Nalcor Energy issues contract for inspection services
Muskrat Falls artist's rendering
At Nalcor Energy’s annual general meeting earlier this month, president and CEO Ed Martin said construction on the Lower Churchill hydro project is on time and on budget.
Keeping it that way is the challenge.
Conducting quality assurance and monitoring costs on a multi-billion-dollar project is no simple task. For the Lower Churchill development, Nalcor is not tackling that task on its own.
The Crown corporation has a team working side by side with engineering, procurement and construction management contractor SNC-Lavalin, Nalcor vice-president and project lead Gilbert Bennett said in a recent interview.
Now, Nalcor also has sub-contractors chronicling the progress of major project elements in development worldwide and pushing to identify, early on, problems that might hike overall project costs.
A contract for “the provision of third-party quality surveillance and inspection services” for the Muskrat Falls dam and surrounding construction was awarded to four companies March 18: GL Noble Denton Canada Ltd., out of its St. John’s office; Moody International Ltd. out of Calgary; SGS Canada out of Montreal; and Killick Group of Mount Pearl.
“This work here is really quality assurance. This is sort of nuts and bolts, part of our process to validate that we’re getting what we need from our suppliers,” Bennett said.
Four companies are being tapped, he said, because they have expertise in different areas key to the project’s success. The companies will be involved in inspections and non-destructive testing at the manufacturing sites.
They have international experience on major projects. GL Noble Denton Canada, for example, operates out of offices in St. John’s, Dartmouth and Calgary with a focus on the oil and gas industry, but its parent has provided quality assurance on projects in Australia, Oman, Mexico and Norway.
The Killick Group has more than 40 years of experience and has worked on local projects such as the Voisey’s Bay mine development and offshore oil works at White Rose. It has also worked on major projects in New Zealand and Cuba.
Cost is a main concern, since a poorly manufactured product will be rejected and replacements or upgrades would have to be completed. The result is likely a delayed project timeline, or early breakdowns. Ultimately, it would be more money from Nalcor’s end and higher costs for the province.
It is the same reason, Bennett said, Nalcor staff regularly meet with the manufacturers for the largest pieces of the project, including the turbine generators for the powerhouse at Muskrat Falls. Andritz Hydro was awarded the contract for turbines and generators in January.
“So (Nalcor staff) provide a level of oversight. We have quality people who look at the processes, we look at how contractors are addressing quality through audits and we have (purchased) services as well. If you think about where we’re going, safety, environmental performance, quality are key issues for us,” Bennett said. “We don’t want to have surprises in the field.”
Smaller-scope contracts falling within the Lower Churchill project also require their own quality plans, he said. They detail how contractors will track their progress and complete their work within an indicated timeframe.
Sometimes surprises come along regardless of the oversight put in place. Nalcor’s lead has said the corporation’s efforts amount to due diligence.
While massive amounts of information are flowing to the Crown corporation on project pieces, not all of that information is open to the public. In an effort to keep the public in the loop, Nalcor is providing monthly summaries of contracts and spending on the project website.
Outside Nalcor and the provincial government, the federal government’s independent engineer — a position established under the federal loan guarantee agreement — is also tasked with project oversight. A representative for the federal Department of Natural Resources confirmed the independent review work has begun.