The ’Rat jump

The Telegram
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Another day, yet another article about the Muskrat Falls hydroelectric project (colloquially known as the ’Rat Project), this time jumping by $800 million as reported in The Telegram on June 27.

The Nalcor CEO “assures people it’s still the cheapest option,” begging the question: at what point do overruns catch up with this mystical cheapest option?

That any government initiated project goes considerably over-budget should be no surprise, as there are really no consequences whether it is $800 million or much more, since this will be made up by the taxpayer. Of course, in any private enterprise budget overruns of this magnitude, whether through misjudgement, bad management, failure to anticipate, deliberate low-balling, general incompetence, etc., would result in a CEO being hastily shown the door by the directors and shareholders.

But for the ’Rat, the shareholding taxpayers have no say other than at election time, when money has been already spent and commitments made.

 I have tried to follow the discussion, in the media and in Nalcor’s publicly available documents, but find it difficult, being neither an economist nor a hydro engineer.

Also the arguments appear unclear, contradictory and convoluted, sometimes secreted behind the opaque curtain of “confidentiality.” There are, however, words of reason written by Ron Penney and David Vardy, two gentlemen I greatly respect.

I served under Vardy when he was president of the Marine Institute. Penney and Vardy are, in my opinion, without self-interest and only intent on an open discussion of the questions.

For me, so many questions remain. For example, what are the effects on flora and fauna of quantities of herbicides typically used along transmission lines? Or will the brush be cut manually, perhaps by an army of temporary foreign workers? Or will the towers be so large as to stand above the tallest trees and render clearing unnecessary? And if the towers are that tall will they be sturdy enough? If not, what happens when the towers collapse? And no matter how big and strong, we all know the outcome of any trial of strength between humans and Mother Nature.

As history shows, government involvement in what is essentially a major business enterprise can be “the kiss of death.” This is because there is no real accountability. Regardless of success or otherwise, the politicians who initiated the ’Rat will be long gone into the sunset with their pensions.

Of course, as they do for Churchill Falls, the history books will record the outcome, good or bad, and the politicians must live with the praise or criticism, something they are used to anyway.

I do not know about Nalcor’s benefits, pensions and severance arrangements, but I find it difficult imagining senior executives homeless on Water Street.

 In the meantime all the ’Rat’s owners and paymasters can do is sit back and watch with horrid fascination as events unfold and the cost continues to jump.

Perhaps it is a good time to invest in some serious home conservation measures, maybe look closely at the alternatives — propane, wood, oil. Even oil heating can be independent of electricity, or the furnace can be run by a portable generator — provided generating your own power is not illegal under the diktats of the Nalcor monopolistic regime.

 Or maybe we should just lay in a store of thermal underwear and woolly sweaters, remembering that regardless of conservation someone is going to have to pay the cost, whatever it is.

For this ’Rat the piper must be paid.


Denis Drown

St. John’s

Organizations: Marine Institute

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Recent comments

  • Cyril Rogers
    July 02, 2014 - 13:52

    Self-interest is much more lucrative for Mr. Martin and Mr. Bennett, given their annual salaries at NALCOR. I could not possibly see where self-interest is the prime motive for Mr. Penney or Mr. Vardy. Neither of these gentlemen stand to gain financially from this project, whether it flops…... or succeeds in a spectacular fashion. As for Maurice Adams, I see no profit motive for him either, and he is clearly acting out of concern for the wellbeing of the province. The question of "least cost" has been determined, from my perspective…. as the original estimates of just over $8 billion for MF would make it uneconomical….. and we are almost there, with multiple cost pressures not yet determined. It never was economical and no matter how many ways Mr. Martin spins it….it can never become profitable. The fix is truly in, and the "spin" by NALCOR is simply that. When the truth finally emerges, the entire administration at the head of NALCOR…and, indeed, the entire entity…needs to be relegated to the scrap heap. Unfortunately, it will be too late for a severely damaged economy…. but will anybody care?

    • Maurice E. Adams
      July 02, 2014 - 15:24

      As I understand it, the current Nalcor cost estimate is $7 billion -- not including $1.2 billion for interest costs during construction (which General Accounting principles says is supposed to be included). So we are already over $8 billion, plus the 50% cost overruns we must pay on the Maritime Link, plus interest on additional equity that government must borrow to finish the project, plus real cost overruns which will really just start to kick in now (likely billions more). And on on on it goes. (and thanks Cyril, I have no personal or business financial stake or interest in MF --- no more than any other citizen who is affected by paying for unneeded power built for the principal benefit of Nova Scotia and the mining companies)

