Thursday, 22 February 2018

THE ANONYMOUS ENGINEER EXPLAINS FORENSIC AUDIT

Recently the Commission of Inquiry into the Muskrat Falls project announced that it had contracted the management firm of Grant Thornton LLP to conduct a Forensic Audit. What does Forensic Audit mean? What is involved? What will it accomplish?

Who would answer those questions better than the  "Anonymous Engineer". He was the first person to ask for a "Forensic Audit".  Having worked on the project he made this declaration: “I could not put up with falsifying information anymore."

The whistleblower played a key role in bringing to public attention the issue of "falsified" or "low-balled" estimates. His concerns were first noted on January 30, 2017 in a post entitled Muskrat Falls Estimates A Complete FalsificationA more detailed explanation of what had occurred followed with a second post - February 6, 2017 - called Muskrat: Allegations of Phony Cost Estimates.

The Anonymous Engineer's revelations were ones that neither the Premier nor the Minister of Natural Resources could refute, and which likely influenced the Government's call of the Public Inquiry. 
In this piece the "Anonymous Engineer" explains, in straightforward language, the process used by Forensic Auditors to conduct their investigations and to answer - hopefully - the questions posed at the outset.  - Des Sullivan

Guide to a Forensic Audit

Guest Post by the "Anonymous Engineer"

The words “Forensic Audit” have been heard over and over in Newfoundland and Labrador and many people might be wondering what it means. This is a process that will provide much needed answers to questions such as: who was responsible for producing lowballed estimates, who approved them, who falsified forecasts? Those questions, and others, have been asked many times; no answers were forthcoming. 

Initially, there was strong resistance to conducting an Audit at the highest levels of Government - from Premier Dwight Ball, Minister Coady and Stan Marshall, CEO of Nalcor. However, the Government’s opposition to an Audit/Inquiry collapsed under enormous public pressure as the consequences of several billion dollars of cost overruns and multi-year project delays were assessed, resulting in the ordering of the Judicial Inquiry.
The Commission of Inquiry, led by Justice Richard LeBlanc, has determined that a Forensic Audit is required to clarify the process of project approval and it is now underway.
I have prepared a guide to how a Forensic Audit is conducted and what it should achieve. Hopefully, this explanation will give the public a better understanding of why it was necessary for Judge LeBlanc to order the Forensic Audit as the first step in his Inquiry. 

What is a Forensic Audit?
In general, a Forensic Audit is an analytical process that is used to systematically and methodically investigate a variety of alleged wrongdoings. The wrongdoing may consist of a wide range of infractions such as falsified financial statements, the false reporting of higher profits, an understatement of expenses and losses or false information given to achieve a predetermined result. It might, for example, involve tax fraud, bribery, corruption or other kinds of misbehaviour or incompetences. These infractions can occur in any organization, whether private enterprise, a Government Department or agency.
The process of audit is exclusively impartial, non-political and fact based.
It examines the work processes and procedures, the decision making and approval hierarchy, the utilization of available information and the legitimacy of available information, that were the basis of the above mentioned infractions. Deliberate falsification of information, such as the suppression of unfavorable data, cannot be precluded. It might determine if a high level of executive pressure was applied on staff to come up with pre-determined conclusions.
The primary function of a Forensic Audit is to establish how decisions were made and who made them. In other words, it examines the approval process and confirms who was responsible for what.

The Audit Group has to develop work processes appropriate to the task, define roles and responsibilities, particularly the hierarchy of approval, examine the validity of the information used to arrive at conclusions, and determine if the conclusions were contrived.

It is important to note that the Audit group is brought in after the fact - after the damage has been done. Consequently they will conclude, after thorough analysis, where the practice deviated from the norm, how and why the infractions occurred, what the systemic failures were, and – a matter always critical - who is responsible and accountable.


How is a Forensic Audit Done?
The most critical function is data gathering and compilation.  If the information is still available, the Audit Group will access all the information available at the time the original analysis was performed. On a large project this means hundreds of documents need to be retrieved and stored.
The Audit team will then systematically goes through the historical data, critically examining the information and its validity. Large companies that specialize in Forensic Audits have data bases of “bench mark” data gathered from many previous similar exercises on which they have worked. If the data used by the organization in question is in conflict with the “bench mark data”, an investigation into the source of such data begins.

Questions such as these will be addressed: is the data current or outdated?  Is it appropriate to the circumstances? Is it supported by fact or valid assumptions; if so, are the assumptions documented? Who authorized the use of the data? Is the data “signed off” by a competent authority for use? Again, meticulous attention is paid by Forensic Audit Firm in establishing the validity of the data.
If an estimate on a large capital cost project is in question, such as the Muskrat Falls project, the unit prices used come under enormous scrutiny. Again the Firm will assess if the validation procedures were adhered to. If the unit prices used are not appropriate, the Forensic team will develop their own unit prices from appropriate data bases and rationalize the gaps. An investigation begins as to the use of inappropriate unit prices. 

In a large capital cost project, the degree of development of design at the time of estimate preparation is crucial. If the degree of development of design is low, then corresponding allowances need to be included for design growth. The Audit Firm will confirm if that accommodation was made. 

Another key function of the Forensic Audit is to establish whether the costs generated by the estimating tasks were subject to an “Executive Review.” This is a rigorous process that will include proof of sign off of the estimate by a nominated Executive; signatures and sign off dates are sought. It will ask if the published forecast was the approved forecast; if not, additional investigation follows.
The Audit team will investigate if a project “Risk Review” was done, examine the project “Risk Register” prepared and costed by the project team, and assess the cost of risk included in the final published price. If this process was faulty, additional investigation follows. For instance, it will want to know how the Risk Review produced by SNC-Lavalin was lost, and then found again four years later. 

In instances where the cost forecasts are suspect, the Audit group will confirm the published forecasts and the ones provided to the department that publishes them. If there is a discrepancy, it will be investigated. If the “working papers” are missing, then additional investigation follows.
The Audit team also investigates the development of the Project Construction Schedule. It will determine if the durations for activities were realistic and achievable. It will ask: are the completion dates derived from a realistic Critical Path Analysis or were they force fitted? If the durations are unrealistic, the Audit team investigates the source of the scheduling information.
The development of the budgets against the work packages. The compatibility of the scope of work and budget will be investigated.
The logic on which contracts are awarded will also be investigated. The Corporation will be required to explain to the Audit group the criteria for awarding contracts – sufficiency of budgets, understanding of the scope of work etc. The award of the contract to Astaldi will be of particular interest.
The Audit group will investigate the validity of the forecasts during construction. The enormous cost increase between September 2015 and April 2016, will surely warrant strict scrutiny.  The gaps between work done between by EY and Nalcor, when the massive overruns were first made public, will undoubtedly be investigated.

The multitude of analysis, investigations, and discussion of results require communication of the Audit group with the Executive Decision Makers of the Corporation. Those Executives are charged with the responsibility of explaining the gaps found by the Audit group. 

From the foregoing analysis it should be clear that the level of investigation and analysis of a thorough Forensic Audit is very intensive. This leads us to the next important question – what is accomplished?

What Does a Forensic Audit Accomplish?
The single most significant accomplishment of a Forensic Audit is that it restores clarity and transparency to a process that was previously obscure and opaque. Roles and responsibilities are defined as they should have been when the Organization undertook the task or tasks under investigation.
The Forensic Audit makes very clear who knew what and when, what decisions were made by whom and the consequences of those decisions. It makes specific accountability possible and reports who was responsible for the decisions taken.
It describes the circumstances of the work and clarifies all the assumptions on which the project was sanctioned and implementation was allowed to proceed. If, during any part of the process pressure was exerted on staff to come up with pre-determined results contrived by Executive Management, such a circumstance will be given illumination. The process forces accountability and assigns responsibility to where it belongs.

Most importantly, it will answer the questions that Newfoundlanders and Labradorians have been asking for years!!

Note:
It must be noted that Justice LeBlanc, as the head of the Judicial Inquiry, reserves the right to accept all of the findings of the Forensic Audit, accept some of the findings or accept none of the findings.

77 comments:

  1. Media quote from 2016:
    "The original capital cost analysis, estimates and schedule was very aggressive and overly optimistic and just didn't account for many of the risks that were known, or should've been known, at the time. And the analysis, finally, relied on high energy prices which were projected to continue with the rise."

    And I think this article from 2012 explains a lot in a few words as to what was really going on:
    http://www.cbc.ca/news/canada/newfoundland-labrador/shelve-muskrat-falls-mun-economist-urges-1.1141032

    So I would suggest that for those who were truly interested into delving into the details it was apparent where MF was potentially going financially.


    But more on point with the article, a common tactic used by a contractor is to know the approximate acceptable(to the owner) bid cost and work backwards setting the unit rates accordingly---commonly used in a ‘scorced earth’ scenario so you can effectively become a sole source for an isolated piece of work. Effectively you take a loss getting in the door but have a great advantage securing addition work at more favorable rates. This practice ties into my previous statements of contracting language and the cash flow status of contractors---the contractor was always in-control of the bus on this one.


