HALF-TRUTHS AND LIES: THE MEDIA SHOULD TRIPLE CHECK NALCOR'S "FACTS"

A bit of an odd story by CBC’s Terry Roberts, entitled No formal talks for ‘energy transactions’ with Nova Scotia says Nalcor (May 22^nd), was seemingly intended to recognize the opportunity afforded Newfoundland by the impending completion of the Maritime Link (ML).

Roberts found Emera’s Rick Janega and Nalcor’s Stan Marshall in a celebratory mood about the savings opportunity available from “displacing costly Holyrood power by importing electricity from the Maritimes”.

The CBC story caught my attention because it has some understated and missing pieces.

The completion of the ML might result in some short-term savings — for just three or four months. But by year's end, the Labrador Island Link (LIL) will be also be ready, if Stan Marshall is to be believed. This event will allow transmission to the Island of the unused portion of the Recall power from the Upper Churchill. But the commissioning will also trigger a levy on ratepayers for a large portion of the debt raised to build the Muskrat Falls project.

ANONYMOUS ENGINEER HAS ADVICE FOR AUDITOR-GENERAL

Some critics of the Muskrat Falls project, including this scribe, had hoped that the Auditor-General (A-G) might review the activities of Nalcor several years ago. Confronted directly on the issue, during a presentation on the province’s fiscal position at Memorial, the A-G excused his Office based upon a limited budget and a shortage of resources.

Then in November, 2016 Terry Paddon – with no evident change in those resources - suddenly got energized. He told the media he now planned “to take a look at Nalcor Energy (and) possibly Muskrat Falls."

The focus of the A-G has to be sharp and precise. In this instance to investigate the allegations of estimate falsification of Muskrat Falls.

In its Mission Statement the A-G’s Office states:

"As legislative auditors, we audit financial statements and other accountability documents, evaluate management practices and control systems, and determine compliance with legislative and other authorities.

Our purpose is to promote accountability and encourage positive change in the stewardship, management and use of public resources".

Contrary to the stated “Mission” there has not been any response from the Office of the A-G on anything.

STAN MARSHALL INTERVIEW WITH GERMAIN NARROWS FIELD OF CULPRITS

The CBC report of an anonymous senior Nalcor engineer - who claims that low-balled estimates were used to obtain sanction for the Muskrat Falls project - has, again, shed light on a Crown Corporation that, sometime after 2009, went rogue.

The engineer’s allegations are now well-known, but Nalcor’s response – specifically Anthony Germain's interview – finds a retirement-minded CEO indicating casual indifference to what can only be described as the most serious accusations ever leveled at the government since Confederation. 

The CBC quoted the senior engineer using the words “absurdly low” to describe the estimates. In my Blog Post of February 2017, the same engineer used the word “falsification”.

Nalcor CEO Stan Marshall described the estimates as “unrealistic”.

“Absurdly low”, “falsification” and “unrealistic” – any difference is fundamentally meaningless.

In this context it is important to remember that we are not discussing the replacement of a culvert in Bung Hole Tickle. Estimating a multi-billion dollar project is complex work. It also goes through multiple layers of review – each time by a group more senior. 

OF DECEIT, EMERA AND MUSKRAT MADNESS

GUEST POST WRITTEN BY CABOT MARTIN

Close observers of things Muskrat are by now getting used to troubling news regarding this benighted project.

However, the most recent Uncle Gnarley posts building on revelations first made by a former Muskrat Falls project engineer (aka the Unknown Engineer) on UncleGnarley on January 30, 2017 must have shocked even the most cynical.

Seriously - are we talking about someone playing fast and easy with the numbers?

If true, would be big time shit.

Then came last Wednesday’s stellar CBC St. John’s Morning Show interview by Anthony Germain featuring the disguised voice of the “Unknown Engineer” repeating on the public airwaves his astounding assertions ending with a call for a “Forensic Audit” of the manner in which the Muskrat project costs were prepared.

The next day Mr. Germain followed up with an extended interview on the mechanics of a Forensic Audit with financial wiz Larry Short – all of which served to turn up the heat on this issue in dramatic fashion. 

WILL THE A-G PROBE FALSIFICATION OF MUSKRAT COST ESTIMATES?

