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Nalcor receives call after SNC-Lavalin CEO steps down

Companies say Lower Churchill work well managed, remains on track

When the CEO of Lower Churchill contractor SNC-Lavalin stepped down this week, a call went out from the company to Nalcor Energy CEO Ed Martin.

"Nalcor is an important client and it is vital that they know what is going on within the company and are assured that their needs continue to be well met," Leslie Quinton, SNC-Lavalin's vice-president for global corporate communication told The Telegram Thursday.

On Monday, it was revealed now former SNC-Lavalin CEO Pierre Duhaime had resigned after an internal investigation found he had signed off on payments to undisclosed agents, breaching the company's code of ethics.

The report also failed to determine how US$56 million in outside payments, assigned to construction projects, were used. The RCMP is now investigating.

Locally, SNC-Lavalin accepted the contract to deliver engineering, procurement and construction management (EPCM) services for the first phase of the Nalcor-led $6.2-billion Lower Churchill project in Newfoundland and Labrador on March 24, 2011.

On Feb. 14, 2012, as questions were being raised about the company's activities in Libya, Martin was asked about Nalcor's comfort level when it comes to working with SNC-Lavalin.

He pointed to communications with, and assurances from, the now former CEO as one of the reasons why he felt the partnership was still a good idea.

"They're a very well-known Canadian company, very well known internationally and, you know, with my own experience internationally, working outside the country, their reputation is excellent. It remains excellent," he told reporters outside the Public Utilities Board hearing room in St. John's. "And I know from talking personally to the president and CEO of SNC-Lavalin I don't want to speak for them but I know they take this thing very, very, very seriously and they're working internally to ensure that they understand the situation and are addressing it if it needs to be addressed."

Asked about Duhaime's resignation this week, Martin said he had taken notice.

"When it happened I was surprised, when the CEO left. That being said, I received a call almost immediately from their senior vice-president from their power division.

"So he was the most senior individual in the company at that point, and he explained the situation. And I gain comfort from the way the structure with the company had still been retained," he said.

"The board of directors at SNC-Lavalin made a very definitive, firm, immediate step when they felt there might have been an issue - which I took a lot of comfort in. They have several divisions in the company. Our relationship with SNC-Lavalin is with their power division. This event or these events that are being discussed occurred in other divisions elsewhere and in other parts of the world."

The internal report from SNC-Lavalin's check of its operations specified that projects wherein accounting practices were in question were found within the company's construction division.

Martin said the SNC-Lavalin team works with the Nalcor "owner team" on Lower Churchill work. The Nalcor team "closely monitors and stays involved with anything that's happening," he said.

"So I'm still comfortable, but obviously staying in touch with the situation, and I expect to talk to their new president in the next couple of weeks and ensure things are still where they should be."

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