EDITOR'S NOTE: The author of today's article is the whistleblower, dubbed the "Anonymous Engineer", who disclosed – on this Blog - falsification of the estimates for the Muskrat Falls project. That was January 30, 2017 . His comments were recorded in a post entitled Muskrat Cost Estimates "A Complete Falsification". A second post called Muskrat: Allegations of Phony Cost Estimates provided significant additional details of low-balling which ultimately were used to justify the Sanction of a project that has become a scourge on the Province's economy. His alarming assertions have been supported with revelations which emerged from Phase I of the Commission of Inquiry. This article attempts to shed light on an issue that is likely to be assessed during Phase II, often referred to as the Construction Phase. — Des Sullivan
Guest Post by the "Anonymous Engineer"
of Labour Productivity on
"Base Estimate" for the Muskrat Falls Project
It is almost two years to the month since I spoke with the
host of the Uncle Gnarley Blog, Des Sullivan, and subsequently with Anthony Germain of the CBC
Morning Show. At that time I revealed that the estimates on which the Muskrat Falls
project was approved were low balled and falsified. I am confident that those
statements were heard at the political level and that they might have
influenced the Government's decision to commence
the Inquiry which, of course, I have been monitoring.
The latest Muskrat Falls Oversight Committee Report evokes all the excitement of yesterday’s breakfast. Released on November 22,
2018 it is a project status report to September 30. Where was I to find a sense
of urgency in ancient history?
Gnawing at me, however, was Nalcor’s warning that the project
Budget did not account for certain specific risks — chiefly protest unrest,
unforeseen directives from Government and (wouldn’t you know it) the Muskrat
Falls Commission of Inquiry. Those risks had been quantified by Westney
Consulting as having a potential cost of between $170 million and $370 million.
The Inquiry alone evidently endangers the MF Budget Estimate
(that’s the $12.7 billion figure, not the one contrived) by between $45 and
The Premier’s annual address to Rotary had all the content one
would expect from a politician seeking re-election. It is no surprise, therefore,
that Dwight Ball lauded his Administration’s accomplishments and signalled a
warning to voters to ignore the “noise and fiction” expected from political
opponents in an election year.
In the political arena, the mastery of synthetic truths is
claimed by far too many.
Ball himself is well-known for the deceptive arts, having
feigned innocence over the approved gold-plated boot in the derriere for Ed
Martin. Last year he upped the ante with the assertion that neither taxpayers
nor ratepayers will take the hit for the $12.7 billion Muskrat Falls project.
Written by Des Sullivan and David Vardy (with research and analysis contributed by PlanetNL)
The Ball Administration asked the PUB to examine alternatives to
offer ratepayer relief from unaffordable Muskrat Falls power. Because the cost
of rate mitigation is too large to be imposed on either ratepayers or taxpayers — not that they can be distinguished — the public should be wary that the PUB is
possessed of a magic wand. The Government has essentially kicked the “mitigation”
can down the road, too.
Having declined to suspend the project to examine the wisdom
of continuation vs termination, the Premier was right to engage the PUB for the
purpose. Unfortunately, the Provincial Government offered the PUB and its
Consultants absolutely no guidance as to what interventions may be available
from them or the Federal Government. Even a plethora of nips and tucks won’t
suffice given the magnitude of the problem, yet they must know that MF threatens
not just the public welfare but our collective solvency and, hence, the
Province’s sovereignty, too.
VOCM, in a year-end news story,quotes Finance Minister
Tom Osborne saying that “the province has made some significant progress in the
last three years in knocking down the deficit.” The Minister asserts that “in
each of the last 3 years they’ve eliminated $2-billion from the deficit.”
Perhaps such comments should be dismissed as election fever
builds and the propaganda machine is stoked. However, I do remember the Premier
stating his commitment to transparency, and it is in that spirit I’m hoping the
Minister will release details of his quite fantastical assertion.
Could he also inform us why killing the deficit had to be such
a painless exercise? How will we ever learn not to repeat the last decade of
fiscal irresponsibility if correcting financial recklessness is done so easily?!?