The public
now awaits follow through by the Premier and the Minister of Natural Resources
on his call for a forensic audit. The audit would detail the origins and extent
of the “low-balled” estimates and confirm whose signature(s) authorized their
use.
In a
conversation with him recently, the engineer reflected upon his disclosure and the
response of the Government. Said he:
“Even though Minister Siobhan Coady
has already indicated she accepts what I have said as part of the narrative and
that she has questions, too, the Minister must know my warning was completely supported
by the EY Interim Report, which the Government commissioned.”
The engineer
continued:
“Essentially she had the same information
nine months before I spoke out on why Muskrat was failing so badly. And EY
actually said a great deal in what was just a preliminary report…the proof is
all there…it needs only the forensic audit to confirm time-lines, how the
detailed estimates evolved, and who signed off at each stage. But the outlines
of the low-balled estimates are there. Read the EY Interim Report and you’ll
see how deeply concerned EY was over the $7.65 billion forecast that Ed Martin announced
in September, 2015 which EY termed “not reasonable.””
Of course,
the Nalcor whistleblower was correct.
Following his
advice, I again reviewed the document EY gave the Ball Government on April 8,
2016.
Its
principal conclusions are well worth noting:
- “…that the September 2015 Forecast is not reasonable.”
- “…there is a risk of multiple-month delay to completion of the …transmission line… and risks associated with the remaining scope…”
- “risks on cost and schedule are not adequately reflected in the September 2015 Forecast.”
- “the current contingency level…is low…”
The Report also
noted that the all-important Schedules had not been updated in three years.
They were exactly
the observations which the Anonymous Engineer discussed with me back in January
2017, and more recently with CBC’s Anthony Germain. They constitute part – but
only a part – of the basis for having called Nalcor public utterances "Falsification
of information on a massive scale.”
A couple of
points need illumination.
Ed Martin
left the Nalcor CEO Post on April 20th. Stan Marshall was introduced
by the Premier the following day, telling the media he was “deeply troubled” by
the delays and cost overruns.
A key limitation on EY was that the Consultancy did
not have a mandate to review or investigate the development and approval of the
alleged $6.2B fake estimate used to obtain project sanction.
In his
recent CBC interview, Stan Marshall added what EY did not: "The estimate
was way, way too low. They would have never built it for that price."
Commenting
on Marshall’s remark the anonymous engineer suggests “estimates are not catastrophically low due to a mistake by a junior
employee. They are low by policy, design, intent, and decisions made at the
highest level in the organization.”
Nevertheless, the EY Interim Report served a second function beyond even its explicit warning
that project costs would dramatically increase.
In essence, EY had readied Ball
and Coady for the statements of the anonymous engineer. When he made his
allegations they had heard much of it before!
Still, for
some reason, the Premier and the Minister chose to stay quiet until the CBC put
a microphone under the Minister’s nose. Even then she said precious little
except to acknowledge that his remarks were credible and that she would await
direction from the Auditor-General.
For the
public it must be galling that the Premier is quiet not just on the long string of
falsification at Nalcor but on what may turn out, at the start, to have been as serious
as malicious fraud.
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Related to this article:
Muskrat Falls: Allegations of Phony Cost Estimates
Muskrat Falls Interim Report
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Ultimately the
public needs to understand that the observations which both the anonymous engineer
and EY reported are only the ‘results’ of what actually transpired. Those
reports do not confirm the origins – nor do they reveal what caused Nalcor to
engage in such a high stakes and protracted course of falsification or who
instigated the chain of decision-making.
The anonymous
engineer is careful to repeat his very simple message: “the cause of the
falsification reported on the Muskrat Falls project can be established only
through a Forensic Audit.”
The Government – the Premier and the Minister of Natural
Resources, owe an explanation to the people of Newfoundland and Labrador of
their long long silence As the Minister
said, the people need to know, and she needs to know.
The only way to know is to initiate a Forensic Audit.
