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MUSKRAT FALLS INQUIRY: Nalcor CFO didn’t push for disclosure

Nalcor Energy chief financial officer (CFO) Derrick Sturge at the Muskrat Falls Inquiry on Wednesday.
Nalcor Energy chief financial officer (CFO) Derrick Sturge at the Muskrat Falls Inquiry in October 2018. - Joe Gibbons file photo/The Telegram

Updates were CEO’s decision, Derrick Sturge repeats during testimony

ST. JOHN'S, N.L. —

Even now, Nalcor Energy chief financial officer (CFO) Derrick Sturge can’t say when the public would have first learned the original, $6.2-billion capital cost for the Muskrat Falls project was out the window.

“It wouldn’t have been my decision,” he said about going public with the new, $6.5-billion capital cost known at financial close, at the end of November 2013.

He said he couldn’t speak about what then-CEO Ed Martin might have communicated.

“It would have been Ed’s choice,” he said.

In response to questions, Sturge said he never had any conversation with Martin nudging for the public to be updated.

In transmitting information to government staff in the spring of 2014, Sturge made a point to note the $6.5-billion figure included for cost wasn’t public. He said they would have understood this meant it was not to be released.

Sturge said the number was also redacted from the report of the independent engineer when that report was finally given to the public, after months of requests. He couldn’t say who decided on the redactions, expecting the government played a role.

Ed Martin.
Ed Martin.

A news release issued by Nalcor Energy in April 2014, to give notice the independent engineer’s report was finally available, never included a dollar figure for the total project cost.

There was a roughly hour-long briefing at Hydro Place in St. John’s, before a copy of the redacted independent engineer’s report was provided to reporters. The briefing was drawn out by question after question, after Martin said he would not provide any updated cost information until later that year.

Despite having signed documents dating back to November, committing to a capital cost of at least $6.5 billion — $300 million more than the budget known to the public — he repeated the original estimate.

“On the $6.2 billion, we are feeling some cost pressure. And I can't go into too much detail on that, because I want to get past, as I mentioned, finalizing the various cost parameters,” he said at one point.

Hammered with questions, he took another half-step.

“There will be an increase on the $6.2 (billion),” he said, giving little else before the event wrapped up.

At his side was project lead Gilbert Bennett. Both Martin and Bennett are set to testify in June (with the schedule subject to change).

At the end of June 2014, the public update came, with increase above and beyond the $6.2-billion capital cost at sanctioning in 2012, above the $6.5-billion estimate from November 2013. The estimated cost had reached $6.99 billion.

But what about the board of directors? What did they know in 2014 about the project’s estimated cost?

Sturge has told Muskrat Falls Inquiry Commissioner Richard LeBlanc he can’t say with any level of certainty.

After Sturge was excused, SNC-Lavalin lead estimator Paul LeMay was called to the stand. His testimony is set to continue Friday.

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