With the questioning of former Nalcor CEO Ed Martin this week, the Muskrat Falls Inquiry homed in on a particular aspect of the commission’s work from its terms of reference.
The terms specifically say the inquiry will try to determine “Whether the government was fully informed and was made aware of any risks or problems anticipated with the project, so that it had sufficient and accurate information upon which to appropriately decide to sanction the project, and whether it employed appropriate measures to oversee the project, focusing on governance arrangements and decision-making processes associated with the project.”
A straightforward enough question, though the answers are anything but.
With publicly funded megaprojects frequently running over-budget — and Muskrat Falls did that in spectacular fashion, going from $6.2 billion at sanction to $12.7 billion (factoring in interest and financing costs) now — experts advise that the corporations executing such projects have the responsibility to inform politicians and the general project of the risk.
Martin says he did just that.
“…I summarized that information and made sure they understood the risks inherent in the project, both from the tactical and strategic (risk) perspective…,” he told the inquiry on Tuesday.
“…I believe that I did share the information with the board and the shareholder (the province) and I considered my job to put that information in a manner that enabled those people to focus like a rifle shot on the key issues.”
Kathy Dunderdale, who was premier in the months leading up to the project’s sanctioning, can speak for herself when she takes the stand next week, and it will be interesting to hear her recollections about the extent to which the risks of Muskrat Falls were communicated to her and her cabinet.
In one of many confrontational exchanges with inquiry co-counsel Kate O’Brien, who suggested the strategic risk might not have been clearly communicated to the government, Martin was unwavering.
“Don’t agree. I was clear,” he said.
Kathy Dunderdale, who was premier in the months leading up to the project’s sanctioning, can speak for herself when she takes the stand next week, and it will be interesting to hear her recollections about the extent to which the risks of Muskrat Falls were communicated to her and her cabinet.
And that leads to some of the questions inquiry Commissioner Justice Richard LeBlanc will have to consider in determining how the populace wound up saddled with such punishing debt.
When Martin says he was sure the government understood the risks, was a dollar amount attached? Was the government told to be prepared, say, to have to cover half a billion dollars or so in cost overruns?
If so, did the government agree, but only to a certain maximum limit? And was that ever conveyed to the public? If the government of the day truly understood the risk, did it decide not to convey that information to the media and the public?
Did the government understand that the risk could potentially end up costing it billions more in debt — debt that it had arranged to pass straight on to ratepayers?
It will be up to LeBlanc to cut through all the bluster, bombast and bafflement and get straight to the truth.
