Monday, 4 March 2019


On the Witness Stand at the Muskrat Falls Inquiry, former Premier Paul Davis displayed the confidence of one who believed he knew what he was talking about. A confident Derrick Dalley, the former Tory Minister of Natural Resources, succeeded him. Trouble is, confidence is no substitute for the good judgment they ought to have brought to their senior positions.

Expected was leadership worldly-wise enough to understand the need for a process that assured “oversight” of the project at the highest level. The decision required personnel of international stature that was “earned” — not “awarded” by Kathy Dunderdale.  

Little wonder that Davis was once dubbed the “Corporal Premier” on this Blog, having admitted to the Inquiry that his chief source of information on Muskrat was Dalley.

Talk about the blind leading the blind. The Telegram reported Dalley admitting, in 2014, that he didn't need “to see the report of the Independent Engineer… because he was already confident with what Nalcor officials were telling him.”

By and large, the public don't expect politicians to understand technical matters. They do expect, however, that an initiative is done for the right reasons (good policy) and that the public interest is protected. 

On any practical level, lay people who find themselves installed in high office would know that that an expenditure of $7.4 billion holds high risk for the public treasury. Lay people are also capable of distinguishing “qualified” and “independent”.  They would not consider Nalcor CEO, Ed Martin, as the best person to appraise his own skills or those of his management team.

Likely, too, lay people can deduce that a committee of public servants — advised not by an engineering firm but by accountants — is not the best way to install oversight on a complex megaproject. Beginning with the Cabinet Clerks, they were careerists who would not risk telling truth to power. The politicians liked it that way.

Even this shallow process was not established until March 2014, long after Sanction, five months after “Financial Close”. Hence, the Government missed the critical period when, according to Grant Thornton, Nalcor still had time to reconsider the cost and schedule and turn back.

Premier Davis took no initiative to improve on what this Blog then referred to as “fake” oversight installed by Premier Tom Marshall who acted not because the project was in disarray but due to public pressure for a check on Nalcor.

How could each Premier not perform the best due diligence possible on Muskrat, having been warned of cost overruns via Ed Martin's nebulous phrase “cost pressures”? Were they wilfully deaf as well as wilfully blind?

A weak and flat-footed Premier Dwight Ball undertook at least some project review, having arrived on the eighth floor.

The truth is that on the very day that Premier Danny Williams instructed Ed Martin to build the project, Muskrat was orphaned by the Government. Not one Tory Premier or Natural Resources Minister had a clue what to do, except to defer to him.

Had Dunderdale taken oversight seriously, doffing the blinders that shielded her from the selected information that constituted Martin's briefings, she might have been able to perform push-back on his request for premature sanction. She could have benefitted from the certainty that comes from detailed engineering, advanced procurement data and bid prices — not to mention clarity from the Nova Scotia PUB or with respect to Water Management.

Three occasions during Davis' and Dalley's evidence are especially instructive in their ignorance of oversight requirements and practices.

The first was in reference to Commission Counsel's questions to Davis about Schedule delay, during the discussion of Astaldi's slow ramp-up. Davis stated that Ed Martin had always exhibited “confidence” that the time could be made up. He made no reference any “proof” or of a “process” that influenced this conclusion.     

The second relates to this comment by Derrick Dalley: “We made decisions on the best information that we had. We felt that information was right.” “Best information?” Without an experienced advisor — or several? Without a consistent, skilled and independent process of verification? When does “felt [it] was right” substitute for good data and analysis?

The third occasion was a statement by Paul Davis telling Commission Counsel about all the “oversight” that the project had received. Inexplicably, Davis included in his enumeration the “project management team,” when they were the ones who needed constant watch.

He added the Board of Directors of Nalcor (except that they were begging the Government — in writing — to supply Board Members having  megaproject expertise, to which request successive Premiers, including Davis, failed to respond).   

Davis continued that the oversight included “internal auditors” and “external auditors”. He seemed unaware that the oversight function needed by the Premier was not related to accounting, except for cost.

He added the Auditor General to the group, too — except that the AG publicly stated that his review was administrative and not related to Muskrat.

Next, Davis invoked the oversight provided by the Independent Engineer — except that the IE was looking after the Federal Government’s interests and was reporting to Nalcor (who were editing and changing the IE’s Reports for the most favourable “spin”; a fact reported on this Blog and confirmed by Grant Thornton).

Finally, as if Commission Counsel was supposed to fold his tent in deference to one so wise, Davis invoked the Oversight Committee — which, as we have noted, was comprised only of compliant public servants, none being a Professional Engineer.

Adding to the silliness back in August 2014, Premier Tom Marshall went so far as to include Emera and SNC Lavalin as “form[s] of oversight”.

When even Premiers neither understand (nor want) oversight of a killer project for the Treasury, the public might want to begin considering limits to the level of “risk” they should be allowed to engage our behalf.

They would be wise to keep the threshold low. Of course, there is no antidote for those who don't know what they don't know.