Money flowing for Muskrat Falls

James McLeod
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No formal sanction yet

Natural Resources Minister Jerome Kennedy fielded yet more questions on the Muskrat Falls project Tuesday in the House of Assembly. After question period he spoke with reporters. — Photo by Gary Hebbard/The Telegram

The provincial government continues to insist no final decision has been made on the Muskrat Falls project, but Tuesday afternoon politicians heard more news indicating that things are full steam ahead.

Natural Resources Minister Jerome Kennedy told the House of Assembly during question period the government has transferred $45 million to Nalcor to pay the bills for preliminary construction work being done at the site.

A portion of that money will be used for oil and gas investments by Nalcor, but the vast majority will go to the Muskrat Falls project.

That announcement was a reversal for Kennedy. At budget time in April, the government set aside more than $600 million for Nalcor, but said that money would only be touched if the project was sanctioned.

“If sanction is approved, then part or all of the money could be spent. If not, then it won’t be spent,” Kennedy told The Telegram in April.


“If the project isn’t sanctioned then the money won’t be utilized — at least not for the Lower Churchill,” Kennedy said.

But Tuesday, he said Nalcor couldn’t wait.

Kennedy said Nalcor is building a road to the site, and if it doesn’t continue with that work now, there’s a real chance that it will lose a year as a result of the Labrador winter and be put way behind schedule.

Kennedy told reporters that despite the expenditures, the project is by no means a done deal. At the same time, though, he said Nalcor officials are telling the government this is work that needs to be done and money that needs to be spent.

“I certainly understand people’s concern there, and we’ve hired experts to deal with this matter,” he said. “While the concern is certainly valid, we also have to follow the advice given to us by experts. Mr. Martin and Nalcor officials indicate to us that we need to build this road or we’ll lose a year.”


Looks like a ‘done deal’

Liberal Leader Dwight Ball said from his vantage point, it certainly looks like the whole thing is a done deal.

“The actions of the government certainly suggest it’s a done deal when you see money, you know, just being transferred like this at a request from Nalcor,” he said.

New Democrat Leader Lorraine Michael, on the other hand, said she’s skeptical about whether the project will go ahead, because of continued delays when it comes to the province’s efforts to secure a loan guarantee from the federal government.

“Until we know if we have a loan guarantee, we have no idea if this project is going to go ahead or not,” she said.

“If we don’t get a loan guarantee, they’re in big trouble.”

Michael was also spending a lot of time during question period in the House of Assembly talking about Muskrat Falls. She said she wants to see a cash-flow analysis on the project examining costs and revenue streams. She said such an analysis was recommended by the joint-review environmental assessment panel before the government proceeds with the project.

“I find it very disturbing, really, because I think it’s absolutely essential that if a project is going to be approved that you know all the details of revenue and expenditure,” she said. “It was so important that the environmental assessment panel made it its No. 1 recommendation.”

Kennedy said nothing specific has been made public, partly due to the fact that there’s commercially sensitive information involved, but he assured reporters that the government has, in fact, examined the cash flow structure of the project.

“Nalcor has been in discussions with the bond-rating agencies in terms of the grade to be assigned to this project for borrowing money, and the bond-rating agencies engage in a very strenuous review,” he said.

“Also, I can tell you one of the reasons that the federal loan guarantee has take a long time is that they have engaged in a very significant economic analysis looking at everything from costs as put forward by Nalcor to revenues to ensure the economic viability and financial feasibility of this project.”

Kennedy once again said that the Muskrat Falls project won’t get a final green light from the government until the federal loan guarantee is signed, sealed and delivered.

“There has been no sanction to date,” he said.

“The premier has made it clear that the federal loan guarantee has to be finalized before we move to a decision on sanction.”

Twitter: TelegramJames



Organizations: The Telegram

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Recent comments

  • Tim Jamison
    November 21, 2012 - 17:37

    The Opposition made this the main issue of the last provincial election and they got severely trounced. The people have spoken, the project must (and will) go ahead. Now all the crying and protesting means nothing. It's background noise that will soon be drowned out by the construction machinery at Muskrat

  • Cold Future
    November 21, 2012 - 14:12

    John Smith, what a surprise that you dodged every comment and reverted to a cut and paste from your BS list. Could that be an indication of your depth? There were times you seemed to be associated with government-nah you would be too huge an embarrassment even for the PC's.

