency around the project’s contracts and terms, and that the questions and scrutiny from the NDP caucus  has “remained constant through four premiers and two governments.”

St. John’s Centre MHA Gerry Rogers demanded the Minister prove that it would indeed cost more to stop the project, than to proceed with it.  Rogers also wants to know the new estimate for consumers’ power bills. The most recent Nalcor estimate, last fall, saw electricity costs rising by 53% by 2020 and Rogers says government should release the revised estimate.

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