THE NEW RISK TO MUSKRAT: BLAMING THE JUDGE.

The latest Muskrat Falls Oversight Committee Report evokes all the excitement of yesterday’s breakfast. Released on November 22, 2018 it is a project status report to September 30. Where was I to find a sense of urgency in ancient history?

Gnawing at me, however, was Nalcor’s warning that the project Budget did not account for certain specific risks — chiefly protest unrest, unforeseen directives from Government and (wouldn’t you know it) the Muskrat Falls Commission of Inquiry. Those risks had been quantified by Westney Consulting as having a potential cost of between $170 million and $370 million. 

The Inquiry alone evidently endangers the MF Budget Estimate (that’s the $12.7 billion figure, not the one contrived) by between $45 and $165 million.

The Report having been read, I had a single thought of reflection: arrogance had overshadowed this project at the start and has never let go. Over the years, only aggravating self-aggrandizement could be heard from ill-suited cronies who might have rendered a more valuable service had public money never lifted them from their now-famed rendezvous: the Guvnor’s Inn. 

Would any Quarterly Report, or all taken together, have ever exhibited a Nalcor Executive or a Project Management Team anything but unbowed? Not likely. It took a long time – and it took a Judge - to release the air that has long given them elevation. The MHI Report, the Independent Project Review, Validation Estimating — heck, why couldn’t the public just be content with the secret edits toning down embarrassing criticisms? 

And so it is that the latest Quarterly Report is concerned not about Stan Marshall’s failure to take the reins of that “runaway train,” as former Justice Deputy Todd Stanley described the Crown Corporation. Nor is it about Marshall’s willingness to tackle the management team associated with the “debacle” (my word) or the “boondoggle” (Stan's word). Under attack is the Public Inquiry — a state-sponsored investigation, no less, of Nalcor's work. 

How could Stan Marshall have let this happen and choose to participate? How could Dwight Ball? 

Is Stan a loose cannon under Ball no differently than Ed Martin under Cathy Dunderdale?

And, anyway, how could risk be posed by the truth?

The compelling questions multiplied.

Why would the management team be distracted by a process established to bring full public attention to their accomplishments? 

In keeping with their (political) billing, don't they also deserve illumination — not in a George Bush Sr. context, as in “a thousand points of light.” Let’s not get carried away. I was just thinking of mere transparency for a group skulking far too long in the shadows. 

I could try and understand their reservations. But surely after three or four days on the Witness Stand and, in Ed Martin's case, having been given a stern lecture, too, isn’t the malady of shyness not already on the way to being cured?

What about the serious issues?

 The Oversight Committee states that, “The project is now largely in the installation, integration and static and dynamic commissioning phases which inherently carry associated risks.” It’s a mouthful, but it isn’t actually the biggest risk. 

I believe one far greater is that, having spent most of the $12.7 billion, the project management team may not have been diligent about oversight, especially as it relates to quality control and supervision of the contractors. Having settled once with Astaldi for more than $800 million, why is another $500 million-plus at issue with the very same company? Was nothing learned? Did no one care?

The Report points to others associated with the timeliness of the resumption of Astaldi's scope of work: the financial impact, the delay caused to other contractors, and the impact on the schedule. Ask any contractor if there will be lost time — and additional cost — associated with the ramp-up by Pennecon, the local outfit replacing Astaldi? Even Dick Westney could have been spared the head scratching over that question.

Then there's the need for a “resolution of commercial issues with GE.” Isn't it fortuitous that everything else is behind schedule, too!

What about those Synchronous Condensers — currently being knocked down at Soldier’s Pond due to some vaguely worded reason called a “lube oil contamination issue”? The Quarterly Report notes that it might also have an impact on the schedule. 

Could Nalcor be responsible for damages, having left a huge quantity of critical equipment on the dock at Bay Bulls for eighteen months, as a local resident has confirmed? Why was Mr. Westney not asked for his thoughts on this risk, I wonder?

There is no reference, either, to the risk inherent in the questionable stability of the North Spur; tracked is only “reservoir rim stability and the impact of changing water levels during impoundment.”

Indeed, the list of outstanding Risks is still quite long — and not at all complete.  

The Project reports that Contingency available to address the noted risks is just under $160 million. Turbine Unit 1 is still forecast to be Ready for Operation in December 2019.

We have the assurance — from Nalcor — that the June 2017 Project Budget will cover all of those risks, including the risks to the schedule. But, who believes Nalcor?

As to the “Additional Risks” including unforeseen government directives, protests, and the public inquiry, we are led to believe that those are the ones that matter.

Someone needs to tell Nalcor that they should stay focussed on pouring concrete and finishing the powerhouse – taking care of their business. They should stop interfering where they have no business. As to those “Additional Risks”, they are merely about obfuscation and diversion of blame. 

The “unforeseen government directives” referred to are policy matters.  A more mindful Government would have already told Nalcor that its days of being a “state within a state” are over. Except, given Ball’s deference to the rogue Crown, they may not.

Nalcor skilfully attempts to place the risk of protest at the feet of aboriginal groups. A more suitable heading for this line item might have been: “Risk associated with Nalcor's inept response to the Joint Review Panel Report.” The JRP identified a plethora of issues and processes that were ultimately ignored. Make that risk Nalcor’s dime.

Again, Nalcor's inclusion for Westney of the potential risk related to the ongoing Commission of Inquiry raises the bar high on arrogance. Their attempt to effectively shutter the Inquiry through the backdoor, having applied to the Commission to shield the public from the business of the Astaldi litigation and arbitration, further confirms that they possess a distorted sense of entitlement.

Neither the Premier nor Stan Marshall sees value in transparency or accountability. But the public should know that it was under such a veil that the Muskrat Falls saga received sanction.

Even at this late date, nothing has changed at Nalcor. But fair warning is given: watch out for even more cost overruns! And the culprit? Why, it is Judge Richard LeBlanc, of course!