    So my questions to AE, or others who are accounting and construction savy:
    1)if the owner (contractor) at the direction of the owner (Government of Newfoundland and Labrador) executed the owner’s desires to build MF; where does the blame lay?
    2)if the sub-contractors(Astaldi, Valard etc) are invited in an open bidding by the contractor (Nalcor) and implement a ‘scorced earth’ bidding process; where does the blame lay?
    3)if the owner (NL Gov) directs the contractor (Nalcor) to use dated data analysis techniques, is there fault?
    4)if the owner (Gov NL) accepts the sub-par work and explanations of the contractor (Nalcor) at face value and does nothing, is there fault?
    5)if the grossly-popular publically elected owner(Gov NL) sold the project to the voting public(who are not shareholders) based on what the people wanted to hear, is there fault?

    I would offer that none of 1-5 constitute wrong doing in a private setting, but maybe amoral in a public setting---but still not illegal in my estimation. I would also offer that unless it is shown that the contractor deliberately withheld information from the owner that no blame can be laid in either the Inquiry or the Audit---granted something can come from left field, but I am fairly confident that MF amounts to a inexperienced contractor doing the bidding of Government and both getting taken by savy subs.

    For these reasons, I don’t see the general public getting what they want from either the Audit or the Inquiry---though it will likely become a case study for some professionals. Granted, I would also suggest that most will simply read the Executive Summary of the Audit or Inquiry deliverable and not really comprehend or even care to read a good portion of the backgrounder.

    PENG2

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    1. PENG2, your item 5: project sold to the public based on what people wanted to hear:
      It was stated that power rates would rise to about 16.4 cents, if memory serves, and you suggest this is what people wanted to hear.
      The project was sold on the basis that this was least cost, which was MF, and that any alternative would cost more. We know that only 2 options were considered , not a proper evaluation of combination of alternatives that could have resulted in much lower costs. The false premise that MF was 2 billion cheaper than any alternative was what the public heard and believed.
      That a honest evaluation that offered rates of 12 or 13 cents would have been wanted instead of 16 cents.
      Granted, contractors and high rate union jobs, a small portion of the population, wanted MFs, but the general public was misled by false analysis and false assumptions, and a false proposition that least cost, which included but 2 options, not all reasonable options.
      There was no informed public on this. The public , most of the public was deliberately misled, as I see it. And the few naysayers were no match for the PR of Nalcor and MHAs.
      Winston Adams

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    2. PENG2, as far as I know, Customer Efficiency and Conservation was not, or not properly assessed as one of the alternative components for the Isolated Option.
      I have put out the numbers of 600 MW potential reduction, much of it economic, and no one has challenged that number.
      I have been monitoring the alternative to baseboard heaters, (the rationale for demand growth, needing MF) and reported results on UG at intervals.Initial results presented to the PUB prior to MF sanction.
      A caller to Patty Daley once said minisplits are no better than baseboard heaters when cold, because they constantly go into defrost and so no benefit for energy savings and demand reductions. Daley said he count not comment, not understanding this......(and probably not interested in finding out)
      Let me take this opportunity , through this blog, to invite you to come see this monitoring and results, now nearing a full year. I will assure your identity remains anonymous, as appears your wish. Are you interested? And you might ask why the power companies have not, and avoid doing such end-use research, before MF sanction and since.
      To date only 2 accepted invitations to see such data: Tom Johnson, and a reluctant Nfld Power. Declining the invitation, The Telegram. Having expressed no interest: Nalcor, and Nfld Hydro.
      Winston Adams

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    3. Winston, you certainly think a lot of yourself.
      Why would The Telegram, Nalcor or NL Hydro talk to you about heat pumps?
      Your numbers are YOUR numbers......what would they mean for anyone else as each house and conditions are different?
      You rant and rave on here going on and on about heat pumps like you are the only one who knows anything about them.
      Lots of people have heat pumps, others know the pros and cons of them too.....you are not alone.
      My new home has a full ducted heat pump system and my detached garage has a mini split.
      Should I get The Telegram, Nalcor and NL Hydro to my place as well?
      What would I tell them if they came? Heat pumps are more efficient....duh, news flash.

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    4. Anom, how much monitoring have you or anyone done?
      What the mfg says in not what you get, subject to climate, and monitoring shows that.
      Most important, our power companies say ALL minisplits will fail during our cold winter months, and so no contribution to peak demand reduction on the grid......guess you never follow the PUB hearings on this. You should be outraged at that.
      Ontario now offers 20,000.00 for gnd source and 7500.00 toward minisplits. Here we get 10.00 toward a programmable stat that increase morning peak loads.
      Agreed each house is different, but best practices optimize performance, if getting less than 60 percent saving on the area served , it is not best practice.
      End -use research is what power should companies do.....but not here.
      Efficiency and conservation was not part of the alternatives considered to MF..........why?
      You prefer to guess at performance? Performance is all over the place when best practices not done.
      I proposed to Nfld power monitoring for a variety of houses, and contractors adopt best practices.......they are not interested.
      The numbers are not just my numbers, but numbers monitored by the minute, for ambient temperature, for weather from fair to blizzard, high RH when fog or rain, to very dry, all affect performance and can see and quantify the effects.
      Tell me who else is doing this?
      Seems to bother a few that I do this, and report on it.
      Heat 1000 sq ft for 300.00 a year.......not important with power bills about to double? You must be a Take Charge scallywag, I wonder?
      Winston

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    5. About mid Dec, with moderate temp about -8C, someone said " get back to us when winter temp gets to -15 C
      Here is the kwh since April 2017; 318, 230, 162, 86, 66, 82, 164, 290, 436, 485 (to end of Jan) so 2319kwh, and $231.90 at 10 cent rates, and includes some summer AC.
      The charts are more impressive than numbers, if one is technical.
      Have hit -12C a few times , and -13.6 lowest so far, and not fully loaded the unit.
      What's in your wallet , anom?
      I seem to be rubbing a nerve, inviting a Nalcor engineer to look and comment. PENG2 seems to be technically, and knows there were better alternatives, so I expect him to be interested, and may offer some advise as well.
      Winston

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    6. The data you provide on this blog is very informative, and you have recorded it great detail. I have asked you a few specific questions on your data, and especially about Attis mounted as opposed to outside mounted, and you have explained to all bloggers that care to read in very precise and professional terms. And your response to an:1452, was very professional and to the point. Much more so than my response to him on your behalf, and appreciate UG is his wisdom not publishing it. But I basically said to him where is your data, lay it on the line, for all to see, before you critize another for posting their date, plus a few othe choice words, lol. You have also mentioned that you monitor two quite different houses, in different locations. How does those date compare???

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    7. Anon at 14.52
      What Winston thinks of himself is irrelevant. His point though, not so much. Saying a heat pump is efficient as you say is a given, how efficient however can only be determined by consisently monitoring conditions and corresponding draw and output. Wide sampling data is the key to proving this. I would submit that the output of the heat pump systems does not vary widely regardless of structure. The benefits are still realized and power draw reduced as compared to using baseboards. I am sure someone in the bowels of confederation building probably has some stats touting the benefits of heat pump technology but the powers that pushed MF chose to ignore. Didnt fit well with the end goals. Good on you Winston for trying to open some eyes.
      Anon you say you have a heat pump and a mini split in your house. Did you install these because someone told you they are the way to go or did you research the units themselves and compare brands based on impartial reviews (not company provided). I would hope you did the latter and educate yourself as to best practices for optimizing your investment.

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    8. Yes, most reports on the 1000 sq ft house, but also monitored a 4000 sq ft house , R 2000.
      Payback for 1000 sq ft about 5-6 years, for R2000 about 10 years, as they already save more from higher insulation and air tightness. Payback will be half that stated, if rates double. Peak load savings, if comparing baseboard with setback, say 3kw savings on a small house and 14 kw on a large house. So as to savings on the grid in winter, this tremendous reductions on a large house, but proportionally not so great on energy savings. For the home owner , billing savings is paramont, for the grid , and capacity at holyrood, and the size and cost of gas turbines etc, the peak load reduction is the priority, or should be, to avoid rotating outages, and reducing transmission losses etc.
      As to anom at 14;52 ., he may be a contractor who is satisfied with his knowledge, but I wonder if he can even do a heat loss calculation.
      As to defrosts, from midnight to noon, typical 1 defrost for attic mount, 8 defrost for outdoor mount. Defrost puts thermal stress on the coils, so fewer defrost saves energy and increases the unit life expected. Has Anon counted the defrost cycles on his system, or how much energy is consumed by a defrost cycle?
      Do I know it all? No, still things to learn, and to share. And if anom can add knowledge........pass it along.
      There are many fine engineers who do good sizing and selections, for commercial buildings, but who can afford to hire an engineer to do this for a house? That is where best practices can assist HVAC contractors, and inform home owners, so end up with a good result most of the time instead of hit or miss. Nfld Power says expect 40 percent saving on heat. 65-75 possible, and less than 60 not so good, and 40 may seem good to some, and may be typical from averaging many not so good installations.
      Tom Johnson (a MF promoter) flipped his opinion after seeing what is achievable, spent an hour assessing my data last year, and then condemmed the power companies for failure on efficiency and conservation................but too little , too late for Tom, he was gone.
      The Telegram....in 2012, said "absolutely" would look in to this, prior to MF sanction.........but never did. Guess they did not want to mess up Take Charge ad income?
      Nalcor and Nfld Hydro.........they above all should have been keen on this, if concerned about ratepayers and least cost to consumers. Nfld Power....shareholder dividends at play, when selling less electricity. So, I refer to them as Scallywags, which is not unfair, I submit.
      Hope to get charts etc in a formal way to UG sometime soon, before rates double, when the s..t hits the fan for power bills.
      And yes, I rant and roar a bit, like a true Nflder, as the song goes. Perhaps too few rant and roar?
      Winston

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    9. I think we need a dedicated heatpump thread. There are heat pump comments scattered through every post in recent years. We could post relevant data in the comments and someone could tabulate it and update the original post.