Guest Post by David Vardy and Ron Penney

Breaking news from the CBC casts new light on Muskrat Falls!

On January 30, 2017 Uncle Gnarley posted on the falsification of estimates, drawing upon allegations made by a Nalcor engineer, who said that

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.

TIME FOR ENGINEERS' ASSOCIATION TO BE HELD TO ACCOUNT ON MUSKRAT

First, I have to relate a little story which will provide some additional context to the purpose of this item. 

Back in October 2014, during the visit of Dr. Stig Bernander who came to the province to conduct field work along the Lower Churchill River, I woke up one morning to find the Association of Professional Engineers and Geoscientists of Newfoundland (APEGN) in pursuit of the Professor. The email read that APEGN was trying to contact Dr. Bernander so that the association could cite him for having used “P. Eng.” – the designation which is for the proprietary use of APEGN.

Evidently, APEGN had received a complaint from one of its members - following an advertisement I had posted in the Telegram. The advertisement was placed for the sole purpose of inviting the public to the Bernander Lecture scheduled for presentation at the LSPU Hall. The complaining engineer noted that Bernander had not registered with APEGN and was therefore unqualified to use the engineering designation.

Admittedly, I thought the email peculiar. After all, the octogenarian Professor had come here, pro bono, in response to an important public matter, the North Spur. I thought it rather ungracious – to say the least – that he should be tracked down so that a fee could be collected.

ENGINEERS' COMPETENCE TO PRACTICE QUESTIONED

Guest Post By James L. Gordon, P. Eng. (Ret'd) 

On May 1^st, I read with mounting astonishment the aDB Engineering report dated April 20, 2017, on their investigations into the causes of the collapse, which occurred on 29^th May, 2016.

The level of incompetence described in the report is so widespread that it brings into question the integrity of all other structures in the development. All staff, from carpenters to engineers are included within the ranks of the incompetent. The sub-standard construction was clearly visible to all, but nothing was done to rectify the errors.

The collapse occurred in the lower portion of the draft tube as shown on the following Figure1, copied from Figure 2 in the aDb report. In this area, the water passage changes from a vertical expanding cone to an almost horizontal expanding rectangle as shown in Figure 2. It is the most complex double-curved shape in the project and very difficult to build.

For small turbines, the shape is formed in timber, with an east coast shipwright engaged as the carpenter foreman. A shipwright carpenter is the only person capable of cutting and shaping the timber to the required complex shape.

WHY THE BERN COFFEY AFFAIR IS BEWILDERING

The Bern Coffey debacle is mind-boggling. But it leaves two important facts exposed.

First, Ball approved the untenable arrangement with Coffey permitting him to continue his law practice. It is one thing to allow for a winding-up period, quite another for the Clerk of the Executive Council to be moonlighting - in a court of law where he would be obligated to argue against his employer.  

Second, just as the Government was taking some initiative to hold Nalcor to account, the brutally incompetent Crown Corporation has, again, been let off the hook as far as the MF Oversight Committee is concerned.

With Coffey’s intervention, the Committee had finally gotten two capable members. Likely, the appearance of three ‘naysayers’ on the Muskrat file was causing some people to sweat. Likely, Coffey was outed but he and Ball ought never to have afforded Nalcor - or the Opposition - that opportunity.

Now, the former Deputy Minister of Natural Resources under Dunderdale - who played messenger for Ed Martin, sending Nalcor's requisitions to Cabinet - is head of the Oversight Committee. Ball confirms, again, he is gutless.

BE CAREFUL COMPARING MUSKRAT WITH TROUBLED HYDRO PROJECTS ELSEWHERE

Site C Hydro Project, B.C.

Hydro projects underway in British Columbia and Manitoba are making waves among observers, all drawing parallels with the Muskrat Falls project. While there are many similarities, the public should be careful in concluding that Muskrat is entirely their mirror image.

Each has origins inextricably tied to gung-ho engineers, compliant bureaucrats, and politicians unwilling to subject self-serving assumptions and overbearing risk to professional and objective review. This is bad enough, except Muskrat will be forever dogged by the deceit that underscored project sanction.

We’ll come back to that point, but others are also instructive.