  • Winston adams
    November 21, 2012 - 12:08

    Cyril, I agree, that Kennedy looks uncomfortable, and also can't keep the changing costs straight in his mind. I would think his doubts have increased . He needs to refer this to the PUB, and I think he knows that is the wise thing to do.

  • Keith
    November 21, 2012 - 11:58

    I wonder who we elected to represent us in this government, the last I heard it was not Ed Martin so why should he be telling us when he needs money and we just give it to him. As I have said in the past this government woud not know how to haul itself out of the water if they fell in. I guess we voted for them and nowwe know why the NDP should be in office, they can't do any worse then the other two so called parties.

  • Cyril Rogers
    November 21, 2012 - 10:48

    The usual aspersions on people's integrity and intelligence by the usual proponents!!! I have heard it said by a few proponents that the name-calling and attacks on character is coming from both sides. NOT SO! Most character assassination is coming from the proponents' side, usually from anonymous hacks, and is always directed at the person, not what they say. Any thinking person knows that those with no basis for their argument tend to attack the messenger... that ought to be a BIG red flag for people who are not sure about this project. As for Jerome Kennedy, he is flip-flopping yet again and looks decidedly uncomfortable doing it. I watched his body language yesterday when interviewed by reporters....he was uneasy and avoiding eye contact...the mark of a person hiding something or feeling uncomfortable with his position. And so he should be! Officially, the Premier and Minister Kennedy are saying that the project is NOT sanctioned. Yet, their actions belie their words! And we are supposed to believe their rhetoric about why this is such a "great" project! A full public review AND a referendum is the only way to go....... so that we plebs can get to play at democracy.

  • Don II
    November 21, 2012 - 10:41

    The use of subterfuge and outright misleading information is how an unethical, corrupt and dictatorial Government operates. There are many questions to be answered about what is really going on behind closed doors regarding the Muskrat Falls project. However, unjustified secrecy and disregard for and outright manipulation of Government legislative authority is also common practice under a dictatorship. The Atlantic Provinces need an independent, secure and environmentally sustainable source of electricity. However, that electrical supply must be permanently affordable and free of any outside involvement and interference from Hydro Quebec. At present, the Government of Newfoundland has not been able to guarantee that is the case with Muskrat Falls. This situation is a blatant case of the Captain of the Titanic mentally pervading the Premier's office, it is full speed ahead because there are no Icebergs! Time will tell about that.

  • Dan
    November 21, 2012 - 10:10

    Sounds like John Smith is a PC MHA! Come on Paul and or Steve out yourself!! This project is going ahead no matter what anybody outside of the PCs wants, take yor medicine and shut up mentality is what the dictatorship is all about. Remember ABC in NL next election....gesh I hope there is someone decent to vote for :(

  • Cold Future
    November 21, 2012 - 09:38

    John Smith, " the premier said the DG3 numbers came in on target" How big is the target or how fast can the target move? $7.4 billlion ( including the $600 million loan contribution from big Steve ) is 20% larger that the $6.2 which was reported to have a 10% contingency to ensure it would come in at $6.2B when constructed. It has been reported that interest during construction has been omitted-An oversight or a fuddle?The revenue is secured from the taxpayer- it is a self sustaining project according to the premier and any revenue from spot market sales goes to the Nalcor fund. Do you supppose that our mainland friends will be generous and pay rates up to $150 per MW above going rates to help us taxpayers out to balance our books and provide some relief or will Nalcor be generous and provide rebates from their slush fund?

    • John Smith
      November 21, 2012 - 12:33 will certainly be a cold future if this project doesn't get the green light. We have seen our bills increase by 70% since 1998...they will go up again theis march...and again this coming August...bringing the total increases to nearly 90%...yet not a peep from the Liberals, the NDP or anyone else about that? Why? Why qare those who are against Muskrat seemingly OK with our rates continuing to rise at alarming levels? I just can't understand it. Other than a blinding hatred and jealousy for former Premier williams...and a blinding hatred for the PC party...I just don't understand it. They have come forward with no viable studies reviews or experts nothing...nothing to prove that this is a bad project for the the bills keep going up...and the price of electricity keeps going up....all approved of course by the naysayers beloved PUB...LOL...

