Touted in 2004/05 at under $4 billion, Premier Danny Williams referred to the Lower Churchill in the House of Assembly on Monday as a “a $6 billion to $12 billion project.”
Williams insisted though in other comments in the legislature that from “a perspective of the cost, I can tell you that this particular project is the lowest cost, the cheapest hydro-electric project in all of North America.”
In another response he repeated the claim:
Mr. Speaker, I just said it before and I will say it again. This is the lowest cost hydro-electric project in all of North America. That is equivalent to – could deal head on with La Romaine or any other projects that come on stream from Quebec.
That’s an odd statement since Hydro-Quebec’s La Romaine project, announced is 2009, is estimated to cost $6.5 billion. The Lower Churchill has not yet been sanctioned and the provincial government’s energy company is still picking its way through cost estimates and route analyses.
The original expressions of interest package for the Lower Churchill - released by the provincial government in 2005 - is no longer available online from either the provincial government or its energy company but the government’s estimated cost - $3.3 billion - is contained in a report compiled by TD Economics at the time.
The provincial government cancelled the expressions of interest process in 2006, preferring to “go-it-alone”. With the cancellation of the EOI process, the provincial government effectively rejected a joint proposal from Hydro-Quebec and Ontario Hydro to develop the project in co-operation with the province. That proposal included upgrades to transmission capability to Ontario which would have been borne by the Ontario and Quebec partners.
Once Williams rejected the proposal Hydro-Quebec turned to Plan B. That involved development of about 4,000 megawatts of wind energy within Quebec and another 4,000 megawatts of hydro power from new projects all within Quebec.
The go-it-alone option also didn’t turn out that way even after Williams rejected the proposal. As natural resources minister Kathy Dunderdale revealed last September, Danny Williams and others spent five years in secret talks trying to lure Hydro-Quebec into a deal on the Lower Churchill. In the process Williams abandoned his previous commitment that he wouldn’t cut a deal with Hydro-Quebec on the Lower Churchill unless it involved redress for the 1969 deal that led to the development of Churchill Falls.
-srbp-
4 comments:
Looks similar to figures given by a Liberal government 12 years ago:
http://www.budget.gov.nl.ca/budget98/economy/churchill_river_power_projects.htm
Hey, lookee who's back.
Any day now Steve Marshall will start in again confirming that things are tense in Tory Town.
The numbers aren't similar because the projects are different.
If you notice, that figure in 1998 included expansion at Churchill Falls and didn't call for development of Muskrat Falls.
So telling us that the thing could cost $12 billion today is still a fairly significant cost escalation, especially given the initial estimate of $3.3 billion.
Did you discount the cost of upgrading the Upper Churchill in the Liberal figures? They 1998 Liberal figures add up this way:
Gull Island $3.2 billion
Transmission $3 Billion
Infeed to Island: $2.2 Billion
Muskrat Falls (bottom of page): $2.1 Billion
Total: $10.5 Billion
Go back and read it again.
Muskrat Falls was only up for a study. There was no commitment to building it. The $2.1 was an estimate at that point.
But let's compare things, anyway since those are really the only figures out there that might be close to accurate.
Danny in 2005: $3.3 billion for two dams and the transmission infrastructure out to Quebec and down to Soldier's Pond.
Sounds kinda suspicious now, when you look at it, doesn't it?
And if the cost of the project in 1998 was going to be $10 billion, then that means the current crowd really bullshitted in 2005, grossly low-balled when they talked about $6.0 billion and are likely now really pulling everyone's leg when they refer to $12 billion.
In another sense, you can wonder why it is then, that they are fighting about transmission through Quebec. They have an estimate which matches their own, they've committed to build it and pay for it, so they should just get on with it.
The problem is there is no Lower Churchill now any more than there was one in 1998.
No markets = no money = no project.
That's the brutal reality.
BTW, thanks for bringing up the best analogy for the current LC obsession. It's what I said in 2006 or so: the whole thing is purely there for political theatre. It doesn't really exist because if it did exist they'd be building, not talking.
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