      From my personal experience with a multi-split over the last four years I can state two things: It will cut your winter electrical bills (total kWh for everything) in half. The caveat is that you need to have enough heads to heat most of the house - and at least one on every floor. You also have to be very careful to turn off all the baseboards and floor heat. When I was sloppy with this, I ended up with only 20% total bill savings.

      The second point is that there is no auxillary heater in the multi-split and it has never failed to output heat on the coldest winter days in the St. John's area. This is despite it being an older Daikin model and not one of the newer cold climate models. Furthermore, the newer CO2 pumps from Japan are even better and will eventually replace the existing technology, providing both heat and domestic hot water. Heat pumps are here to stay.

      I have only had one episode of no heat from the heads. There was a wet snow storm that managed to cause an ice shell to build up around the back of the unit, and there was a space of half an inch between that shell and fins. The defrost couldn'd do anythig about it so I had to pour hot water over it to let the air through. This was the same storm that had snow and ice stuck on vinyl siding and window screens for a few days. To avoid this I would have to remove the protective grate behind the fins.

      On a different note: Someone told me that there was a trial project a few years ago to install a remote disconnects on domestic electric hot water heaters. After the trial, they just left the equipment at his tank. I found that interesting because I have never heard of it before and would like to see the results. I assume someone tried the system at one point and cut out all the tanks to see how many watts were removed from the grid. This is common in the USA -- except that they cut out air conditioners in the summer to prevent brownouts. In return, you get a $4 monthly discount on the power bill.

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    10. So, your total bill saving is winter, go from 20 to 50 percent, using best methods. And as this is total bill for those months, it suggests actual heating component saving is greater tan 65 percent.
      Also Nfld Power did a study of switching off hot water tanks, spending whether $300,000 or $500,000 of our money for nothing. sid the savings did not justify the expense.
      And they did a similar study about 20 year before that, for the same thing, and arrived at the same conclusion, and left the components at the houses. So, they PRETEND to being doing worthwhile things, and no one questions it, and they rob us of part of our money for IMPRUDENT spending, that should have never been accepted by the PUB. But no one notices, all kept quiet. Scallywags! And did you ever see the Telegram report on that? If not , why?
      Winston

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    11. While heating is important and the new technologies - such as heat pump and mini splits - a big deal for private residences, the expensive power will impact the population well beyond the monthly heat bill. Nearly everything in our lives will be impacted as retailers, manufacturing,storgafe and logistics companies will have to pass the higher costs along. Beyond our monthly residential bill, there are the other implicit higher costs in everything we purchase.

      There is also the ramifications to current and future industry that we have here. Going forward, who is going to set up shop here? We will never have the opportunity to attract any industry where power is a big part of its cost drivers.

      Than there is equalization. I stand to be corrected, but I don’t think our electricity bills are in any way factored into the equalization formula. Compare what we pay to Quebec. Compare our future bills to Quebec. In NL we just react to what comes before us. The politicians here don’t get it. It’s all about creating value for our residents. Quebec subsidizes consumers and then collects equalization. They plan and strategize. (Think about Churchill and how they even avoided the 40 year natural expire on any contract). In NL we just react to what is put before our face.

      500,000 ppl. One of the most resource rich parts of the world and we just keep messing it up.

      Let’s blame the stun politicians - but these ppl only reflect and act on the will of the ppl.

      It’s not the lack resources, it’s not any one messed up project - we have always had a leadership problem here in NL.

      We can get out of the latest major mistake being MF. But it will take leadership. It will take big picture planning. It will take knowledgeable ppl being placed in a performance driven environment. It’s gonna take getting out of our socialist ways and accepting a govt cannot run a business. Hello.

      I have no access to govt treasury info, or Nalcor info. But I can tell you what I know: the substance of planning for MF and Nalcor going forward at this point includes:
      1. What is the incremental cost of borrowing for the province? What will our actions and MF / Nalcor planning mean for the ratings into the future. How much will the impact on those rates costs vs. What options do we have for offloading. What will the return to the public markets/ Private equity required? (There are plenty of different financial products that we can play into to get the right offloading mix, timing and impact on our outstanding debt.
      2. How will this effect equalization and negotiations going forward including the accord. Don’t let the premier and province go in to the negotiations without a plan behind them. Plus don’t let the feds know all our planning. The central govt see us as just little minions needing guidance - we can use that ignorance to our advantage. Play off the MF loan guarantee. Go a bit Trimpish during his bankruptcy- they are on the hook as well. Plan around privatizing the Nalcor assets and around the taxation into the future of the privatization restructure (the power to tax is important.
      3. Put the unbiased and real experts on these files with real experience.

      We need real leadership to make any change. That leader will start with BELIEF - the ppl need to believe there are major issues. Then it takes a big picture plan. The leader needs to be at least knowledgeable enough to know how to seek out and attract the best. Third and most important is Culture. The other 2 can only be executed with the right culture. Ppl will follow great leaders and accept the plan. These leaders will attract the best. This is the momentum of change this province needs. The plan will come from a great leader creating our great leaders and attracting high level management talent.

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  2. 2 revisions to my above posting for clarification or bad typing:

    1)1)if the contractor (Nalcor) at the direction of the owner (Government of Newfoundland and Labrador) executed the owner’s desires to build MF; where does the blame lay?

    Also note that in my paragraph describing the 'scorced-earth' bidding process we are not necessarily talking the same contractors/owners relations as in the 5 pts following.

    PENG2

    PENG2

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  3. PENG2, if I read you correctly, the only way a forensic audit will accomplish anything is if it can be proven the contractor deliberately wiltheld information and/or deliberately falsified information. In other words the owner (Govt) cannot be held to account??
    Does the word "Contractor" include Nalcor or just those companies employed by Nalcor??. If Nalcor is considered a part of Government, they also cannot be held to account??

    Also, would you hazard a guess as to how hard the shredding machines have been working and how many overseas accounts have been set up?

    Whether you want to admit it or not, this whole MF debacle should have been halted a long time ago. At least the stench wouldn't be as bad.

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    1. Wayne @ 9:51 & WA @ 9:45:

      I am not sure how you infer I am saying the Audit wont accomplish anything. Like the Inquiry, I just don’t expect the public will get what they want; there will be a finding and those that do a deep-dive into the backgrounder will gain a lot of info, others that read only the summaries not so much.

      I have always said stopping MF wasn’t an option once the contracts were enacted(reasons above and previously provided). The only viable option to halt MF was when it was in the planning stage---unfortunately at that time as WA noted above the PR machine took the uninformed populace in and gained their approval. Unfortunately we elected the government and in a round about way by electing them to represent us, and thus gave them permission to keep us 'less informed'.

      I don’t think Nalcor is a part of government in a legal sense---thus I label the government as the owner, Nalcor as the contractor and subcontractors accordingly. I don’t think there will be an avenue to hold the subs accountable as they simply took advantage of a poor bid package and inexperienced contractor/owner combination---nothing unusual or illegal there that I can see.

      I do think that there will be a disjoint made between the populace, the Government, Nalcor and sub-contractors during the Inquiry and Audit. These distinctions will be important legally, unnoticeable to the public and will make all the difference when analyzing the project.

      PENG2

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  4. Consider the bright young faces, marching on the establishment politicians south, scaring the begeebers out of us oldies, (Peckford's generation), who have totally threatened the very lives of our grandchildren' future. The Inquiry is a waste of time. Let the enlightened under 40's take control of their own futures; they will have to take responsibility for the mess, corruption, lies, guns, crime, wars, etc. and make the best of what is left. The analogy I am speaking of is that Canada's NRA is the greedy corporatists, who run gov. sponsored mega dam projects, rape and pillage of natural habitat and resources for personal gain, etc. Listen to the words in the Eagles timely song, "Last Resort". There, I feel better already, Up the new generation Z!!

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    1. The youth are the lucky ones. They can just leave and never look back. It's us mid-lifers (40-60yr. old) who are screwed- the captive audience. Established homes that will be worthless and captive for GovNL to pick our pockets dry. Probably have to work until we die too (free Heat at work will be one of the "Benefits").

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    2. If the youth are gone and the elderly are too feeble to vote, perhaps the 40-60 year old trapped generation is the one that will be forced out of desperation to organize a new party to fight for independence and either negotiate better terms of confederation (own our oil and fish) or follow iceland's lead, default and start over.

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    3. Regrettably, it is this age group, (40-60), who are largely responsible for the bad choice political regimes that exist. Being in the over 80's, we see the folly of Tory mindedness, colonial mindset, "trickle down economics", corrupt banking, offshore accounts, wars, killing indigenous, killing refugees, US hegemony to which Canadians have signed on, heavy dependence on fossil fuel industries for employment, etc. The hope is that the school age kids, arising in Fla, and our own grand children can bring the change society is in need of.

