RON PENNEY CHALLENGES THE SALE OF MILE ONE

 Guest Post by Ron Penney

“If something seems to be good to be true, it usually is.” 

The Sale of Mile One. 

I’ve been following with interest the continuing war of words between Dean MacDonald and the City about his wish to “purchase” Mile One, add additions to the building, and eliminate the public subsidy. 

I’ve been often asked about my thoughts on this given my involvement with the building of Mile One and the Convention Centre and its operations, during my tenure as the City Manager with the City of St. John’s. 

Most people think that the sale of Mile One is a no-brainer. What’s not to like about it? Getting rid of a “white elephant”, eliminating the subsidy and revitalizing the building. Who could be opposed to that? As I will demonstrate it is a lot more complicated than it appears at first and it shouldn’t be sold. 

FINANCIAL REALITY LOST IN LEADERS' ELECTION CHATTER

As much as Newfoundlanders and Labradorians heading into a new General Election are hoping, wishing and praying for the status quo, change is what they will get. That is the case regardless of who wins.

That is a view you won’t hear from the Party Leaders. You'll need to decide whether to read on.  

The Province has lost thousands of people, especially since the ‘60s and ‘70s, and more following the cod moratorium. The latter were mainly tradespeople and other workers who looked westward for their pay cheques, earning the ascription “rotational” workers. Leaving, they looked back at a society that had not figured out how to leverage a huge fishery and other natural resources into enduring wealth and jobs.

Then, and later, in the pubs and occasionally on the hustings, as offshore oil development created new optimism, debate was rife over how we might hang on to what was left of our rural character against the steamroller of big oil and swaggering oil men.

Back then, too, unemployment was high and wages low. The Government delivered services meeting no one’s expectations. Still, many had seen a lot worse. And, as tough as it was, there was a grounded-ness in how we, and our politicians, behaved.

TIME FOR A REAL WAR ON COVID-19

The Chief of Defense Staff – aka Commander of the Canadian Army - should be involved in fighting the war on COVID-19; the Prime Minister and the Premiers should step back, at least a little, as coordination to combat the spread of the virus seems both late and fragmented.  

After three weeks, we only have the dulcet tones of the Prime Minister and the Premiers. They are doing a good job of staying in touch with Canadians, but as to a coherent plan that will save lives and get the public back to work, there is none. In particular, knowing that one person can infect dozens, no regime exists to stop people from engaging in irresponsible behaviour.  

UNDERSTANDING THE BALL-O’REGAN RESTRUCTURING PLAN

Guest Post by David Vardy
Former CFO Derrick Sturge told the Muskrat Falls Inquiry the project and its financing were “rock solid”. CEO Stan Marshall told us two years ago the project would “finish strong”.

Premier Dwight Ball promised “Newfoundlanders and Labradorians that they will not bear the burden of higher electricity rates or taxes as a result of Muskrat Falls. We will deliver on that promise.”

On February 25, 2020 Nalcor CEO held a press conference and took questions from the media confirming the delays which had already become well known. He did not provide a cost update on the project, which appears likely to exceed the official 2017 estimate of $12.7 billion. He repeated the statement that Nalcor would “finish strong”.

DWIGHT BALL MOVES ON. GODSPEED. GODDAMN.

When political leaders step aside, expectations of them, however fanciful, are withdrawn; civility requires us to wish all, including Dwight Ball, godspeed. But while some leaders are quickly given the peace they seek, others warrant the lament popularized in the now famous lyric by Ron Hynes: “Godspeed. Goddamn.”

It wasn’t as if this Premier rose to the status of First Minister on a wave of expectation. He didn’t defeat a leviathan in Paul Davis. The public just needed to rid themselves of a godawful government in a province where good governance is a rarity. The new broom had represented at least the possibility of hope.  

WHEN DOES DECEPTION BECOME A CRIME?

Guest Post by David Vardy
Have Nalcor and government officials transgressed against the law or have they simply neglected their duty to serve the province, notwithstanding the consequences of their actions? That is the question. 

Section 7 of the terms of reference of the Muskrat Falls Inquiry reads as follows:

“The commission of inquiry shall not express any conclusion or recommendation regarding the civil or criminal responsibility of any person or organization.”

This suggests that any action based on legal transgressions must begin outside of the Inquiry. As the Inquiry progresses through its second phase there may be evidence which will point clearly to violations of civil and/or criminal law. The question now is whether sufficient information has been compiled to determine what recourse the people of the province have as a result of the injury and damage to the public good.

PIXIE DUST SHOWERS SPRING ELECTION

Except for the ardent cynic, a sprinkling of magic transforms even the dullest bore. The Liberals hope that the majority of us still believe. That may explain the recent resplendent shower of pixie dust.

In February an MQO opinion survey put the Liberals (44%) and the Tories (42%) in a virtual tie. What has changed since then to bolster Liberal fortunes? Why call the election now rather than later? Why are Liberal election missiles falling from the sky?

In all likelihood, the numbers were not as bad for the Liberals as the MQO Poll indicated. While polls are a mere snapshot in time, any analysis gets weaker as statistics are bundled. The MQO Poll combined “decided” and “leaning” voters. 

PUB REJECTS ROLE FOR COALITION IN RATE MITIGATION ISSUE

Guest Post By Muskrat Falls Concerned Citizens Coalition

When we applied for standing at the PUB hearing on rate mitigation we expected that the Board would welcome a broader spectrum of views than other intervenors could offer. We were surprised and disappointed to be turned down when the Muskrat Falls Concerned Citizens’ Coalition (MFCCC) application was rejected. The Board’s response of March 26, 2019 reads as follows:

TOWNIES vs BAYMEN – WILL TEMPERS FLARE?

