Monday, 4 May 2020


The construction industry continues to hum throughout the province during the COVID-19 pandemic. Some big projects enjoy no interruption, including Memorial’s Science Building. Then, too, the line-ups at COSTCO confirm the daily congregation of 300-400 customers and staff. In proportion, Walmart and Dominion Stores are equally well populated; all have implemented physical distancing measures.

In contrast, the Muskrat Falls project is dormant. Laden under $13 billion of debt (likely, more) Nalcor executives cannot employ even the management skills of a Walmart “Greeter” to keep the operation running.

“The safety of our workers and their families, our communities, and the public is of utmost importance to us,” read the Nalcor Press Release, as if the Corporation was gifted with an innate higher claim standard to social responsibility than do others.

The Muskrat Falls project, set up more like a small town than a construction site, is perfectly suited to having work continue under protocols designed for social distancing. Problem is, it requires a plan. It needs someone with the leadership skills to work out a solution. That’s one issue.

The Muskrat Falls Project is in deep financial trouble. The sheer mass of Muskrat debt makes solvency, without a big federal bail-out, all but impossible. Still, that is not a reason for Nalcor management take a nap as they use the COVID-19 pandemic to cover for their mismanagement.

This problem brings us to a third issue – the cost of the Project continues skyward; the truth of the cost overruns completely undetermined. Nalcor retains a large office staff and the Project retains well over a hundred high paid consultants - virtually all of them making, annually, $250,000 - $500,000 (some even more). Are they still on the project? Have any been laid off? What is the plan to get them off the payroll?  

Interest costs, alone, including Emera’s 8.4% return on investment, represents well in excess of $500 million per annum. That’s nearly $1.4 million per day. Nalcor confirms that 500 people were still working on the project - 350 people still living in the camps prior to shut-down. The camp is a major expense when, likely, local facilities, including vacant hotel rooms, suffice to provide domestic services for the final completion and commissioning stages. 
Nalcor CEO, Stan Marshall
Nalcor has announced no plans for when camp demolition will begin. Other contractor costs continue, too. There is no accounting for how much.

If Nalcor was a private company, you can bet your booties they would be moving their butts faster than a Texas posse to get the job done. As it stands, being squandered is a massive amount of public money as Stan Marshall and Gilbert Bennett take a COVID hiatus, with no end in sight.

In theory, a well-run construction site, using workers first quarantined in hotels for two weeks, could easily have kept the project going. The plan would include testing for the coronavirus prior to quarantine and at the camp site. The cooperation of the Union would be necessary but, with bonuses on tap for those willing to work for extended periods, it is hard to imagine they would not be cooperative.  The cost of such a plan would be far less than the several million per day in interest, administrative and myriad other costs that a dormant site now runs through.

The Muskrat Falls powerhouse is many times larger than COSTCO; Muskrat offers a far better environment for physical distancing, too. The workers - managers, tradespeople, security, cleaners, cooks, drivers and a host of other occupations – relatively few are found at any single location. The site can operate 24-7 on a three or four-shift basis to reduce social contact. It is as ideal as any construction site; better than most. If MARCO can finish the Science Building on Price Philip Drive, Nalcor ought to have been capable of running a safe construction site, too. 

Likely, in the way of such a plan is OPM – other people’s money – and the knowledge that there are no consequences for those in charge.

Granted, even if the powerhouse was completed, the synchronous condensers aren’t installed properly. The software needed to run the LIL transmission line is still being written. A great deal of work remains. The hemorrhaging of public money continues.

Undoubtedly, the public is in a different space. COVID-19 demands their attention. Unfortunately, they have no leadership – union, business or politician – to ask the most basic questions for them: why can’t someone competent be found to get this job finished? Why can’t the public receive a new cost forecast? (For sure $12.7 billion is not the correct number.) Why can’t the second most basic element of any construction project – schedule – be spoken of, either?

Every day, CEO Stan Marshall impresses less and less.