Sections

Letter: Legacy or infamy?

Published on January 14, 2017

Word association is an interesting game or psychiatric evaluation tool. For example, the word “dominos” can conjure up the famous board game, or a famous pizza chain, or the notion of falling dominos. For me, it’s the latter — the idea of the domino effect — which almost immediately leads to Muskrat Falls and a string of other related thoughts. Let me elaborate.

From the beginning, the Muskrat Falls mega-project could be characterized as a series of decisions, events, incidents and characters, each one playing the dual role of being a result of some previous happening and then the cause of a subsequent inevitable occurrence.

At various stages of this entire fiscal and economic nightmare, various project characters, politicians and pundits have been assigning blame either for certain aspects or for the whole of the project.

There is lots of blame to go around, but despite the definitive and mounting evidence, those who are culpable will never shoulder the responsibility for this boondoggle and there will never be real accountability.

In the context of the domino effect, I’d like to focus on the first domino — the term sheet agreement signed Nov. 18, 2010 between Newfoundland and Labrador, Nova Scotia, Emera and Nalcor. The driver and main signatory to that catalyst agreement was none other than then-premier Danny Williams.  

Whether by accident or design, his push of that first domino did not quite set off the inevitable chain; within a week, he surprisingly quit as premier. But alas, his handpicked proxy, Kathy Dunderdale, reset the first few dominos and by the time she announced formal sanction in December 2012, the boondoggle had begun.

Williams showed no reluctance to exert influence on his “legacy” project. He was quick to publicly trounce the Public Utilities Board when it refused to sanction Muskrat Falls. He was in the gallery when it was sanctioned in the House of Assembly, and in the first row at an announcement with pomp and ceremony in the Confederation Building lobby on Dec. 17, 2012.

And, in flagrant violation of his own advice that former premiers should “shut up and go away,” Williams broke his silence on Muskrat Falls in 2016, referring to it as being akin to our “heritage fund.”  

Clearly, Williams was the architect, driver and champion of Muskrat Falls. His promises of the project providing us with least-cost electricity rates, circumventing the Hydro-Québec stranglehold on hydro-development, and being a fiscal and economic game–changer, all ring hollow now.

In addition to remaining pre-existing controversial issues (North Spur, methylmercury, the water management agreement, export of surplus power), we now have a project more than two years behind, with a more than 84 per cent and still increasing escalation in cost overruns and at least a doubling of the domestic power rate by the time of its completion.

It’s not that no one saw this coming.

A joint federal-provincial panel concluded that Nalcor failed to demonstrate “the justification of the project as whole, in energy or economic terms.” The PUB refused to render a decision due to lack of information. This newspaper, through its editorial staff, reporters and many writers (including brave souls like Dave Vardy, Des Sullivan and Cabot Martin) raised the right matters and asked all the right questions.  

This boondoggle was predicted, but no one was listening.

Now that we have been gobsmacked by reality, public support for the project is dwindling. The CRA poll released Jan. 5/17 indicated that Muskrat Falls is now not supported by most citizens.

Since then, the original Astaldi contract has increased by a whopping $700 million and Ian Lee of the Sprott School of Business at Carleton University has warned the fiscal impact of Muskrat Falls will be so devastating, it will require a federal “bailout.”

The next poll should see a nosedive in support, and it will reach its lowest point when Newfoundland Power sends out those first bills in 2022.

I suspect Williams was thinking when he signed the term sheet in 2010 that it was a day of legacy building. It is looking more like a day of infamy.

Inexorably, by 2022, Muskrat Falls will supplant Churchill Falls as the worst mega-project in Newfoundland and Labrador’s history and Danny Williams will be its worst premier.