NALCOR CEO DETERMINED TO BREAK TREASURY; BALL WILL LET HIM

It’s a lot to expect from a Premier still trying to make his first decision. 

But Nalcor CEO Ed Martin, having failed to do the honourable thing at last Thursday’s Nalcor AGM, will have to be pushed. Still, it is increasingly clear it won’t be Ball who will do the pushing.

One of the few items of substance that came out of the AGM was confirmation that Muskrat will be delayed and the cost will climb even higher, though I am unsure who is left to claim surprise.

Martin also said we won’t get a cost and schedule update until the end of June, leaving us to wonder if he will tell the Premier the E&Y March 31 deadline will also have to be extended.

One attendee at the AGM commented: "the new government has not taken a feather out of Ed Martin’s smooth-as-silk insouciance. He has risen above petty concerns about budgets and schedules to extol the longevity of hydroelectric projects, such as the Hoover Dam, while sacrificing the government’s commitment to open the books on the altar of “commercial sensitivity”.

There were few other disclosures, but the Nalcor CEO took time to invoke blame at the AGM; something he excluded from those self-imposed “commercially sensitivity” latitudes.

Gil Bennett, Nalcor’s Mr. Pop Up, did not appear with any new claim of “float time” in Astaldi’s schedule, as he did when this Blogger accused Nalcor of “poor planning”; the Italian contractor having tore down an unfinished $120 million “dome”. 

“Obsessing over every bit of wastage on a job site is not the proper way to move ahead with a project as large in scope as Muskrat Falls”, CBC quoted the Nalcor V-P, a year ago, counselling as much as chastising, that milestones were more important than processes.

Back then, the “experts at Nalcor” were a pretty cocky bunch; even a $120 million temporary steel/concrete structure was elevated to the status of a “bit of waste”.

Defeat now greets both milestones and processes; boast has turned to blame.

At the AGM, the Nalcor CEO could be heard invoking the name Astaldi, but in less glowing terms. "We do have an issue with the powerhouse that Astaldi is constructing," Martin said. "They have fallen behind significantly”. That lag will have "schedule implications," he acknowledged, "and with schedule implications, there will be some cost implications", the CBC reported.

Astaldi seems unbowed; a fact to which more space will be given next time.

For now, in contrast to Ed Martin’s assertion, Astaldi claims in its Full Year 2015 Annual Report released March 9, 2016, a mere few days ago, (see excerpt below) that “today the production (at Muskrat Falls) achieved remarkable levels”. 

Indeed, the Astaldi CEO told securities analysts during and following release of the 2015 Annual Report, that “today negotiations are underway which obviously have been very positive with the client”. He added, in the Q&A Session, “we expect that in the short term it will reach a conclusion”. The Report said “severe weather conditions had delayed the works”.

Martin did not tell the AGM or reporters of any "positive" negotiations with Astaldi or that the two parties are about to revise Astaldi’s contract; though based on the expectation, Astaldi intends to report a profit from Muskrat in 2016.

Ostensibly, these matters are Martin’s business, alone. It is sufficient for ratepayers and tax payers to know their tab for Muskrat is far from closed.

Muskrat watchers are used to working through third parties to pry into the status of the Muskrat Falls project. The NS UARB, for example, confirmed Nalcor shares a very different narrative with others than it shares with us. Now, the official Reports and audio tapes of Astaldi’s official comments have a similar usefulness.

Of course, the Astaldi CEO is obligated to comply with the transparency requirements of the Italian and London Stock Exchanges.

As Head of a Crown Corporation, Ed Martin has few brakes; he is not even controlled by a Government with the capacity or the political will to stop him before he breaks us. Even the Auditor General recoils from paying him a visit.

As MUN Professor, Dr. Tom Baird, recently noted: back in June, 2014 when Ed Martin announced Muskrat costs would reach $6.99 billion (plus IDC) the CBC reported Martin stating “90 per cent of Nalcor’s Muskrat Falls contracts are essentially complete. The reporter quoted him saying ‘those prices are fixed, helping provide some cost certainty’. "I believe that we have narrowed down the risk of additional cost increases very, very, very significantly”, Martin was quoted saying. 

The figure was raised to $7.65 billion (plus IDC) in September, 2015. Now, the CEO warns again. Evidently, nothing is "fixed" at all, and the project is years away from completion.  

That this Premier would let the Nalcor CEO announce the new schedule delay and cost increase, before firing him, is difficult to contemplate. 

It seems the election has changed nothing except for the people who owe fealty to Ed Martin.