Wednesday was the day that cabinet ministers hate. The province’s auditor general released his annual report, a document guaranteed to be a collection of revelations about the government’s financial hiccups.
For some ministers, it can be a nice day to stay at home with the covers pulled over their heads.
This year’s report is no exception: there are the scores of retired teachers and retired public servants put back on the provincial payroll while still drawing a pension, and the fact that the Department of Natural Resources seems to have developed a habit of buying ATVs and snowmobiles that subsequently go missing.
All embarrassing, and all the sort of thing where government ministers take their lumps for a day or two and wait for the whole thing to blow over.
But at least one of the items that AG John Noseworthy looked at this year could be seen as a much more important infrastructure budgeting issue, especially as the provincial government continues to develop a final agreement on the Muskrat Falls hydroelectric project.
It’s the details of a different kind of infrastructure project, the idea of building a central broadband system for all provincial offices and agencies, an idea that garners much government pomp and circumstance.
Too bad it didn’t involve planning.
While the province set a price for the first part of that process — a series of strands of fibreoptic cable connecting the province to the mainland — it not only underestimated the price, but hugely underestimated what it would cost to connect the so-called “dark fibre” to meet the government’s broadband needs.
Here’s the AG’s take: “Our review of the government broadband initiative (GBI) indicated that no progress has been made with regards to operationalizing government’s fibre optic strands, i.e. they are still ‘dark fibre’ two years after the expected completion in 2008. The department estimates that the expected cost to operationalize the fibre has increased from $20 million to $26 million.” But that’s only the beginning: the estimates for the technology to make the strands worthwhile was even more wildly underestimated.
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“Furthermore, although during our initial review government had expected to fully develop government’s telecommunications infrastructure over a 10-year period with a cost of approximately $200 million (excluding Labrador), we found that there is no planned timeframe, and estimated completion costs for a single provider
solution had increased to $563 million (including $120 million relating to Labrador).”
The project was halted by cabinet. But you can’t really say it was halted because, apparently, there really wasn’t a plan. “We found that the department did not have a formal project plan at the inception of the GBI, nor did it develop one after the original concept changed,” the AG wrote. “This project plan would include such things as objectives, timeframes and estimated costs for completion.” The province insists its request for proposals was really a project plan, and responded to the AG by saying: “a new formal project plan for GBI is currently in development.” The project was started in 2007. The plan may appear in 2011.
Think about this: the cost to “operationalize” the dark fibre is now 30 per cent more than the government estimated. The new cost for the broadband plan was over the original budget by 221 per cent. But we’re supposed to believe the multi-billion-dollar Muskrat Falls project will be on budget? Don’t bet on it.