Well, another penny just dropped on the troubled Muskrat Falls project — a recommendation from a committee tasked with deciding what level of work needed to be done to limit the risks of methylmercury contamination as a result of the project.
But the cost? Well, think about as many as 76,100,000,000 pennies.
The numbers are mind-boggling, even given the project’s already-massive cost overruns. The work that’s being recommended involves stripping soil and vegetation from something like one-third of the reservoir’s area, and capping bog and wetlands.
Consultants SNC Lavalin peg the cost of that work at between $420 million and $761 million, not including things like contingency funds, contractor risk premiums and costs associated with additional delays to the project.
Some studies raise concerns that the work can’t even be done within the project’s current timeline for flooding the project’s reservoir; the number of times that consultants use the word “challenging” is extremely daunting. Part of the reason for the high cost includes concerns about contractors’ willingness to mobilize, ship and perhaps even purchase 300 pieces of heavy equipment for what would essentially be an intensive five-month contract. The studies suggest premium payments might be needed to start work on time, and they point out, “The lead time for new equipment could be the greatest challenge. If contractors need to order new equipment or ship in equipment from outside Canada and the U.S.A., the lead time could be as much as one or two years.”
Consultants SNC Lavalin peg the cost of that work at between $420 million and $761 million, not including things like contingency funds, contractor risk premiums and costs associated with additional delays to the project.
And delay means more interest payments and even higher future electrical rates.
That’s set against the backdrop of questions about the necessity of soil clearing that have come from Nalcor and its consultants in the past.
“As for soil removal, that has never been done anywhere,” Nalcor CEO Stan Marshall said in 2016. “That would require another environmental assessment. … It would be very costly. And there’s no scientific evidence that this would be beneficial. In fact, it might make things worse.”
At that time, consultants EY identified the need for additional soil clearing as a significant additional risk facing the project, one that the consulting firm wouldn’t even quantify.
The quantification’s here, and it’s fiscally frightening.
What does the provincial government say about the recommendations?
Well, they’ve got their talking points in order: the main message is that they’re taking time to review the work, and Environment Minister Eddie Joyce, in a Wednesday morning news conference, made repeated reference to the fact that not everyone on the panel was on side with the recommendation.
“Lack of consensus” were Joyce’s words of the day — that in itself might point out the direction the government is looking at moving in.
But the meter is running: if the work is to be done without shifting the entire project’s timeline, the project has to start by October.
