When Premier
Tom Marshall announced his Administration’s intention to establish an “Oversight”
Committee for the Muskrat Falls construction project skepticism abounded.
Afterall, the
Premier eschewed demands for project reviews when he was both Minister of
Finance and Natural Resources. He supported Premier Dunderdale’s position on
‘oversight’ even as he watched his colleague, Jerome Kennedy, bolt the Cabinet
over the issue.
With
Dunderdale gone, it was natural to wonder whether it was really possible that Premier
Marshall, now possessed of the power to arbitrarily cause a reversal of policy,
might actually do so.
It was left
to the Natural Resources Minister Derrick Dally to announce the details of
Government’s plan. He confirmed was most
suspected.
The Oversight Committee will
be completely internal to the Government and consist of the Deputy Ministers of
Finance, Natural Resources and Justice and Chaired by the Clerk of the
Executive Council. The Minister says the Committee will focus on project costs,
scheduling and overall performance.
The Minister
failed to comment on the independence the Committee might exert. The subject is moot, anyway, given the
Government’s failure to get serious about the issue of oversight and a determination
to provide for an informed and professional analysis of Nalcor’s management
capability.
With all due
respect to the noted senior public servants, they do not possess the skills to assess
all the issues essential to providing credible oversight of a multi-billion
dollar construction Project.
Undoubtedly,
as senior officials, they have a role to play; chiefly, it is one that entails
co-ordination of the Oversight Committee and communicating the analysis of a
properly constituted expert group to the Premier and Cabinet.
In the
absence of significant technical expertise, especially in the engineering,
project management and financial fields, this Committee is incapable of giving
Government either independent thought or serious review.
There is no
nice way to say this: the Premier is being dishonest. He is attempting to mislead an uninformed
public once again.
No one,
including this Blogger, expected the oversight committee to be possessed with
the authority to re-consider the assumptions on which Muskrat is based, however
unsound. Equally, however, no one would have thought a chastened Government
capable of reducing ‘oversight’ to a three martini lunch with Nalcor CEO Ed
Martin on a Friday afternoon. That is
what the Premier has essentially done.
What might real
oversight actually look like?
First, it
will conduct review of Nalcor’s Muskrat Falls engineering and financial models
and the assumptions on which they are based; an information base, updated
constantly, would be analyzed until project completion.
It will
demand an analysis to determine whether construction progress, to date, mirrors
Nalcor’s engineering and design criteria, accounts for forecast technical
issues and reflects forecast targets in tendering prices and budgets.
It will
assess the Project schedule and determine if progress is consistent with
forecasts.
It will
review critical project milestones and assess impediments to their achievement. For this purpose, it will review what
engineers refer to as the Company’s critical issues log (Risk Log) which describes
possible or anticipated major technical challenges. (One such issue would be the
North Spur’s Quick Clay stability problem and many less tricky and costly issues
that emerged during the design process.)
An Oversight
Committee would conduct an assessment of the current management expertise to
determine if some of Nalcor’s cable and oil management guys should be switched
out with real hydro dam construction expertise especially considering that
Muskrat is actually a damn project with management issues peculiar to that construction.
The
Committee would review legal issues that have arisen with contractors regarding
legal drafting and interpretation of tenders. It would review legal agreements
entered into with various parties including the Native Peoples.
It would determine
whether the Government’s legal commitments are whole, obviating the possibly of
lawsuits and more costs later.
It will note
the construction change orders that have already been issued and why they
needed to occur.
Then there
would be sub-sets of these issues; all focussed on getting a complex project
executed on time and on budget.
No one
should be left with the impression that four career senior public servants,
each heading major departments of Government, none knowing much, if anything, about
a mega construction project or possessing engineering expertise, can undertake
the role of oversight of Muskrat Falls.
Who would
even think that four people, working part-time, could perform that which only a
dedicated expert team, intelligently assembled, could possibly undertake?
Oversight
needs a mandate supported by an honest Government preoccupied with the enormous
challenges of Muskrat Falls and the serious threat of overruns from poor
project conception, management and political influence. It needs a budget and a team of experienced
professionals, at least some of them with international expertise on several
hydro projects. It needs independence.
The Premier
has offered nothing of the kind.
That such a
Committee should be inscribed with the title “oversight” is inherently dishonest
and unbecoming of a Premier but perhaps not this Premier.
Nalcor is solely
in charge. There is no oversight of
Muskrat Falls.
