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Government failed to ensure the best interests of the province’s residents were safeguarded: Muskrat Falls Inquiry Report

Premier Dwight Ball and Natural Resources Minister Siobhan Coady at the release of the Commission of Inquiry Respecting the Muskrat Falls Project  report.
Premier Dwight Ball and Natural Resources Minister Siobhan Coady at the release of the Commission of Inquiry Respecting the Muskrat Falls Project report. - Joe Gibbons
ST. JOHN'S, N.L. —

The long-anticipated report from the Muskrat Falls Inquiry was released to the public this afternoon.

Last Thursday, Commissioner Richard LeBlanc from the Commission of Inquiry Respecting the Muskrat Falls Project delivered a six-volume final report (more than 1,000 pages in total) — "Muskrat Falls: A Misguided Project" to the provincial government.

Premier Dwight Ball and Natural Resources Minister Siobhan Coady held a news conference this afternoon to release the report.

The report’s executive summary states that although the Government of Newfoundland and Labrador had publicly professed that a business case for the Muskrat Falls project would have to be established, in effect the government had predetermined that the project would proceed. In so acting, the government failed in its duty to ensure that the best interests of the province’s residents were safeguarded.

“Although the Government of Newfoundland and Labrador and Nalcor were united in their shared goal to proceed with the project, government had no capacity or strong inclination to effectively oversee Nalcor,” the report reads.

“Instead, it placed its faith and trust in the Crown corporation it had created. Before and after project sanction, Nalcor exploited this trust by frequently concealing information about the project’s costs, schedule and risks. Nalcor presented the project to government and the public as the lowest-cost option for supplying electricity to the island, but the alternatives to it were not fully explored and some were discarded for unjustified reasons. 

“The assumptions on which the project’s economics were based and promoted were not sufficiently tested, and a comprehensive examination of the range of possible outcomes was not undertaken. The cost estimate for the project was knowingly understated in several ways, resulting in a budget that proved to be inadequate as soon as bids for major contracts were received. 

“Nalcor knew, or should have known, that the project budget would be inadequate even before that point, however, and knowingly understated the cost estimates at the time of sanction in December 2012. Nalcor’s DG3 estimate was clearly influenced by optimism bias, strategic misrepresentation and political bias.”

More coverage to come.

The Muskrat Falls hydroelectric project ballooned in budget from $6.9 billion to more than $12.7 billion since it was initially sanctioned towards the end of 2012. It is nearly finished and now represents approximately 30 per cent of the province's debt.

While Premier Dwight Ball had referenced referring the report to police, the Royal Newfoundland Constabulary said Tuesday afternoon that while it is aware of the release of  LeBlanc's report pertaining to Muskrat Falls, it has not yet received this document for review.


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