  • saelcove
    November 21, 2012 - 09:27

    Nalcor is the government

  • Robb
    November 21, 2012 - 09:13

    Had to re-post.....did I read this right....???..lorainne michaels wants to see a cash-flow analysis on the project examining costs and revenue streams....???......all right, who told her to say that....??...come on stand up and admit what you did..........if michaels thinks that we think she would understand that, or any other form of economincs, then the joke would be on us. The ndp have no concept of econimics...they only have plans, big plans that they know will never happen. It is almost funny to think about.....anyway, I got to get back to work on this cost-analysis that I am doing.

    • John Smith
      November 21, 2012 - 09:27

      Her last name is Michael...not Michaels...however I totally agree with you that she is a weak and ineffectual politician. All I have ever heard from her is a rehash of what others have already vision for the province, no new ideas...just pandering for a few votes. I can't wait for the next election...then we will see what the orange wave was all about...

    • david
      November 21, 2012 - 09:32

      When socialists promote the discipline and and rigour of fundamental capitalism, you know things here are completely effed up.

    • Robb
      November 21, 2012 - 10:08

      Yo John.......don't know why I was thinking "michaels".....and I generally pride myself on correct spelling....anyway, I think we got the point across, and I guess time will tell.

  • Robb
    November 21, 2012 - 09:05

    Probably best for michaels to take her ball and go home out of it. Just what we need is more bashing of a great project.....but, if you believe the naysayers, we will be paying a million dollars a month to heat our stupid do they sound..........they must have a crystal ball (probably dwights head) to tell the future. But hey, the liberals and ndp need to do everything, anything to delay know their plan is to try a delay enough to get close to the next election, then continue on with their smear campaigns in hopes of swaying votes.....well guess what people, the more this is delayed, the more it will cost, and you don't need a crystal ball to figure that out. So move now before the liberals and ndp put us all in the poor house.......there you go, that is a good spin to put on it.....the more the opposition delays this, the more we will be paying in heat and light bills...

  • Concerned
    November 21, 2012 - 08:55

    Amazin isn't it. Billions of provincial tax/royality dollars being committed by this govt. & the people of the province have no idea how money is being spent & on what & when. Is there a non-profit nonpartisan indepedant financial group out there that can inform us; I bet you get enough donations to cover your light bill......

  • John Smith
    November 21, 2012 - 08:52

    Let's get that money flowing, let's get that project started...the Premier has said that if the DG3 numbers came in on target, then that was we are only waiting on the loan guarantee figures to finally put this to bed. If the oppostion can come up with some lightening strike out of the blue that will prove why this project should not go ahead...then let's hear far I have heard nothing....except for Yvonne Jones, and Dean Macdonald saying they are for the project.

  • Winston Adams
    November 21, 2012 - 08:49

    DUH---- or billions can be saved by customers with efficient heating at the rate of 120 million per year saving on by customers plus over 100 million per year on oil for Holyrood

  • david
    November 21, 2012 - 08:22

    After this is all said and done, we will reassess Churchill Falls with great admiration ---- this Muskrat fiasco will make the Churchill ripoff look much, much better a deal in comparison. And that's probably what we deserve. What fools.

  • duh
    November 21, 2012 - 07:41

    Maurice-billions will be spent to the banks or the oil companies-electricity ain't free

  • Maurice E. Adams
    November 21, 2012 - 07:10

    If stringent economic analysis is done for the federal government and bond rating agencies, why are ratepayers/taxpayers (those who will pay the billions to the banks, Nalcor, businesses, etc) kept out of the loop? What is there to hide. How many former politicians are and will be in on the hundreds of billions in lucrative contracts?

  • Cold Future
    November 21, 2012 - 06:43

    Lorraine my dear, the di is cast. Sanction is just a word for the imposition of the project upon the people.The loan guarantee is a definite because the project is so lucrative for mainland canada and Quebec in particular. There may be issues with the process of the loan guarantee. The feds need to wash their hands of the project cost overruns. The other complications are: should it be a one trime payment at the end? How do they not take an equity position to guard against the overruns and satisfy Quebec and the rest that they are being well taken care of too? Lorraine, keep on trucking though you may just be kicking a dead horse.