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  5. Lawyer up boys, lawyer up...

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  6. https://goo.gl/Gg9np7 STOP the WHITEWASH by Nalcor and the Governments of NL Canada. Good Information clearly tells us another whitewash is being put in place, right out in the open, before our very eyes by Nalcor and the Governments of NL and Canada.

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  7. Here is my take on "where does the blame lie to build muskrat", and the relationship between owner (govt) and contractor, (nalcor crown cooperation). Prior to sanction there was no daylight between owner and contractor, they were one and the same, but leading up to sanction they returned to their own corners, as equal participants, and after scantion, nalcor became an entinity unto itself. It was bigger and more powerful that its creator, they had created a minister a Frankenstein, totally out of control, even its own control. The owner announced it was world class and nalcor believed it. Nalcor ran the show, totally out of control. The govt. did' even know what questions to ask nalcor, they read no reports, they just knew enough to try and keep the populace happy, nalcor reigned supreme. There was probably a courier service between them to usher papers to be signed by the minister or his deputies, but they didn't know what they were signing, nalcor was the expert, and God. So both to blame, the govt. mainly for creating the minister that got out of control.

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  8. Then they ran out if money, and they had to go back to the owners (govt.) for more money. The govt. had changed, despite their best efforts to prevent it, but the writing was on the wall. Then Eddie told ball I want unfettered access, with no owner involvement, ball balked, and Eddie resigned. Then then new arrangement, Stan the man, ball and the boondoggle. Justin, upalong advanced them another 4 million or so, so full speed ahead, finish strong, get her done boys, was the cry. Yeah, get her done....

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    1. Sorry, but I don't read what I write, before I hit send, so monster, becomes minister, and billion becomes million...etc.

      Delete
  9. Of course, all of that, also supported by engineer consultant reports, as John Smith used to say , tens of thousands of pages. If not world class themselves, at nalcor, it was bolstered by such consultant reports, to seem credible. (We never saw a good honest professional consultant report until Liberty got hired by the PUB, and let us know that of "culture of Nalcor" and their many imprudent decisions as to DARKNL)
    False assumptions was the order of the day,with Nalcor and their consultants(and Nfld Power too, as to forecast methods) and false assumption admitted since by Stan Marshall, and PENG2.
    This project would have gone no where without such reports and false assumptions. As PENG2 says, the Angle Saxon Route was an engineering non starter. But start it did.
    I have advocated here that getting to these false engineering assumptions, is a big part of what this inquiry needs to address. PENG2 seems reluctant to have the Inquiry look into engineering aspects.
    It seems the forensic audit does have leeway to assess engineering assumptions? Is PENG2 fearful of doing that? Is Nalcor fearful of doing that? Easy to just blame the politicians, but the ethics of engineers is at question just as much. Let the sun shine in.
    PF

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    Replies
    1. I was never a fan of Grimes, but there were other options:
      http://www.thetelegram.com/business/muskrat-falls-too-small-by-itself-grimes-132762/

      There is plenty of MF related info easily found by simple Google searches, I started saving them in the 90's---never knowing when I might need a good reference.




      PF:

      I have no concerns---you say I 'seem reluctant' to assess the engineering side, but no I am not. However, I would suggest that a distinction will need to be made clarifying the differences between engineering decisions and those that were at the prerogative of the contractor/owner---ontimes there can be any number of reasons to legitimately avoid the most efficient course of action.

      As you say, just consider the route---there was plenty of engineering and economic info to avoid this alignment, but it was pushed anyway. Likewise for executing MF anyway---there were studies under Grimes that advised against it for engineering and economic reasons.

      What I don't want to see is a witch hunt---the details will be most important to unravelling this, will most take the time to fully understand or simply take the gang mentality on?

      PENG2

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  10. The fall out of money wasted on MF is affecting our health system, especially our mental health system, where forensic analysis is now used to decide an important case. Indeed, our ex- Justice Minister, Jerome Kennedy, back to his day job as defense lawyer , is using forensics to advance his argument. And rightly so.......but so is the Crown using forensics, to argue the opposite ........and will justice be served?
    AG

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  11. Two months already gone for the Inquiry. What have we learned so far? Where is the Progress Report? Hold the Judge to account. Where is the Schedule and List of hearings? What is the makeup of the Forensic Team? What is the current Estimate for Allowance for Contract Changes? Disputed Claims? Estimate to Complete? Substantial Completion Certificates? Overall Project Completion? "Strong Finish" Status? Open the process Stan?

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    1. Robert:

      Check out the Berger Inquiry---similar in scope to what LeBlanc is taking on. I don't think we will get any feedback until late in 2018 at best. I am not entirely sure it can be completed thoroughly by end of 2019.

      I know a lot of people are getting up in arms about the schedule---but the Inquiry team have upwards of 40yrs history and documents to amass and review if they approach this in the right manner.

      PENG2

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    2. Robert, do you get the sense that PENG2, a Nalcor engineer, may be a Nalcor plant on this blog to counter opposition of the real naysayers? Maybe Bruno had him sized up from day one?

























      Delete
    3. PENG2, You seem to be an insider on the contract files. Do you get an opportunity to overview the monthly contract status reports? Are you permitted to divulge to public view the contents? What if anything has changed under Stan's era, regarding reporting to the Owner, (Gov. Ministry), the project file contents? Do you know of any incidents of project file leaks? etc.

      Delete
    4. I get the feeling he is a plant too, but not sure on what side or for what reason, maybe just to keep the conversation going..but a good contributor, and sometimes contreversally.....lol

      Delete
    5. PENG2 had indicated working 10 hrs a day? Yet he posts often during normal working hrs,so is this an indication of the new efficiency under Stan Marshall, or someone to sway opinion on this blog? Part engineer, part PR work?
      While seems to be technically savy, yet is more into politics than one might expect, all DW and EM fault, no fault with DB or SM. Afraid of witch hunt!. Sounds just like Trump, but there they are closing in, 5 or 6 charged with crimes already, aiming to get "on tract" to justice.
      PENG2 fully endorses Leblanc.......no need for submissions to interpret terms of reference, not needed as Leblanc has wide discretion, hedges his opinions on investigating engineering assumptions and inputs that were false, saying lots of reasons to overrule what is most efficient.......take more than 2 years to report, 40 years of history to review.......for F..ks sake, why not let PENG2 write the final report and have Leblanc sign it, and PENG2 never submitted a single recommendation to Leblancs request for submittals......I bet, but full of opinions here on this blog. Just don't add up. He has his notes locked away..........what of value do they contain? Will he make them public after another 25 or 50 years? Often sits on the fence or lets pass any question that makes him uncomfortable.
      That's my take on PENG2......at least we know which side of the fence the engineer calling for the forensic audit is on. PENG2, not so much. What do others think?

      Delete
    6. Anony @ 19:54:

      Not sure what your point was, as most doesn’t seem to have much of a backing in facts, just seems like a 1x reader with no knowledge of my contributions here, normally I wouldn't address it, but I will try to satisfy you.

      I have never passed opinion on LeBlanc one way or the other---all I have said is the Inquiry TOR is fine provided LeBlanc uses a broad interpretation of the terms and that he was not limited in the was most claimed; when the ToR were announced most said that they were too limiting and LeBlanc couldn’t call for an Audit etc. In reading several of the submissions to the Commission liked here, apparently most also now believe a wide interpretation is required and we have an Audit. For the Audit, I have said most of the public won’t get what they want, I also said that LeBlanc had the ability under the ToR to do a broader financial analysis than an Audit---and this broader analysis is what should have been done.

      I have never refused to answer a question, I will not however push out an answer without knowing the facts and making an informed answer, and most of the questions posed here require a good pre-analysis to avoid being wrong---sorry if this seems as if I am sitting on the fence or passing, but my track record has been proven to be very good when making predictions/assessments in the business/engineering arena.

      I have said on more than 1 occasion that a comparable Inquiry is Berger—for those that haven’t bothered to look, that is the Mackenzie Delta Gas Pipeline Inquiry, it covered items with a similar community of interest as to MF. Justice Berger produced 45,000 pages of text and about 285 volumes over 3+ years. This is what we are asking LeBlanc to do—I just am not sure he can do it in the time allotted, even though most are claiming the timing is a political decision; I don’t think so.

      Think what you will of my opinion, my occupations etc---but at least try to have some factual backing of your presentation. I have presented some details of my employment, but have never indicated that I punch a time clock---I am a paid consult engineer and have Nalcor listed as one of my clients among others, so a standard work day doesn’t apply to me.

      PENG2

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    7. Wonder PENG2, from what you say, you are partime geotech engineer for Nalcor, but do you get paid or get compensation of any type to comment on this blog?

      Delete
    8. I see no real significance of the respected Berger Inquiry with what is required with Muskrat. A competent PM Study group with access to the project files, could prepare a 50 pager, summarizing the variances, giving the prosecution all the evidence, if any to lay charges. Any more embellishments is a waste of time and $$.

      The more important activity now , and resource management strategy is how does NL recover its future Energy Plan? Get with the Program!

