Damning is not the word.
The public inquiry report into the Muskrat Falls project was beyond what even the most jaded observers might have expected.
Let’s leave most of this in inquiry Commissioner Richard LeBlanc’s own words.
Read them slowly, and let them sink in.
“Although it had publicly professed that a business case for the project would have to be established, in effect the government of Newfoundland and Labrador (GNL) had predetermined that the project would proceed. In so acting, GNL failed in its duty to ensure that the best interests of the province’s residents were safeguarded.
“Although GNL and Nalcor were united in their shared goal to proceed with the project, GNL had no capacity or strong inclination to effectively oversee Nalcor. 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. …”
"The high level of trust and reliance that the Nalcor board placed on Nalcor’s executive, and particularly Edmund Martin, was a mistake." — Muskrat Falls Inquiry report
“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 (referred to as ‘Decision Gate 3’ or ‘DG3’) in December 2012. Nalcor’s DG3 estimate was clearly influenced by optimism bias, strategic misrepresentation and political bias.”
The report does not fail to single out names, chief among them, former Nalcor Energy CEO Ed Martin.
“It is clear that Edmund Martin had a duty to fully, frankly and accurately disclose to the board all relevant information on cost estimates, schedule, risk and contingencies before the board of directors considered the project’s sanction, and also thereafter. Edmund Martin failed to discharge this duty. The high level of trust and reliance that the Nalcor board placed on Nalcor’s executive, and particularly Edmund Martin, was a mistake.
“Nalcor officials knew that the GNL officials and politicians who worked on the project were considerably over their heads and unqualified to evaluate cost, schedule and risk. Nalcor officials took full advantage of this serious and glaring weakness when they should have recognized that this imposed on them an even greater duty to ensure that GNL was fully informed and understood the cost, schedule and risk. …
“There is also no doubt that GNL politicians and officials must be faulted for failing to provide a reasonable level of oversight of Nalcor, for placing an unjustified amount of trust and blind faith in that corporation and for the naivety that they demonstrated in accepting, without a comprehensive independent review, Nalcor’s DG3 cost estimate and schedule.”
What a total and unmitigated disaster.
