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Monday 30 January 2017


What would you think, having received these comments from a long time professional engineer on the Muskrat Falls project? He writes:

“I could not put up with falsifying information anymore.

To begin with, the original cost of $6.2 billion on which the project was approved was a complete falsification. The estimate was deliberately kept low below $7 billion, so as to appear favourable relative to the cost of thermal power generation.

The likely costs were known about three years ago, but Nalcor Management kept it a secret, steadfastly denying that there were major schedule delays and cost overruns, until it was no longer possible to hide the true status with the election of a new Provincial Government.

The unit prices used were ridiculously low. The Management at the time knew this.

The Astaldi contract, at the time of award, had left out many items. The Canadian bidders were in the $1.8 billion range the present renegotiated cost...

Now that EY are coming up with the new cost… Whatever final figure EY generates must be confirmed by a completely separate entity, who are not paid by Nalcor.

The new leader of the "Oversight Committee" [should] specifically look into the costs of all the mechanical contracts, civil contracts and the service contracts. With the three year project delay, there will be a huge impact. The $11.7 billion interim figure, which includes interest during construction, looks too low… I know how the game is played. Expect a cost of about $15 billion!! 

This will be a big burden for the people of Newfoundland. They must know the truth.”

Those were the comments of one engineer. He was not exactly enamoured by the "independence" of the Independent Engineer either but that's another story.

I have received comments from a good many engineers, all so similar that they reinforce each other’s veracity.

One writes: “soil and weather conditions” have been blamed for cost overruns. He says it has nothing to do with weather or soil "just a lack of ability by both the contractor and SNC-Nalcor... weather has been on a par with conditions anyone who has worked in Labrador might have expected"

Another engineer wrote about the untendered contract given to Vallard: “The job was Vallard's even before the tender call (which was cancelled).” He also states: No one I have encountered [on the LIL] actually worked in Labrador beforeit's like the blind leading the blind

Yet another engineer took issue with a cost figure I had used to replace the "popped" cable which, from the factory to the towers, went either unnoticed or ignored by everyone. The engineer says the actual cost to Nalcor will be closer to $300 million (2 lines of 140 kms) He states that this will be a tough issue because it was a spec'd [item] via SNCthe supplier warned of a potential failure prior to production but [they] pushed ahead with production/installation anyway

An engineer who understood large project logistics wrote to me reviewing Nalcor's management structure and the number of people on the Lower Churchill Project payroll. He comments: With all these very highly paid people you might expect to have a project that would be so organized that it would be ahead of schedule and on budget. He asks: Do we need to have all these people with no hydro-electric construction experience? And what about SNC, what are they doing and what is their contract value now? And what about Ed Martin’s constant comments about being ahead in engineering that the risks and costs would be better managed?”

There is a pattern of dysfunctionality here all within Nalcor. And, to give it a different dimension, when Nalcor’s screw-ups run into the tens or hundreds of millions of dollars, the corporation can’t be honest about the source of the problem. It tries to use the full cover of public and media indifference and ignorance of the issues to keep its incompetence hidden.

Nalcor appears now and again to fess up to a new, higher level of cost overruns only to go back into hiding because the government has given it unfettered access to the public purse.

There is dysfunction, dishonesty, and incompetence at Nalcor. The 46% of the public who still support the project would have a different view if they had a better understanding of the degree to which their money is being wasted. Soothing words and other blarney from Danny Williams only serve to extend public misunderstanding as to Muskrat's reality.  

Also aggravating is Nalcor's deceptive practices even under Stan Marshall. 

It is worth calling attention to a recent episode involving retired Canadian hydro engineer James L. Gordon, who has written extensively on this Blog. Jim was persuaded, briefly, to conclude that Nalcor’s design to remediate the North Spur was safe. The comments caused Nalcor’s PR machine to go into overdrive aided by a compliant mainstream media hoping to validate Nalcor’s refusal of independent review of the instability problem. 

But, within days, the hydro engineer realized he had erred and, to his credit, publicly said so. Wrote Gordon: “This new data indicates that it is now absolutely essential to have an independent Review Board undertake a comprehensive assessment of the stability of the North Spur.”

Nalcor treated Jim Gordon’s reversal with complete silence unwilling even to acknowledge the engineer or the faulty analysis it had vigorously embraced just a few days earlier.

This is sleaze.

But so, too, is falsifying information to warrant project sanction.

And when a phrase like “cost pressures” (one of Ed Martin’s favourites) is used to explain egregious cost overruns when incompetence is a far bigger problem, as in the example of the faulty cable you know this is an organization not deserving of the public trust.  

In a more sensible world, public exposure of those engineers’ indictments would cause a furor.

But not here.

In a well-run organization, such comments would incite the Nalcor CEO to action especially given that they are made by current and former Nalcor engineers.

But not here. 

Within a thoughtful and prudent government the Minister of Finance would descend on the free-spenders and wring their bloody necks. 

But not here.

Even the Auditor General cowers under Nalcor’s stare. 

It has been a tough slog for a good many engineers. Some, who couldn’t stomach the incompetence, left the project long before they wanted to. Some of them found in this Blog an outlet to express their concerns.  

Each of their emails was accompanied only with a simple request for confidentiality which will always be honoured.    

One of the engineers who asserted that the project cost estimates were contrived - falsified - suggested his comments should cause a “firestorm” of protest in the province.

I wrote him back and advised: "...anywhere else. But not here."