Thursday, 24 November 2016

NALCOR CAN'T BE TRUSTED TO NEGOTIATE WITH HYDRO QUEBEC

The public has been in a state best described as “delusion” since Danny Williams unveiled the Muskrat Falls project. However, this condition is due less to a wilful state of denial than it is to a deliberate, preordained, and persistent institutional and politically inspired deceit.

Neither the government nor the crown agency, Nalcor, can find vested interest in keeping an ill-informed public abreast of the problems that affect them financially - both individually and as a society.

Proof is the credibility which Premier Ball still ascribes to Muskrat. It will be a good project ‘in the long run’, said Ball again recently - seemingly unmind of its problematic state and their consequences.

The deception is also found in the government’s refusal to properly describe the project’s legal status – following the Quebec Superior Court decision.


It is confirmed by Nalcor's refusal to release all its data regarding the North Spur instability problem or to send it to a group of international experts for independent review.

It is underscored by the rejection of basic oversight and by persistent information spin.

As David Vardy discussed in recent posts, Nalcor has even taken steps to ban publication of reports prepared by the Independent Engineer – prompting him to appeal to the Freedom of Information Commissioner.

The same tools of secrecy and deceit were used by Nalcor to obtain sanction.

Institutional deceit is the moral and intellectual equivalence of corruption.

Nalcor continues the strategy anyway.

Fortunately, the law demands that the government give disclosure to and to obtain approval for the debt funding which keeps the project going.

But leadership - not the law - should tie the recent extra payment of $150 million to Astaldi – a group long blamed for cost overruns and schedule delay. Leadership - not the law - should identify who should take responsibility for a badly written contract – and the choice of Astaldi in the first place.

Stan Marshall can articulate as he pleases that senior management are all “good people” but the public is kept in the dark, by him as by his predecessor, why Astaldi still has claims outstanding estimated at $800 million.

Of course, this fa├žade of competence is as leaky as the cofferdam at Muskrat.

Yet, as David Vardy pointed out, every day nearly $10 million is spent on the project - and the final cost is anyone’s guess.

So severe is the problem of trust, Nalcor can’t write a straightforward press release about the leaky cofferdam - though the Mayor of Happy Valley-Goose Bay is dragged out of bed at 3:45am and given warning!

Days later, the CEO Stan Marshall is the one making a statement – seemingly no one less senior, including the Executive V-P responsible for the project, has the credibility to go on the public airwaves.

Whatever the leaky cofferdam’s technical implications – including for further project delays – one might reasonably expect, given that the project costs continue to climb, that Nalcor would have advised if the dam contract was “lump sum” – and if the problem is the contractor’s cost – or if this contract, too, has been assigned the special status of “Unit Pricing” – a favourite fabrication of Ed Martin.

The trust issue is important, now, for the next big issue.

It is important because Stan Marshall can’t seem to explain how the Upper Churchill renewal contract legal case can go from “not about water rights” to “…there are some issues…”

And, remember, that comment was preceded by Marshall’s own assertion: ”that Court case will have no major impact on Muskrat Falls whatsoever..."   He makes no offer to investigate who is proffering the poor legal advice. He is inured to the reality Nalcor management are a group being laughed at. 

Increasingly, the public is aware that the Muskrat Falls project ought never to have been sanctioned.

The public understands on an individual basis – even if Dwight Ball does not - the financial consequences of a doubling (or worse) of their electric power costs, even they don’t grasp the intricacies of complex legal or power engineering jargon. 

But the latest charade – enabled by Ball as much as by Nalcor - should serve as an ugly reminder of the cynicism that pervades our public affairs and from whence it comes.

Hydro Quebec, we are led to believe, wants to “bury the hatchet”.  A persistent impulse by the Premier not to speak the truth compelled him to say in the House of Assembly that "What we saw…coming out of Quebec is really another sign of something that we've been noticing for a few weeks….we'll see where this takes us, there's no sense in rushing into things right now".  

Ball would have us believe the Quebec comments were inspired by the Quebecers – when we know otherwise. Indeed, Stan Marshall has already indicated he is talking to them and highly credible reports from people who have met with Marshall say he has confirmed those discussions are taking place.

Quebec Hydro knows they have Nalcor over a barrel. They know that regardless of how much Muskrat costs it will generate far less firm power – in the absence of a Water Management Agreement - than Nalcor promised.

No deal with Hydro Quebec can occur without significant additional costs to the public. But the fear is that Nalcor will get its deal and shield itself from exposure to examination of its management performance and poor decision-making.

Rather than a Royal Commission of Inquiry into Nalcor – into the contrived assumptions that led to Muskrat sanction and issues of competence – the public are likely in for another snow-job.

Nalcor cannot be trusted to negotiate any major issue with Hydro Quebec. It can't be permitted to shrug off another huge giveaway as it did to Emera and to Nova Scotia.

At the beginning, the Clerk of the Executive Council ought to chair any discussions/negotiations between Nalcor and Hydro Quebec. He is the lawyer - and one of the 2041 Group members - who warned Nalcor to obtain legal clarity on water management before proceeding with the project.

But the oversight should not stop there. Any agreement concluded ought to be submitted to the PUB for public review or, alternatively, subjected to a referendum.

It's time for the public to stop paying deference to incompetence.