SECRET “MANAGEMENT RESERVE” FOR MUSKRAT UNCOVERED

If there are still surprises hidden deep within Nalcor’s crumbling walls, recent information obtained by this blogger under ATIPPA has brought at least one more of them into the light. (Another is that the once-limp Muskrat Falls Oversight Committee is exhibiting serious signs of life!)

Documents obtained from the Oversight Committee suggest that Nalcor may have maintained a secret “Management Reserve” budget for a category of risk known as “Strategic Risk”. The Reserve was kept out of the estimates for the project and placed under the control of the “Gatekeeper”, presumably the former Nalcor CEO, Ed Martin.

Nalcor evidently understood that such an allocation had important budgetary implications for the project - and for their ability to sell the scheme. But its importance was too great to let the public know anything about it.

The fund was not revealed to the PUB during examination of the DG-2 estimates — or later. 
But, in addition, Nalcor also did not disclose any allowance for Strategic Risk in their DG-2 estimates, DG-3 estimates, or any estimates provided to the public prior to 2016.

Why would any category of project costs have been kept secret, or excluded?

ENGINEER OFFERS JUDGE LEBLANC POINTS TO PONDER

Guest Post by Phil Helwig, P. Eng.

A year ago I started an article in reaction to Danny William’s speech to the Board of Trade but never completed it.

Now that Nalcor’s management of Muskrat Falls will be scrutinized. It is timely to examine some issues for the investigation.

CONFUSED MINISTER AND A CANADIAN SOLUTION FOR NORTH SPUR

Cabot Martin and his geotechnical engineering advisors are at odds with the Minister of Environment and Conservation, Dan Crummell, on some pretty important issues. I have briefly summarized two of them here, but readers are offered full access to the documents via the links provided below.

The two issues mentioned are:

a)      The Minister claims Nalcor Energy has conducted a proper risk assessment of geotechnical conditions at the North Spur. In his July 30^th 2015 reply to Cabot Martin’s Letter of July 7^th 2015, Dan Crummell says Nalcor has conformed to the Canadian Dam Association (CDA) Dam Safety Guidelines. The advice Martin received suggests that those Guidelines are applicable to “man-made” structures. In other words, they are appropriate for the two concrete structures which will constitute the southern portion of the dam only; not for the North Spur.

b)    The dam break study which Nalcor commissioned Hatch Consultants to perform, and on which the Minister Crummell relied, is based upon arbitrary assumptions which Nalcor insisted the Study should contain.

Let’s look at those two issues more closely and consider a Paper by a Canadian engineering icon which offers a process to resolve them.