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Thursday 24 March 2016


Thursday, March 24, 2016 is the day on which Nalcor hosts its Annual General Meeting. This is a good day for Ed Martin to step down, as Nalcor CEO.

Premier Dwight Ball is testing the forbearance of the Newfoundland and Labrador public not having given the failed CEO a well-deserved push at the start of his tenure. After all, as Head of Nalcor, Ed Martin has overseen the evaporation of a great deal of public money, now counted as billions; the exact amount is a moving target. The Muskrat Falls project is only around 40% complete.

It is true that Ball indicated the intent of the EY Review “is not to make changes in the administration at Nalcor” and, in a ham-fisted way, stated that “there is no reason not to have confidence” in Nalcor management. Ed Martin might have thought otherwise, but by any measure, this is hardly a ringing endorsement of the CEO’s leadership.

It is not as if the qualified support was accompanied with an enumeration of milestones achieved, money saved, or major decisions taken. It is not as if Martin had discovered even something as essential as a project schedule.

On the contrary, Ball only has evidence of a mega project in serious trouble. Stated the Premier: "Given cost overruns, schedule changes and baseline updates…it is prudent for the provincial government to review the project's cost and schedule…”

Apologists for Ed Martin will say the decision to proceed with Muskrat was in consequence of a directive given by former Premier Danny Williams and final sanction under Premier Cathy Dunderdale. They argue Martin is just a public servant executing the mandate he was given.

Of course, not acknowledged is that Mr. Martin, as the principle architect of the scheme, was the one who oversaw all the projections including demand, oil price forecasts, and other assumptions on which the project was justified.

It was Martin who ran an opaque Agency, one determined to cut independent assessment of what he, in conjunction with SNC Lavalin, had contrived.

It was Martin who ignored the risk of proceeding in the absence of a resolution to a challenge, by Hydro Quebec, of the Water Management Agreement.

It was Martin who provided the politicians with then highly suspect, now clearly underestimated, project costs.

It was Martin who proceeded with construction, spending tens of millions of dollars, seemingly in a race to a point where there could be no turning back on the project, even in the absence of a deal with Nova Scotia. Knowingly, Martin allowed himself to be backed into a corner, and forced to sweeten the deal (at the insistence of the NS UARB), just to trigger the the Federal Loan Guarantee.  

It was Martin who hired an unsuitable and unqualified project management team.

It is Martin who refuses to subject the North Spur to a panel of independent engineering experts in spite of the fact that Canada’s most preeminent hydro engineer, James L. Gordon and others, like Dr. Stig Bernander, have made repeated calls for that process to be employed fearing dam safety issues associated with “quick clay”.

It was Martin who hired Astaldi, a company new to Canada; one that had not previously worked in winter conditions. Today the Company oversees a virtually dormant work site, as Nalcor’s fixed costs including highly paid management and other site expenses, continue to mount.

It was under Martin’s leadership that the project schedule fell into disarray and project estimated costs ran to $9.05 billion. The figure, Nalcor states, was “established in September 2015…” as if to give the public warning there are more overruns to come.
A dormant work site at Muskrat Falls  (Nalcor Photo)
If anyone cares to read the latest Muskrat Falls Report, released March 15, 2016 for work conducted to the end of January, 2016 they will find the site of the Generating Facility not just, for all intents and purposes. shutdown they will see Nalcor claiming as progress a monument to waste; demolition of the unnecessary and unused Integrated Cover System, known as the “Dome”.
And, as one senior engineer noted, another monthly Report has been produced in which no mention is made of the project schedule!

Real project engineers do not make such an omission.

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Muskrat Falls constitutes a financial tragedy of monumental proportion for the Treasury and economically for our entire society. Ours is a place facing not only high unemployment and higher taxes, but a doubling of electrical costs. This is a burden that will be imposed on two generations and inhibit any serious attempt at economic diversification. 

If the project costs continues to spiral out of control, as many qualified engineers predict they will, progress on the deficit achieved after supposedly tough decisions are taken in the Budget, will be placed in jeopardy.

Danny Williams, Cathy Dunderdale, Tom Marshall, and Paul Davis, all co-players in this Muskrat folly, are gone from power.

The Nalcor CEO is a hanger on. Yet, his only claim is that of poster boy for secrecy, cost overruns, information "spin", and for a mega project gathering world-wide attention, and not for any good reason.

Those people still in denial on Muskrat Falls, and there are many, should read the Liberty Consulting Group Reports, prepared for the PUB following DARKNL, to get an independent appraisal as to how poorly the Province’s electrical system has been managed.

Those issues together with the state of the Muskrat Falls project and all that it portends for Newfoundland and Labrador society, constitutes an indictment of Ed Martin, and the role he has played, as Nalcor CEO. 

He should, today, use the Annual General Meeting of the Crown Corporation as a platform to apologize to the people of the Province for his role in the debacle, and step down.