    • Coleman Blease
      July 03, 2014 - 02:01

      When you make a rich government and thereby impoverish the people, or make a poor people, you reverse democracy and create dissatisfaction and discontent among the people, who are the masters, and not the servants, as some would have us think. Give me a poor government and a rich people in place of a rich government and poor people. For the past few years the idea seems to have been to raise the tax levy higher, make assessments higher, make more extravagant appropriations and spend the people's money uselessly, making both the people and the government poor, for the benefit of a few who hold special positions and draw large salaries, and who have been trying to create in our province an aristocracy, not of blood, not of brains, but of money. I beg you to change the course, and by so doing you will make for yourselves a reputation that the people will rise en masse and say to you, "Well done, good and faithful servants." You will have the chance to train a poor government when the Liberals take over. Don't let the Liberals privatize your water rights; only Nalcor.

  • Muskrat's Mission Accomplished (but he drowns himself in doing it...)
    July 02, 2014 - 04:55

    "Penney and Vardy are, in my opinion, without self-interest" and Ed Martin/Gil Bennett are out for themselves alone? I wish it all was that simple. No one is without self-interest (in my opinion) and if this opinion is wrong (as they often are) I predict that the rare humans without self-interest would be all but unknown to us (like Bigfoot) and never manifest as semi-celebrity solicitors in the seaport of Newfie John’s. Even Christ himself finally shouted, "DAD, why have you forsaken me!" In the name of Our King Dan I call bullshit. Self-interest is apparent in these courageous young firebrand lawyers as well as in the other constant dissenter - Maurice Adams. They want to sell us reams of legal-paper and heat pumps. They want a piece of the pied. Maurice has suggested that we finance heat pumps for those below the threshold of affluence and/or knowledge that usually ensures affordance and/or upkeep. I agree that “no matter how big and strong, we all know the outcome of any trial of strength between humans and Mother Nature” and find it remarkable that there is not a decommissioning plan/legislation for this project. It is my opinion that it will never be commissioned online before WWIII in E. Europe, and depression in N. America begins. My self-interest in spewing this conjecture is to promote my own conspiracy theories that will eventually help me sell books and advertising. I do not care about Newfoundland or Nalcor and will retire to N. Ireland with the money I make from brazen speculation. At least I will not submit you to relatively recent (Middle Ages) Lower Saxony Rattenfänger legend allusion but provide a relevant modern retelling of the original American creation myth of the Muskrat’s sacrifice: "Brothers and sisters," Nanaboozhoo said, "Muskrat went too long without air, he is dead." Unfortunately “neither an economist nor a hydro engineer” is educated to comprehend the full scope of this project and explicate it for the casual reader. Only a psychotherapist or folklorist – a bullshit-story expert – can do it. And you know there will be self interest at play, as always.

    • Maurice E. Adams
      July 02, 2014 - 08:37

      Enjoyed your comment "Muskrat's Mission", and this comment (which I posted a few days ago) does not disagree with your last 3 sentences, and perhaps explains even more so what I was trying to say. ............Here is my comment on The Telegram's "Muskrat Falls: good, bad and ugly" article :--- Maurice E. Adams June 28, 2014 - 06:02 "Watched a movie last evening (Edge of Darkness) where there was an expert who specialized in cleaning up loose ends for some very questionable characters. ....Part of his specialty was making things so confusing that nobody could ever figure out the truth. ---- That is Nalcor/Muskrat Falls --- and intentionally so. .... SO the question is --- why was and is it necessary to make the Muskrat Falls project so confusing that no one could ever figure out the truth?".... I think you are correct --- only a "bullshit-story expert" can do it. Unfortunately, they all seem to be employed by Nalcor.

    • Addicted to stinky political bull
      July 02, 2014 - 10:15

      Some philosophy for the confused: A Bullshitter like Danny Williams or Brian Tobin is more dangerous than a dozen Clyde Wells' telling the dirtiest kind of lies - according to the reference above. We do have the best bullshitters in Canada. We should have to pay Canada equalization payments for having this power that can bedazzle any mainlander. A Newfoundland politician with just the right level of rum in is better than the Vampires of True Blood at glamouring those credulous Canadians in negotiations. Ken Marshall had a couple awesome BS-letters in here. I demand more of the same. I'm addicted to it. Too bad they always drank that extra glass of negotiations....Muskrat will save the high rollers cash flow and lifestyle but send the ordinary joe packing. Resettlement now while you CAN sell your house for the value of the mortgage. Interest rates need to rise, and many pensioners need to die for the economy to survive. I say they will drive up rates before putting down old people. MF is for miners, by miners. Lois Hole has made a statement of fact about MF and the lack of windbreak left in new subdivisions that can cost you 10 to 30% more in winter heating. Is she a BSer like Maurice with the heat pumps. Is she just trying to sell us trees?