      Delete
  12. Some are FURIOUS (CBC report) about giving some fish quotas to Indigneous Canadians, which includes Innu from Labrador. Grand Bank plant which operates year round will lose some quota and employees.
    Our Gerry Bryne says,jokingly, why not tell cell phone companies and banks that they too need similar partners as part of the reconsilation process.
    Recall that the Peytons, in the 1760s, moved in near the mouth of the Exploits, and took over the salmon fishery, with Beothic shot on sight if they showed up.After 250 years , we still get furious that the First Nations should get compensation and allocation of resources.
    Maybe part ownership of cell phone and bank companies is actually not a bad idea? 60 percent of those on the Labrador coast have food insecurity, a study showed last year. The final Beothics starved to death. Muskrat Falls with methylmercury will impact their food supply further. The George River caribou herd has gone from 900,000 to about 9000 in number, so almost no capacity for hunting.
    Lets not forget our history. and whose territory we occupy, and how we got it.
    Winston Adams

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    1. I had commented on this blog a few months ago, as to investing vs gambling, noting i was achieving annual returns on about 15 percent. I had mentioned having invested in Canadian Banks and BCE and a few others.
      Being now a senior citizen, I have contemplated maybe a foundation aimed to benefit our indigenous citizens in this province, and maybe a transfer of shares to fund that.
      Ironic to see Byrne suggest, as a joke, cell phone and bank companies help with reconcilation.........., given I have been thinking of doing just that. Would Gerry serve as a director, if asked?
      INVESTOR

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  13. I am more than ever convinced that the decision to build Muskrat Falls was made long before there was any technical justification to support the project. Don't forget, the project was vehemently supported by Newfoundland's Napoleon - Danny Williams. Who in their right mind would contradict the Emperor, unless they wanted to go home with their heads in a basket.

    The conclusion comes first and the evidence is forced to fit. Only the forensic audit can confirm.

    James Pearce

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  14. The first fact that should be considered is:
    Why was the Muskrat Falls Hydro Project ever considered in the beginning.
    The next fact is that the existing hydro systems were designed and built to allow modification of up to at least 100% any time in the future at little or no cost.
    This remark can be backed up by a study the the Government of NL requested of Shawmont Nl Ltd in the 70's. (public knowledge).
    Expanded Hydro sites on the Island would have been the cheapest in house solution to any required utility power. This option should have been implemented some time ago when the Holyrood Diesel Plant became an everyday necessity.
    The next least cost option would have been the 600MW Avalon Wind Power Project which was partially approved prior to the election of Danny Williams on Nov. 23, 2003. This 600MW Wind Farm was proposed by Labrador Coastal Equipment Ltd (LCEL)and was to be installed on the Trepassey Barrens, 57 miles across country from the Holyrood Diesel plant sub-station. The previous government was aware of the proposal and the newly elected PC government was quickly made aware of the offer to provide 100% of the power that was being produced in Holyrood at No Cost, Risk or Liability to the province for 4.5 cents per KWH. This was prior to the Muskrat Falls Project ever being considered. LCEL also made this presentation in 2006 at the public meetings that were held at the Holiday Inn in St. Johns. This event was hosted by Ed Byrne, Min. Natural Resources, Tom Osbourne, Min. of Environment and officials from NL Hydro. They agreed to give every consideration to this option in the future before any final decision was made for other options. That was the last time that this wind power option by LCEL was ever allowed to be given any consideration.
    The Muskrat Falls Project was forced through by one individual and only that one individual, Danny Williams, even though Cathy Dunderdale succeeded him by proxy after he resigned and the project was sanctioned. A very timely decision by Williams to relieve him of that inevitable decision & responsibility. It can obviously be proven that Muskrat Falls was the most costly option and to top it off, the project was located in a WAR ZONE where NL's ability to lay claim to the water or the land was at least the most risky part of the deal. A handful of individuals walked away with a landfall of money to show for this act of contempt and are still doing it to this day.

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    1. Gerry , with due respect, how can it be fact that we could increase our island hydro power by 100 percent without any cost?Sounds like a miracle. And extra transmission lines to deliver it without cost? Are you smokin that wacky backie?
      And 600 Mw of wind. Our peak now can run to 1750 Mw, and Holyrood may run to near 500. So with Holyrood off, that leaves 1250 MW say......and you propose 600 MW of wind!
      Now that is about 33 percent of a 1750Mw load from wind, assuming full capacity of your wind is available.
      Here is the problem;
      1. Wind now is about 2 percent , only 54 Mw.
      We could probably ramp up to another 200 Mw of wind , so 254 of 1750 peak, otherwise our system goes unstable, and all shuts down in 1 second.
      2. Since wind now is only 43 percent capacity on average, even if 50 percent on average, it means we need 1200 Mw wind on average to get 600Mw needed.
      3. Some days the wind is light and not even 50 or 25 percent capacity is available. So, Nova Scotia, I think uses about 17 percent of the wind name plate rating as firm power. So 100 Mw of wind is considered 17 Mw. For this reason, while wind will deliver much more than 17 percent, we need considerable backup capacity to wind, whether thermal oil fired or battery, or pumped storage.
      Make no wonder Nfld Hydro never took it serious. And Ed Bryne, was he the guy convicted on the MHA spending scandal? Not a good reference, me thinks.
      And Gerry , do you sell 4 kw solar/battery systems for $50,000.00 that even at that cost is insufficient to supply heat or hot water, or is that another Gerry Skinner's web site?
      When will the Harris Centre hold an event that explores sensible power supply, and demand side management options, as to what might have been , and what should be for the future?
      Winston Adams

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    2. You may be too tough on Gerry, although you say with due respect. Now , I am no expert, but Gerry has said that from experiment, that the wind blows consistently onto the barrens from st. Mary's bay, af an evelation of some 50 to 100 meters, so if this wind is constant and consist acne, then maybe your numbers are not correct. Maybe it can produce wind power 24/ 7, throughout the year. I am not stateing that as a fact, but seems Gerry was claiming that a few years ago. So that wind that blows in Germany or the us of a may not have the same consistance as the trapessy barrens. Remember we are one of the windest places on earth , next to some of the South American cities. Just saying, how do we know, without those recordings being made. Put up one windmill there to see what happens.

      Delete
    3. I may have been to hard on Bruno with his solar ideas, and now I miss him, as he has many valid comments......but whether solar, or wind, or even heat pumps, if the evidence don't hold up, then expose it. We don't need more boondoggles.
      One can see from Torbay airport records, that wind there drops sometimes below 5 km speed. Higher elevations gives higher wind avg speed, but existing one has a 43 percent average capacity, Maybe Gerry has 1 year of data recorded?
      But as wind does vary, smaller wind farms, say 50 MW ea, scattered makes more sense, as when is low at one place it is higher at another and then more constant wind power to the grid.
      Since my comment , a link from UG I viewed last nite show they considered 300MW the max Nfld grid could handle. So, I suggested 254 MW, a bit less than they say possible.
      Yes , even if wind 24/7, it varies, sometimes 100 percent of capacity other times very low.
      That there is no concenous on what is a practical amount of wind(as to public perception) that our isolated grid can handle is ridiculous since 2012, this being tossed around...some saying as much as 600 and 1200 Mw. Liberty or GE would answer that in a few days, and put it too rest.
      Of, course, as Bruno would say, now with battery storage, it expands wind capability, but at a price for storage, that makes it less attractive than one might think.
      Games are being played with the wind issue. If the answer is blowing in the wind,then also look at WHO is blowing the wind.
      Think Beothic etc.and their track record.
      Please , STOP THE BOONDOGGLES, from which ever source.
      One one think there is enough expertise at MUN to settle the wind issue........but MUN is compromised by LOCKE, and all seems beholden to government and Nalcor, so little or no credibility, me thinks.
      Winston Adams

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    4. Noooooo....I don't want to see anymore boondoggles either, and yes the answer may be blown' in the wind. Yes, a sciencetific fact, that wind normally increases with elevation as does temperature, except lower. But there can be exceptions to that, the prevailing winds, mixed with different land and sea configureations. And the wind durations can only be determined by observations like the airport as you mentioned. But would you say the winds are exactly the same on Cabot tower. As at the airport. I think they could be different, never been on signal with no wind, now of course I am not there every day. But think there is an animated mounted there, and if recording wind speeds on a graph or electronically would be interesting. A couple years ago they put a lot of effort into the light shining on the tower, but maybe not the wind speeds. So wether there are times on trapassey Barron's where there are times with wind speed below 10-15 km, I don't know, at elevations of 50 to 100 meters, only constant recordings could prove or dis prove that, and not even Liberty would know that unless they did the observations. But maybe as you suggested, small wind farms scatter around the island may give more constant power, but longer power lines too. But trapassey barrens is just 50 km from where the power needs to be transported.

