01 December 2006

Lower Churchill not really any closer

While the Lower Churchill project has been registered for environmental assessment with both the federal and provincial governments, the project isn't really any closer to starting than it was six months ago.

That's when Premier Danny Williams tossed aside every proposal submitted in the province's expressions of interest process and embarked on an approach which, by his own admission, had not been assessed on any level at all. There was no business plan, that most basic of business planning tools.

The environmental assessment documents are drawn largely from work completed since 1998 under former premiers Brian Tobin and Roger Grimes.

Contrary to Premier Williams' claim today, it appears that he is actually farther from developing the Lower Churchill the province was in 1991 or at any time since.

Biggest, most important issues still unaddressed

Six months after Williams embarked on his go-it-alone approach, all the major elements - market, land claims agreements and financing - aren't even close to settled.
A key point, with political implications, is securing a loan guarantee from the federal government that could run between $6 billion and $9 billion.

Williams is confident that Prime Minister Stephen Harper will come through with such a guarantee.

"I have a commitment in writing from the prime minister, for what it's worth," said Williams, referring to a letter Harper wrote Jan. 4, during the federal election campaign.
What Williams didn't say apparently is what that commitment is. In fact, the Premier has consistently misrepresented Harper's written comments at every opportunity. During the election - while Williams pretended to support Harper - he claimed that there was a commitment to a loan guarantee. At the recent provincial Tory convention in Gander - when Williams admitted he secretly distrusted Harper even as he campaigned for him publicly - Williams continued to claim there was a loan guarantee commitment.

Harper's actual comment was substantially different. All committed to do was discuss the issue further.
A Conservative government would welcome discussions on this initiative and would hope that the potential exists for it to proceed in the spirit of past successes such as the Hibernia project.
Feds would accept ownership stake

Rather than loan guarantees, the Harper administration would be interested in an ownership stake in the Lower Churchill. Putting Ottawa in a position to take a share of revenues from the project would fly in the face of Williams go-it-alone posturing. Then again, if the province was actually able to go-it-alone, Williams wouldn't need the federal government to help finance the project.

However, Williams will need outside financial backing to build the Lower Churchill. According to the Halifax Chronicle-Herald, Williams tried to raise capital on Wall Street before the go-it-alone announcement but was rejected by financiers.

Williams not welcome in Ottawa

The more significant problem the premier faces in seeking financial help from Ottawa is his abysmal relationship with the prime minister's office. The dust-up in Gander between the president of the federal Conservative Party and the premier's brother is typical of the ongoing scrap. Williams' attack on Bernard Lord is symptomatic of the animosity bordering on full-blown contempt that flows freely between the Langevin Block and the Premier's Office.

The Canadian Press story refers to energy experts as being somewhat more cautious than the Premier in his enthusiasm. CP refers to transmission grid issues. Additionally, though, Newfoundland and Labrador Hydro is behind the curve in finding markets for the power as a direct result of the go-it-alone snap decision. Progress has also been slow on an impacts and benefits agreement with aboriginal peoples.