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Former premier and ministers’ testimony at Muskrat Falls Inquiry in conflict

Kathy Dunderdale after testifying in St. John’s Tuesday in Phase 2 of the Muskrat Falls Inquiry.
Kathy Dunderdale after testifying in St. John’s Tuesday in Phase 2 of the Muskrat Falls Inquiry. - Ashley Fitzpatrick

Kathy Dunderdale says $6.5-billion cost was communicated to cabinet

ST. JOHN'S, N.L. —

Former premier Kathy Dunderdale says she knew the expected cost of the Muskrat Falls project had run higher than $6.2 billion (capital) when financial arrangements were being settled in November 2013.

At the Muskrat Falls Inquiry Tuesday, Dunderdale testified she recalled few details from that time, but the number in her mind is still $6.5 billion at financial close. She said her cabinet would have been informed at the time $368 million in contingency for the project was used and the budget was going up.

“If we were over the $6.2 billion, the contingency had to be gone,” she testified.

She said it wasn’t communicated to the public at the time because large contracts were out for bid. The fact early contract bids had come in much higher than expected was labelled commercially sensitive information.

"...in terms of what we understood, what we knew, the comparisons we made, we really believed that we were making the right decisions and we had done the due diligence.” — Kathy Dunderdale

However, testimony of a move from a $6.2-billion to a $6.5-billion cost in late 2013 is in direct contradiction to testimony from Paul Davis, Derrick Dalley and Tom Marshall, who was Dunderdale’s Finance minister.

Former premier Tom Marshall prepares to testify for Phase II of the Muskrat Falls Inquiry in St. John’s on Monday.
Former premier Tom Marshall prepares to testify for Phase II of the Muskrat Falls Inquiry in St. John’s on Monday.

Dunderdale said she did not recall details of when exactly she became aware of the change, or the cabinet briefing. There are so far no written minutes showing the $6.5-billion amount before cabinet. At the same time, cabinet documents did not capture all information as conveyed and neither do the cabinet minutes, the former premier said.

She insisted she and the others were aware of changes in the project’s outlook.

“There’s no way I would know and my ministers would not know,” she said, when pushed again on the issue by Justin King, a lawyer for the former Government of Newfoundland and Labrador officials (the former Progressive Conservative premiers and ministers, not including Dunderdale).

Dunderdale added it pains her to also be apparently at odds with some senior civil servants, where documentary evidence has been referenced and testimony given, suggesting they were aware of overruns and did not pass on the information.

At the same time, there has been suggestion some of the bureaucrats’ documentation (including emails) were dealing with a separate issue and were misinterpreted.

Someone who might be able to shed further light on it all is the former clerk of the executive council (and since auditor general) Julia Mullaley. Her lawyer, Andrew Fitzgerald, and inquiry co-counsel Barry Learmonth both suggested her future testimony will be that she has “no recollection” of a cabinet meeting where all ministers were informed of a change in the project’s estimated cost to $6.5 billion before financial close.

Mullaley is scheduled to testify on June 6 (with the witness schedule subject to change).

“I just have to tell you what I believe to be true,” Dunderdale said, when told of Mullaley’s position.

While back and forth over the $6.5-billion estimate heats up, the project continues today at a current capital cost of $10.1 billion – far beyond forecasts at both sanctioning and financial close.

“I’m not satisfied that the project’s $10.1 billion. Let me tell you. And I’m still not certain how we got there,” Dunderdale said, adding she is interested in the findings of the commission of inquiry on the full run up to current cost. “But in terms of what we understood, what we knew, the comparisons we made, we really believed that we were making the right decisions and we had done the due diligence.”

Dunderdale resigned in January 2014, following the extended blackouts that became known as DarkNL. Marshall succeeded her as premier. He was followed by Paul Davis, who took over in September 2014.

Twitter: @TeleFitz


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