      Delete
    5. To Gerry Skinner: A suggestion
      A minisplit ( I think you are familiar with them) ....can heat a 1000 sq ft house , using in winter about 1000 watts at night and about 600-700 watts in the day, (best at 11am to 3 pm).
      Now at daytime, 4 or 5 solar panels can give 600 watt, and so drive the HP during peak day solar hrs, and partial a few other hrs. Another 600 watts could heat the hot water via a water HP.
      With some excess hot water storage, the HPs would seldon operate at night, and so achieve the higher day efficiencies. Such modest solar combined with HPs is practical as cost effective. A kicker is that , if a grid failure, the solar panels can produce significant space heat and water with little use of a back up generator.
      Instead of 50,000 dollar systems that few can afford, this is much lower cost and practical.
      Your thoughts?
      PS....Google Flatrock Passive , he is using water storage from wood burning, as he likes wood, and has a source close by, and a woodworker. But he will get the most of the little sun we do get, by capturing and holding via thermal mass, and south orientations....... using many good ideas for houses of the future.....1st type house in Nfld. But most all houses are old stock that will be around for another 50 years.
      Winston Adams

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    6. To anom @15;05
      I love the idea of wind generators, and do not see them as a eye sore. What a splendid thing compared to the smoke stack and pollutants from Holyrood.
      From my house,in the town of Logy Bay, I can see Cabot Tower, and Red Cliff, where the Americans military structure ruins still exist.
      In come countries, a town like Logy Bay could set up a co-op, erect 2 or 3 or more generators and supply the town with cost effective electricity, and sell excess to the grid. Here , it is illegal, and one is forced to pay what Nalcor will need to pay for the boondoggle.
      TO be sure, these high elevations have a better wind profile than the Airport. How much better, monitoring can tell you.
      Yet a look at Torbay Airport data shows some of he coldest winter days with lower wind speeds and milder days with higher wind speeds, opposite to the ideal need.......but such is the nature of wind.
      I sometimes picture our rural towns, many with adjacent wind generators, with loads near the source, and little transmission loss.
      We have accepted a monster of a monopoly that is Nalcor, that hinders competition and development of a rational wind industry here. Any site requires monitoring data, and wind should be built in increments, not mega projects that go bust. Technology keeps improving and more cost competitive. Be wary of those looking for government hand outs.
      About 1991, seeing a giant wind farm in the distance in the USA, I drove miles to get near it, and admire it, and wondered why few were rotating. Those were early models and had many mechanical problems. The technology had much advanced. But intergration with hydro generation puts limits on how much we can use. If 15 percent vs 85 percent for hydro of total, then now we are 2 percent, and part of the boondoggle was not to use more local wind.
      I am a believer in wind energy. It is a wonderful resource wasted, and should have had 2-300 MW before now.
      With questions whether MF will ever operate, the wind issue may not be dead. A 5 MW unit on Signal Hill.... a wonderful idea, sound much better than importing coal power from NS.
      WA

      Delete
  15. Some may recall my reference to the RED LINE that was to appear on the daily power status reports ........showing imports from Nova Scotia, of dirty coal power.
    Stan Marshall and Nalcor made much of this historic event, and importance to Nfld.
    Sure enough , this is showing up on the reports on the PUB website. Seems to be the 108 Mw indicated by the media.
    It started 7;30 pm Feb 19, continued all day on the 20th and then terminated 10;30 am on the 21th. In total 39 hrs.
    Based on saving 2 cents per kwh over Holyrood costs, and 50,000.00 a day, so 81,250.00
    Another calculation suggests maybe only 40 percent of that figure was saved....so 32,500.00
    So per person, that amounts to a saving of 6.5 cents.
    Did they run out of coal to burn?
    Now Ed martin promised gravy, which Stan said was merely 50 million a year in exports from MF, while opertion and maintenance costs something like 120 million a year....so where's the gravy? Ed Martin got 6 million worth.
    Now Stan focuses on the BIG PICTURE, not on MINUTIAE .......the big picture including importing coal power. The gravy from that, so far ..6.5 cents per person.
    There was a time when a nickel went a long way, but now, gets you half a kwh of electricity here. A 5000 kwh is not unusual for a winter Feb power bill, some 500.00. So we have saved so far about 2 kwh per family of 4.
    This would be 4/5000 = 0.0004 of a Feb bill reduction from the NS import.
    Some one better check my figures.........as this seem like 'minutiae" to me.
    When will the red line appear again?
    Winston Adams

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    1. Right on the NS power was A PR stunt, working in overdrive, making headlines, and the silly, brave local media lapping it up. HEADLINES first power through maratime link, to nfld, then we all stop , but thought the power was going the other way, no NS can give us cheaper power, omg...I got it all wrong....the buggers. As soon as the temp went down in Ns they baulked and said we can't sell you power, you don't need. But later on now when the weather warms up, we can, even if you don't need it. That sounds good, not sure for whom, but gotta get the power moving. Spin some wheels, spin some pr, spin something, as long as we can spin....to get the big spinning picture. The laughing stock of the planet.

      Delete
  16. This is my first time reading this blog and the accompanying threads. Most of the articles and a lot of comments seem well thought out and candid.

    For me, I do not get the point of the inquiry. Exactly what will wallowing in the past do for our present circumstances and the future? Besides maybe makimg a few executives and politicians look bad - what will be the outcome? Do anyone believe the following will take place: A long report will ensue, everyone will make changes to ensure it never happens again? Really? We are dealing with politics here. Have we ever, in our history, learned from our past mistakes? Is it even possible within the current political system? Other than giving ppl something to gnaw on for a while - exactly what will a inquiry do for our future as a province? Actually, all this reminds me is the sequence we always follows after a major mistake, that keeps putting us back in the same old position. There are numerous alternatives to our current path. It will involve the public markets and maybe even private equity. It will also require a whole lot of major attirude adjusting in this province - all starting with the belief major change is needed. (If comments stay open I hope to return and list)

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    1. If an inquiry will serve to destroy the reputations of those responsible, or if the kids or grandchildren of those responsible consequently become the targets of bullying at school or similar wretched fate... then the inquiry may serve as a deterrent for those who might contemplate trying to pull the same stunt at some point in the future.

      So in that regard, the inquiry is more than justified.

      Delete
  17. It would appear that Finance Minister Tom Osborne "manned up" with regards to making public the severance payment made to ex-NLC head Steve Winter.

    http://www.thetelegram.com/news/local/ex-nl-liquor-corp-boss-issued-60000-severance-188602/

    Kudos to Minister Osborne for doing the right thing by taking a page from Andy Wells' playbook... "You may not like the truth, but at least you'll get the truth...".

    On a completely unrelated note... the vile scourge of nepotism... if it exists... in the public service cannot be abided in a cash-strapped province teetering on the edge of bankruptcy, especially when things have hit rock-bottom to the extent that government feels compelled to run a survey of ex-pats to find out why they left this horrendously mismanaged rock in the first place... as if NL politicians need to run a survey to determine that... they need only to look in the mirror...

    http://vocm.com/news/one-newfoundlander-weighs-in-on-why-she-left/


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  18. This inquiry is a waste of tax payer’s money. One only has to look at the history of this province and before that the country called Newfoundland to see what a dismal performance we have had in development. Let’s start with the railroad in which a steel and gravel ribbon was built across the island to service what? Most of the population was located on the coast and up until the 1980’s royalties were paid out from mining and forestry to the Reid Company for its construction. Moving along we then courted the Americans for military bases. Thirty years later they were for the most part closed and whole communities were first expanded and then left in limbo. We then built chocolate factories, a hydro dam at Churchill Falls, linerboard mills, oil refineries, dozens of fish plants (for the most part they were stamp factories to get people off provincial welfare rolls and onto federal EI-and thus clear of the provincial budget) and of course greenhouses. Next it was tourism. Marble Mountain, the Rooms, B7B’s, hotels you name it were given incentives for what is the most part a seasonal industry with EI top ups.
    The offshore you say? Who can forget the PIP grants where 80% of the cost of exploration was paid for by the federal government and later John Crosbie had to beg for $1.8 Billion to complete the disastrous GBS for Hibernia after the Gulf pull out-a development concept for the offshore that was also a boondoggle considering the amount of royalties that were relinquished for a few construction jobs.
    After that we had the expansion of the civil service and Muskrat Falls which for the most part speak for itself. Add to that the lowering of our much needed tax base and you have a financial boondoggle in the making.
    And what off the future? There is none now since the young people are leaving in droves with only a few for whatever reasons one can imagine are staying. The province will soon be nothing more than a collection of abandoned out ports, head strong civil servants and old age pensioners with dilapidated industries that send profits to other areas of the world leaving the citizens in dire poverty. The cost of this inquiry will only add to an already massive debt.

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    1. Tis....not only she's gone by's, she's gone....she was gone before the beginning...lol. And the inquiry will be the straw that sinks us....who would have taught it....

      Delete
    2. "The cost of this inquiry will only add to an already massive debt."

      Perhaps so... but nevertheless, it is of utmost importance to formally identify who the responsible parties were... they MUST be outed or else they will have gotten away scot-free.