Guest Post by PlanetNL
PlanetNL24: Time to Rezone the Island Grid


The matter of backup power needs on the Avalon, as analysed in PlanetNL23, brings into focus a bigger issue about fairness to the many off-Avalon ratepayers.  Nalcor’s Reliability and Resource Adequacy Study confirmed that Muskrat energy is to be delivered specifically to the Avalon end of Island grid to meet Avalon power needs.  The future addition of new Combustion Turbines (CTs) is also a response to  an Avalon-specific risk issue. The issue is not a new one – just an ignored one.  

The high cost Holyrood Thermal Generating Station existed principally to satisfy Avalon winter power needs while the off-Avalon portion of the Island Interconnected System (IIS) was essentially self-sufficient on low cost hydro-power.  Despite this inequality of need and inequality of cost of power, all IIS ratepayers pay an equal rate.  With Muskrat rate increases just around the corner, it’s time to put this issue under the spotlight and propose a fairer allocation of costs.

POLL CLEAR AS MUD BUT LIKELY CANCELS SPRING ELECTION

Is anyone surprised that the latest MQO Poll places both the Liberals (44%) and the Tories (42%) in (possibly) a statistical tie? While neophyte PC Party leader Ches Crosbie has had an uninspiring start, which — for the Tories — aligns well with a non-performing Government, why would the public be in anything but a “show me” mood? 


The Premier's approval numbers testify to the legitimacy of the questions. MQO gives Ball’s leadership a “relatively steady… mean score of 5.2 [on a 10 point scale] this quarter”. Crosbie, in spite of his inability to light any fires, oversees a jump in support of 7% as the NDP races to the status of non-entity. 


MQO comments that declining support for the NDP reflects in the Tories' gain, but that is tantamount to suggesting change in the chemistry of oil and water. More likely, a pervasive leadership vacuum is adding room for fluctuation in the popularity of the two traditional Parties, it being left to both mainstream and social media to set the public agenda based on whatever passes as news.

THE TAIL WAGGING THE DOG

Guest Post by Ron Penney

The Tail Wagging The Dog: 

Reflections on Phase 1 of the Muskrat Falls Inquiry

The Muskrat Falls Inquiry has competed Phase 1 of the hearings, which focused on the events leading up to the sanction of the project on December 17th, 2012.

We hadn’t fully understood before the depths of hatred and contempt towards us arising out of our early warnings about the dangers of the path that we were on.

A senior federal public servant told us in 2011 that the tolerance for dissent in Newfoundland and Labrador was very low and that proved to be the case. So much for the notion that “dissent is the highest form of patriotism”. We were treated as unpatriotic because we opposed what has been turned out to be the worst public policy decision ever made in Newfoundland and Labrador.

"ANONYMOUS ENGINEER" IDENTIFIES DEVICE USED TO LOW-BALL ESTIMATE

EDITOR'S NOTE: The author of today's article is the whistleblower, dubbed the "Anonymous Engineer", who disclosed – on this Blog - falsification of the estimates for the Muskrat Falls project. That was January 30, 2017 . His comments were recorded in a post entitled Muskrat Cost Estimates "A Complete Falsification". A second post called Muskrat: Allegations of Phony Cost Estimates provided significant additional details of low-balling which ultimately were used to justify the Sanction of a project that has become a scourge on the Province's economy. His alarming assertions have been supported with revelations which emerged from Phase I of the Commission of Inquiry. This article attempts to shed light on an issue that is likely to be assessed during Phase II, often referred to as the Construction Phase. — Des Sullivan

Guest Post by the "Anonymous Engineer"

Impact of Labour Productivity on 

"Base Estimate" for the Muskrat Falls Project 

It is almost two years to the month since I spoke with the host of the Uncle Gnarley Blog, Des Sullivan, and subsequently with Anthony Germain of the CBC Morning Show. At that time I revealed that  the estimates on which the Muskrat Falls project was approved were low balled and falsified. I am confident that those statements were heard at the political level and that they might have influenced the Government's decision to  commence the Inquiry which, of course, I have been monitoring. 

RATE MITIGATION - GRASPING AT STRAWS

Written by Des Sullivan and David Vardy
(with research and analysis contributed by PlanetNL)

The Ball Administration asked the PUB to examine alternatives to offer ratepayer relief from unaffordable Muskrat Falls power. Because the cost of rate mitigation is too large to be imposed on either ratepayers or taxpayers — not that they can be distinguished — the public should be wary that the PUB is possessed of a magic wand. The Government has essentially kicked the “mitigation” can down the road, too.

Having declined to suspend the project to examine the wisdom of continuation vs termination, the Premier was right to engage the PUB for the purpose. Unfortunately, the Provincial Government offered the PUB and its Consultants absolutely no guidance as to what interventions may be available from them or the Federal Government. Even a plethora of nips and tucks won’t suffice given the magnitude of the problem, yet they must know that MF threatens not just the public welfare but our collective solvency and, hence, the Province’s sovereignty, too. 

FINANCE MINISTER SHOULD LET EVERYONE SHARE IN THE GOOD NEWS

VOCM, in a year-end news story, quotes Finance Minister Tom Osborne saying that “the province has made some significant progress in the last three years in knocking down the deficit.” The Minister asserts that “in each of the last 3 years they’ve eliminated $2-billion from the deficit.”

Perhaps such comments should be dismissed as election fever builds and the propaganda machine is stoked. However, I do remember the Premier stating his commitment to transparency, and it is in that spirit I’m hoping the Minister will release details of his quite fantastical assertion.

Could he also inform us why killing the deficit had to be such a painless exercise? How will we ever learn not to repeat the last decade of fiscal irresponsibility if correcting financial recklessness is done so easily?!?

Of course, I am being facetious.