Published on June 06, 2013
Nalcor Energy president and chief executive officer Ed Martin addresses the company’s annual general meeting at the Holiday Inn in St. John’s Wednesday afternoon. — Photo by Joe Gibbons/The Telegram
Published on June 06, 2013
Danny Dumaresque — Photo by Joe Gibbons/The Telegram
There is no way for an individual in Newfoundland and Labrador to scrutinize every last detail of the Lower Churchill hydro project.
That fact was made clear as Nalcor Energy held its annual general meeting at the Holiday Inn in St. John’s Wednesday
and, despite best efforts of the Crown corporation’s executives in responding to questions, many of those in attendance were dissatisfied.
The executives took questions in front of cameras, with one carrying a live feed online. Their responses often included references to a limitation on how much information they could convey, as a result of either legal agreements or commercial sensitivities.
The questions in Ballroom B were chiefly from a collection of people who have set themselves apart when it comes to the complex Lower Churchill project — studying the complex legal, regulatory and commercial aspects and challenging the plan on behalf of the public. The group includes, for example, former Liberal MHA Danny Dumaresque, former Tory MHA Jim Morgan and former public utilities board chairman David Vardy.
“I think the economics of this project are fatally flawed,” Vardy said on his first stint with the microphone. He submitted 16 questions ahead of the meeting, expressing some frustration at being able to ask only one during the event.
“People showed up with some very legitimate questions on several different subjects related to the project. Many of those questions were the ones I would have asked myself,” NDP Leader Lorraine Michael said after the meeting concluded.
“There was very little in the way of actual answers provided to the people in attendance,” she said. “I find it hard to believe shareholders of any other company in the world would be expected to put up with this treatment from the people who are spending their money.”
And yet they do. A standard annual meeting question-and-answer session would not include a company revealing confidential information such as the exact value of a contract on a capital project, though they often present cost ranges, or costs that include more than one contract so as not to identify any particular one.
During the question-and-answer session at the Nalcor Energy general meeting, Nalcor executives included as much direct information as they felt was reasonably possible.
When Nalcor CEO Ed Martin was asked to provide the exact value of the contract awarded to SNC-Lavalin for engineering, procurement and construction management, his response was direct.
“We can’t do that,” he said.
That information is considered commercially sensitive by the Crown corporation. In fact, the exact value of any individual contract on the $7.7-billion Lower Churchill project will not be released.
Lower Churchill project lead Gilbert Bennett could say little when asked for the expected cost of work on the North Spur — a land mass sticking out from the side of the Churchill River, acting as a natural barrier and funneling water into Muskrat Falls. Work to ensure its stabilization, after decades of study, is part of Lower Churchill project spending.
Asked to provide an estimate for that work, his response was straightforward: “No, I can’t, because we’re heading into a commercial bid process.”
The rule is: publicize what you expect something will cost, and you are sure to see contract bids above that publicized cost.
At one point, Nalcor chief financial officer Derrick Sturge was asked about credit ratings. The Lower Churchill project is currently being presented for financing with a
triple-A credit rating.
Before that top rating was acquired, he said, Nalcor collected what are known as “indicative ratings” — what would be expected if, for instance, there was no loan guarantee from the federal government for the project.
“Our arrangements with the rating agencies do not allow us to make those public,” he said. That is a stipulation of the agencies presenting the credit predictions, he added.
“I can’t fault anybody for asking questions and wanting the numbers because, again, it’s taxpayer dollars going into it,” Liberal MHA Andrew Parsons said when asked if he felt Nalcor executives were being secretive.
“At the same time, I can see what Nalcor’s saying in the sense that …there’s confidential information here. We cannot reveal that and it’s the normal course of business,” he said.
“But when you look at the fact that we can’t get inside Nalcor to get at this information, all we can do is ask the questions and hope that they’ll try to provide the information.”
The session was more than an hour past the slated cut-off time — more than an hour and a half into a question-and-answer period — when The Telegram left to make deadline.