      Delete
  19. Several excellent articles in the 'independent.ca", an interview with David Vardy, and another by Hans Rollsman about Stan Marshall(excellent description of Marshall, and his poor performance at MUN last week, and another about an ecology non profit being founded (we are 20 years behind NS and their 4500? member group, who had input into their energy plans for conservation and efficiency),
    The black and white photos of Vardy, in various poses are terrific.....our local Socrates, a wise elder. He also talks about our democracy deficit. Too bad Bruno has given up on this blog, as his greatest contribution was on the subject of feudal system here. He must consider us to be a lost cause......
    Seems the INDEPENDENT has come back stronger, after journalist Justin Blake being charged by Nalcor, (if only Dwight had the balls of Blake, Muskrat would have been shut down). Ball and Nalcor uses the RCMP to harass, and charge and jail the local naysayers. Justice is blind? Wink, wink.
    PF

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    1. Here are the links:

      http://theindependent.ca/2018/02/21/how-to-win-over-a-gullible-crowd-stan-marshall-talks-about-muskrat-falls/

      http://theindependent.ca/2018/02/23/what-we-can-learn-for-the-future-david-vardy-on-the-muskrat-falls-inquiry/

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    2. Look, Ball doesn't know his arse from a hole in the ground... he's on a high-speed train running out of track and he doesn't have the calibre of leadership required to avert catastrophe... he's just holding on for dear life like the rest of that crowd of inept fools... just look at their countenance when they hold press conferences... Ball, Coady, Osborne.. the lot of them are like deer caught in the headlights... they're utterly lost, totally out of their depth... afflicted with the same colossal naiveté as Kathy "this-is-not-a-crisis" Dunderdale.

      You think the arse is out of this place now? Just wait another 10 or 15 years... the Muskrat refugees will be heading across the Cabot Strait in armadas reminiscent of Dunkirk.

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  20. I wouldn’t want kids to be bullied for the actions of the parents. Charges or any sort of civil suit will not come from a inquiry. It will mean nothing for our future. I know the former CEO of Nalcor has been the target of lots of ridicule and had his career ended. I am not defending anyone, but the head of a crown corporation must answer to govt. - the defacto CEO and chair is the premier of the day. As for the politicians: they are not gonna get in any sort of trouble and you cannot embarrass them. They will pass the buck and most of them don’t know what their actions meant anyway.

    So again, tell me, anyone : What exactly will a inquiry do for the future of the ppl of this province? Absolutely nothing. We need to focus on the future. We need to look at where the substance of our problems lay: in our own systems in this province that we accept.

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  21. The following will be the results of a inquiry:

    After months of making the evening news and giving the open line ppl plenty to talk about, after a few delays the lengthy report is issued. It provides more info for anyone interested to gnaw on and then the said report will get filed away. (In with the other inquires like Renewing our Place in Confederation from the 1990’s, etc).

    The following is the executive summary. (Most will not read the report. The ppl involved will analyze every word and interpret to mean they did nothing wrong; maybe a couple feds will peruse the summary but it will mean nothing to those who can actually do something with it mainly because we do not atttact the best and brightest to key positions of power):

    1. The projections and foundation on which the decision makers at Nalcor relied were wrong. They took the best case scenerio numbers after pressure from govt: The atmosphere was the commodity prices was at a all time high when the decisions were made, Like every executive and political group who are new to all of this : they believed the select experts who predict we are in a new age and this time around prices will stay high. (Developing countries citizens move to middle class, limited reserves, etc. What is always touted every single time we are at a high). Greenhorns riding their first cycle will use the best estimates for the cause. It’s also the political thing to do.

    (Note: it may be doubtful Judge LeBlanc goes this deep but if this report were ever to mean anything, a deep dive into politicians motives - and how it doesn’t work in the business world - would be the main thrust of the report.)

    2. A lot of ppl were not qualified and many reports were ignored (for reasons see 1.).

    Items 3-10 of the summary will be reactive and of no consequence as the author must balance his perception in this tiny province against all the ppl who will be majorly offended if he really got into it. It will be kept generic. It will mean nothing.

    And on we go repeating the mistakes of the past.

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    1. Anony @ 10:42:

      Unfortunately, and not unlike 99.99% of other Inquiries, this is almost verbatim to what I have previously wrote and what will happen.

      A sad, but true, statement of the most probable outcome.


      And to those that wonder if I have made a submission to LeBlanc, my name will show up on several of the government commissioned feasibility/technical reports of how/if the Lower Churchill should have been developed dating back to the late 80s and 90s.

      PENG2

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    2. Remember that the Hughes Inquiry into the Mount Cashel Orphanage Abuse Scandal wasn't actually mandated to find out whom should be charged with abuse, yet fall-out from testimony given at the inquiry resulted in many of those buggers being charged in a court of law and going to jail, after their involvement in the abuse was revealed.

      So like a previous poster said... lawyer up boys, lawyer up.

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    3. An:10:42. "...they believe the select experts who predict we are in a new age and this time around prices will remain high", there will be no basis for that statement. At around that time, the Americans were predicting self sufficiency in oil in a few short years, their fracking program was well under way. The end was in sight of the past 70 years or so, of the Americans shipping money to the Middle East in barells in exchange for oil they were pulling out of the sands for peanuts. The writing was on the wall, as American demand for oil deminished, the world price had to fall, and marginals were driven out of the market. There are some in the us of a that say now, the us should raise their exports to Europe, as a scantion on Russia, by lowering the price to Europe, they will not import Russian oil, and that will kill the Russian economy. Except for Trumpie, not sure what he will do. But my point is there was no basis to believe prices would stay high, except those that paid for those opinions, to support their own wishful thinking. And they included nalcor and the nl govt.

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    4. PENG2
      It seems more than a question of how and if the Lower Chruchill should have been developed, as MF was a small capacity compared to Gull, and very expensive power by itself, and with reliability risks to bring to Nfld.
      It is how Nfld power needs were to be addressed, and the false conclusion as MF being the lowest cost, and manipulating or dismissing the screening process of options.
      It seems clear that for Nfld that a combination of these three would be lowest cost
      1, Customer efficiency and conservation (Demand side Management) Potential long term 600MW reduction, incremental ramp up
      2. Wind : 300 MW addition, incremental ramp up
      3 Island hydro additions 78 Mw confirmed and likely much more available.
      Nalcor info I see suggested they "looked at enhanced conservation" whatever that means,.... look does not imply a comprehensive analysis of what that available and proven technology. There seems to have been some analysis of wind ( underestmated) and of island hydro (78 MW?) , and may have been more that was cost effective.
      But by throwing out conservation and efficiency, the main component for a solution, and very low cost, the other 2 would be questionable as adequate.
      Later info from Nalcor seems to say nothing on consideration of conservation, as if this was a non starter.......compare that to NS and other jurisdictions moving that way.
      To dwell on projections of oil prices alone side tracks other options.
      As a civil guy, I thought you would be interested in monitoring results for customer space heat efficiency, as could easily turn our peak demand negative, as space heating was the culprit for our high winter peak.
      You have been silent on my invitation. Many engineers are not up to scratch on mechanical heating systems, but can readily do a little investigation and analysis,and whether I show bias, and over blow the potential and benefit.I welcome your opinion after some assessment on your part.
      Winston Adams

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    5. WA:

      I read your consumption recordings with great interest---just never asked for an in-person observation as I do have a very good understanding of what you have done, I have some background in controls/instrumentation so your getting readings from your BC locale doesn't surprise me and gives me good confidence in your reporting. Though, if you want another engineers 'cold-eyes' opinion I would be willing to stop by to MC and BC---just let me know.

      I wont disagree with you in that the populace were 'less informed' and future needs could easily have been dealt with by less fiscally intrusive options, but I would say that a lot of the problem may have been related to both the populace and 'decision makers' having blinders on and tunnel vision.

      Unfortunately, now we have $15B spent and realistically no further ahead as I am not confident in access to supply in either direction..

      PENG2

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    6. Sad that we both see 15 billion gone and have little of value, and imagine what that could do for good needed projects, and infrastructure upgrades.
      Yes, would like you to have a "cold -eyes" opinion. Of importance is the effect of relative humidity. Mfg state accurately the ambient temp response, but not RH effect. Our avg RH is about 84 percent, and most mfg state performance at 46 %........when no frosting occurs. Nevertheless, our high RH is handled with not large impacts, that the monitor shows in detail.
      To say ALL units would fail and shut down in our winter ( as the power companies recently aledged,in PUB filings, so to deny grid demand reduction benefit,) I find galling. They justified that by saying it was a "conservative assumption". Such false assumptions seems the way that MF got the go, so the Culture has not changed.
      Good you have some background in controls/instrumentation.
      My prior posting should say 600MW potential reduction, as with added wind and island hydro, one would not need 600 MW reduction, and go for the best measures.
      Yes, call me at 726 6512, and drop by at 55 Devereaux Lane, Logy bay Rd, just past the Town Hall.
      Later, if you want, we can visit the installation at Bishop's Cove. As $300.00 for a full year heat is rather good,and many would doubt, I welcome cold eyes approach.
      Winston

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  22. On Justice LeBlanc:

    He is to the point, brash and doesn’t put up with non-sense. However he has no experience with big business, the capital markets, dealing with and using work from those undertaking assurance engagements, and where to dig. I’m not sure how we can haul a judge out of our criminal, civil and family court and expect him to be a authority on all this. The province needed to find ppl outside the province as we are too small a population to have the ppl qualified on this matter. The lead should of been a panel of 3. Maybe a industry expert, independent economist and someone highly creditable who gets how the Canadian provincial govts work, and its history.

    Judges are smart and independent ppl but you just need the expertise to do the deep dive otherwise it’s just gonna be a generalized work with no teeth that will not get to the substance. Plus, let’s face it, this is all political: do we really expect someone living here to single out the real decision makers - who were politicians - who commissioned this report? Do we really believe the framework will allow the real issues to be flushed out?

