If there is any one thing related to the Muskrat Falls project that is, in my opinion, perverted, it is not government’s communications strategy, not government’s single-minded approach, not a poor leadership style by the premier.
Instead, it is Nalcor’s application of industry's decision gate (DG) project planning process.
The decision gate process was supposed to ensure that decisions made were based on a sound business case (and thereby be in the best interest of ratepayers).
However, Nalcor’s track record seems to have been one that has been focused, first and foremost, on ensuring that the project receives government sanction (and sufficient funds) to bring the project to a point of no return.
For the second (DG2) decision gate milestone, major project costs (such as interest during construction) were kept out of the decision making process.
For the third (DG3) decision gate milestone, certain project contingency costs were reduced from 15 per cent to seven per cent, and by so doing, project cost estimates were kept below Wade Locke’s $8 billion “not economic” estimate.
While Nalcor admits that it has long known about the problems associated with the North Spur dam, work leading to understanding the magnitude and probability of dam failure and the potential for designing an economically viable fix (geotechnical-type work) — work that should have been the very earliest engineering type work —was not completed until mid to late 2013 (six months after project sanction).
Furthermore, the cost estimate for the design and construction of a North Spur fix has still not been released, and Nalcor has reported that tenders for construction of a North Spur fix are not planned until 2014 — conveniently unknown to ratepayers (and possibly government) until well after another key project milestone (the award of a potentially “point of no return”
$1-billion contract related to the dam) has passed.
Also, information on actual cost overruns (rumoured to date to be very high) have not been released.
Accordingly, I would ask, if project financing (at reasonable rates, backed up by a federal loan guarantee) has not yet been secured, if the need for more power has not been demonstrated to the satisfaction of either an independent federal review panel or our own Public Utilities Board (PUB), if the so-called water management agreement with Quebec has not been shown to be on solid legal ground, if the decision gate process has not been properly applied, then on what basis has the Muskrat Falls project been sanctioned and on what sound, democratic/legislative basis does Nalcor have for the expenditure from the province’s treasury of a further
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$1 billion (that the province does not have) and that will most assuredly be a project tipping point — a point of no return?
Our provincial government needs (now) to move towards a more rational, needs/evidence-based approach to what others have described as the most important public policy issue since confederation.
While Premier Kathy Dunderdale recently said, in part, that she would not resign because “I have been given a piece of work to do by our party…,” I would suggest that her first duty is not to the party but to her fellow citizens.
It is the people, not the party, that the premier is here to serve.
If government is to look out for the best interest of ratepayers (as the premier claims), if the people of this province are to be protected, Muskrat Falls needs further, needs-based and evidence-based (and more independent) review and oversight.
Will our premier go into the history books as one who had a misplaced sense of duty, who abrogated her first and most important duty?
Will she put the best interest of ratepayers on the back burner and leave them to a premier in waiting?
You do have a piece of work to do — and your duty is clear.
Maurice E. Adams writes from Paradise.