    (Sorry about the writing and no editing)

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  23. On GrantThorton:

    They are good ppl and honest. But they are also local with maybe a few others in the mainland office being brought in. They will take no risks or provide no leads, it will be straight forward info gathering and presentation. Some of their top ppl will find out what really went down but they cannot present Justice LeBlanc with any leads or anything other then standardized assurance engagement info.

    Like on many assurance engagements the authors will ache for ppl to discover what really went down but must leave judgement to the users of the information, LeBlamc will need a lot of counsel. I do not believe the inquiry is set up that way leaving a very large disconnect.

    It’s sad how the province picks firms. It’s about impression. Who will look like a donor. What will the public perceive. Ideally the top civil servants should of went out and chosen a large firm with the national partners that do not live here. The local firms need the work and will bring in some of their mainland ppl but this should totally be led by a firm outside the province.

    The pubiuc is also wholefully missing what a Forsenic Audit really is. It’s the new political buzz phrase and so mis-understood.

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    1. On Grant Thorton:
      There is a link on UG, I just noticed yesterday:I believe in the power of NL.
      It is a great source of people and companies who were cheer leaders of MF, and the PR by Nalcor....Gil Bennett, Ed Martin and quotes etc.
      One cheerleader named: Jeff Pardy of Grant Thorton!
      So, is this an indication of the INDEPENDENCE of this Inquiry, choosing GT for this work?
      Looks funny to me...maybe someone can explain this?
      Maybe they will hire Manitoba Hydro Int consultants as experts to reconfirm that MF was the least cost!
      PF

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    2. Now now, Chartered Accountants are professionals, like Economists and Professional Engineers! Ethics must preclude political correctness.

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  24. Follow your neighbors' lead to off grid;

    http://www.cbc.ca/news/canada/nova-scotia/nova-scotia-off-grid-net-metered-options-solar-power-electricity-1.4515928

    There is more to roof design, than shedding rain! Think solar roof, when building new.

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    1. Robert, the system is 20,000.00, capacity unknown.
      One USA supplier quotes a 2kw system for 5000.00 plus 2500.00 for installation and 5kw for $11,000 plus $5500 for installation. us dollars. The smaller system is expected to supply 200-375 kwh per day, so 2.00 to 3.75 per day at 10 cent rates. Not much. They assume only 4 hrs per day of good output, and this from California.
      Some sources say solar has a 20 year of more payback, and also loses 1 percent per year in output.
      Now a solar panel is typical 15 percent efficient, so takes a lot to get a little power.
      Now a black roof is a natural solar collector, but low grade, but large area. The attic temp often rises 20-30 degree F
      Mini-splits efficiency rises 1.5 percent for each 1 degree F, when at full load.
      At part load it is twice that , so 3 percent per degree F .
      Mid day, with a 30 F rise, the efficiency increases 90 percent.
      So a HP,attic mounted, already 300 percent efficient, would be 390 percent efficient, from this low grade solar gain to the roof.
      Add some glass to an attic for direct sun entry, and more gain is possible.
      Technobabble, as Bruno would say.......but excellent results.
      Now a small solar PV array to assist that makes some sense.
      But power companies see net metering as competitor, and to some extent they are.
      Local contractors for 50,000.00 say they cannot supply baseboard heaters or for hot water.......so if off grid, you need lots of wood. I believe in staying with the grid, but substantially reducing loads as most cost effective.
      Winston

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    2. Yeah, and from thence onward having to count your wattage consumption like a yo-yo dieter counts calories; no thanks, been there, done that... it's a lifestyle of voluntary deprivation better suited to agrarian eccentrics who don't have a houseful of teenagers constantly running hot water.

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    3. A must read for all us "Energy Efficiency" experts from Nikiforuk;

      https://thetyee.ca/Opinion/2018/02/26/Energy-Efficiency-Curse/

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  25. While heating is important and the new technologies - such as heat pump and mini splits - a big deal for private residences, the expensive power will impact the population well beyond the monthly heat bill. Nearly everything in our lives will be impacted as retailers, manufacturing,storgafe and logistics companies will have to pass the higher costs along. Beyond our monthly residential bill, there are the other implicit higher costs in everything we purchase.

    There is also the ramifications to current and future industry that we have here. Going forward, who is going to set up shop here? We will never have the opportunity to attract any industry where power is a big part of its cost drivers.

    Than there is equalization. I stand to be corrected, but I don’t think our electricity bills are in any way factored into the equalization formula. Compare what we pay to Quebec. Compare our future bills to Quebec. In NL we just react to what comes before us. The politicians here don’t get it. It’s all about creating value for our residents. Quebec subsidizes consumers and then collects equalization. They plan and strategize. (Think about Churchill and how they even avoided the 40 year natural expire on any contract). In NL we just react to what is put before our face.

    500,000 ppl. One of the most resource rich parts of the world and we just keep messing it up.

    Let’s blame the stun politicians - but these ppl only reflect and act on the will of the ppl.

    It’s not the lack resources, it’s not any one messed up project - we have always had a leadership problem here in NL.

    We can get out of the latest major mistake being MF. But it will take leadership. It will take big picture planning. It will take knowledgeable ppl being placed in a performance driven environment. It’s gonna take getting out of our socialist ways and accepting a govt cannot run a business. Hello.

    I have no access to govt treasury info, or Nalcor info. But I can tell you what I know: the substance of planning for MF and Nalcor going forward at this point includes:
    1. What is the incremental cost of borrowing for the province? What will our actions and MF / Nalcor planning mean for the ratings into the future. How much will the impact on those rates costs vs. What options do we have for offloading. What will the return to the public markets/ Private equity required? (There are plenty of different financial products that we can play into to get the right offloading mix, timing and impact on our outstanding debt.
    2. How will this effect equalization and negotiations going forward including the accord. Don’t let the premier and province go in to the negotiations without a plan behind them. Plus don’t let the feds know all our planning. The central govt see us as just little minions needing guidance - we can use that ignorance to our advantage. Play off the MF loan guarantee. Go a bit Trimpish during his bankruptcy- they are on the hook as well. Plan around privatizing the Nalcor assets and around the taxation into the future of the privatization restructure (the power to tax is important.
    3. Put the unbiased and real experts on these files with real experience.

    We need real leadership to make any change. That leader will start with BELIEF - the ppl need to believe there are major issues. Then it takes a big picture plan. The leader needs to be at least knowledgeable enough to know how to seek out and attract the best. Third and most important is Culture. The other 2 can only be executed with the right culture. Ppl will follow great leaders and accept the plan. These leaders will attract the best. This is the momentum of change this province needs. The plan will come from a great leader creating our great leaders and attracting high level management talent.

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    1. Seems a good analysis of our current status, and we are still proceeding at break neck speed to the cliff without any real plans in place. Just wondering where these ppl and ideas were when they were needed, like 15 years ago, when the place we have arrived at was being planned and promoted as the only way to go. Seems like ppl are just waking up and realizing our desperate situation. Could be called too little too late.

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    2. Indeed, we have a Culture problem. How often did Liberty refer to the culture of Nalcor, who showed little change.....even now.
      Keep that part of our culture that is good, discard the rest.
      We had a winter heating problem which was easily fixed by changing the heating systems, instead they spend 15 billion and we are now on the verge of bankrupting the province.
      You are right, what was a heating problem is now much, much worse as it affects everything. Many should have seen this coming, and raised hell. What business organizations protested? Retailers, fish plant owners ,government buildings,manufacturing, every thing is tired to energy costs.
      We would not expect to be on par with Quebec low rates, but certainly with Manitioba and BC who have hydro like us,
      To compare us with NS NB PEI.....with little hydro like we have on this island.....everyone asleep at the wheel to let this happen. The PUB hearings......webcast, Andy Wells correctly said more people were watching the Young and the Restless ......and a handful of crooks running the show, scratching each others back.
      Culture......that's our culture. That's always been our culture.
      Have we had a good leader since Sir Robert Bond? And not 1 in 100 even know of him, because our culture denies us our history.
      This f..king mess, and where is John Crosbie, Clyde Wells, Ed Roberts, Bill Rowe.........all croaked?......Not a god damn word from any of them, and likewise our business elites. Are they all traitors to our people ?
      Can we import a Leader? A leader must be one of us that feels the weight that is about to bury us.
      We need a Leader with a team that is not motivated by self interest.........
      If they are honest, speak the truth, have courage, intelligent,a record of accomplishment, and the interest of the province over self interest.........and a strong will to put this province "on tract",.... but our culture produces few such individuals.
      And such a leader must change our culture, since parts of our culture needs fixing.
      We need to let Leblanc know that the architects and enablers of this fiasco must be clearly exposed. They need a public flogging, with cameras rolling for all to see the sleeveens.
      And evidence of crimes passed to the police.Past time to get justice for the people, not to protect those that created this boondoggle. Leblanc.......let it be a household word......what did Leblanc expose today? Take no quarter from the traitors. THey just did not commit errors, but calculated deeds of deceit......find them out, just like Mueller at the FBI. Let there be justice, show there are balls of steel underneath that robe. You are beholden to no one, but give us justice Leblanc...or disrobe.
      PF



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    3. These are all fighting words, but need to be said. Guess you laid our culture on the line. Right on ...let LeBlanc be a household word....!!!!

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