26 August 2009

Great Gambols with Public Money: Sprung Cukes 4

Cuke caper: Greenhouse fiasco rocks Newfoundland

The Ottawa Citizen, Sunday January 15, 1989

by: Michael Harris

Brian Peckford is Canada's first lame-cuke premier.

Peckford's Newfoundland government invested more than $18 million of  public  money into a futuristic cucumber operation. Three weeks ago, he announced that the province's adventure in high-tech farming had been laid low. The entire crop in its gigantic hydroponic greenhouse complex had mysteriously died.

Hydroponics is a process that grows plants without soil. The eight-acre complex into which Peckford poured Newfoundlanders' money was supposed to give them cheap, fresh vegetables year-round and create jobs and a profitable export market. So far, the province has got much bigger bills than it counted on, thousands of malnourished and deformed cucumbers, the prospect of an agricultural white elephant and loads of embarrassment.

The premier hinted darkly at foul play when he announced the crop failure. Hours later, the province's partner in the venture, Calgary businessman Philip Sprung, called in the RCMP. Claiming his project had been sabotaged, Sprung released a wild west-style Wanted Poster. He offered a $10,000 reward for the ''capture'' of a shadowy figure who was quickly dubbed ''The Cucumber Killer.''

Sprung brought in Richard Bonanno, an American horticultural academic who concluded in less than a day that sabotage was the likely cause of the crop failure. According to Bonanno, an associate professor at North Carolina State University who specializes in weeds, a triazine commonly known as Velpar was the culprit that triggered the total shutdown of the giant greenhouse complex.

''Dick Banana'' quickly became the darling of talk show callers as the Sprung controversy boiled over. Bonanno's speedy assessment was at first challenged and then dismissed by other experts. Scientists from Memorial University in St. John's said Velpar didn't have the ability to bring about the massive zinc shortages they found in leaf samples taken from cucumber plants in the Sprung greenhouse.

Last week, National Research Council scientists in Halifax flatly eliminated triazines such as Velpar as the cause of the massive crop failure. In ruling out Velpar, Roger Foxall, director of the NRC's Atlantic Laboratory, said that scientists may never know what caused the cucumbers to die on the vine.

Less than a week after the massive crop failure, Peckford gave the floundering project another $1,335,000 to tide Sprung over until a new crop could be planted. The money was immediately spent to cover Sprung's operating costs, leaving the province with the unpleasant prospect of forking over at least $2 million more to the greenhouse before the end of January. Faces around the premier's cabinet were turning as red as Sprung's bottom line.

Informed sources told the press that provincial finance minister Neil Windsor and others had argued in cabinet to close the project. Last Monday minister of agriculture Charlie Power, the man who for the last year has been line minister responsible for the high-tech greenhouse, resigned after 10 years in cabinet.

Power said he lacked ministerial authority to deal with the ''financial fiasco'' of the project. He said he had been treated like ''a Soviet spy'' by Philip Sprung whenever he tried to get information from the government's partner about what was going on at the greenhouse. Power said that the last straw for him was that even though nothing was growing at the greenhouse, the lights had been left on to melt snow off the roof.

''The average daily light bill for December was over $7,000,'' Power said. ''That is a rather expensive way to melt snow.''

When asked if he thought Sprung's sabotage theory was a red herring, the ex-minister offered a barnyard metaphor: ''There is a better description for it. It comes out of a certain end of an agricultural animal.''

Power's criticisms also touched the premier.

''For me to make statements to the press and then realize that the premier's office is fully aware of an entirely different set of circumstances has been both embarrassing and frustrating.''

He added: ''When I look back over the process, I really wonder how a government which recognized our history of Newfoundland getting taken by people from the outside... how we could have got ourselves into it.''

Power complained that he never once presented a cabinet paper on Sprung, that he was misinformed about the financial requirements of the project by the premier's office and that Finance Minister Windsor signed all the loan guarantees on behalf of the province.

''To be briefed after the fact is not, at least in my estimation, the way that the cabinet process or a minister's responsibilities should be done,'' he told reporters after his resignation.

Peckford called Power's resignation ''discourteous and painful.'' He accused his long-time cabinet minister of angling for the leadership of the PC party  - Peckford's job, but hotly rumored to soon be up for grabs. But Peckford has vowed that he intends to lead the party into the next election, so his accusation against Power was puzzling. [Peckford resigned in early 1989, shortly after this article appeared. ]

Power's resignation and the shut-down of the cucumber facility are the most dramatic setbacks in a continuing saga of woe. The Sprung project has been controversial since it was unveiled in May 1987.

Peckford announced that the province was going to be equal partners with Sprung in an $18.4-million hydroponic complex to be built on 25 acres owned by the province. Anxious to make Newfoundland the cucumber capital of North America, Peckford put the public's money where his mouth was and purchased Sprung's used hydroponic structure.

The province threw in a $1-million piece of land, a $7-million loan guarantee, $900,000 in sales tax exemptions and $2.5 million in cash up front. And if the project failed, the government would pick up the tab, while Sprung could walk away for $1.

Peckford said Sprung's revolutionary system would be a money-maker within a year. It was to catapult Newfoundland to the forefront of hydroponics. It was also supposed to provide year-round fresh vegetables at low prices to Newfoundlanders, long used to a limited selection of high-priced imports most of the year.

When the project ran into a seemingly endless string of troubles, the government coughed up $6 million more. Sprung continued to contribute his expertise rather than his money. So far, not a penny of the government's investment in Sprung has been spent with the approval of the legislature. (Total costs for the greenhouse have since ballooned to $25 million, $18 million of which has been picked up by the government.)

Philip Sprung had claimed from the start that he could grow seven million pounds of produce a year at the greenhouse while creating 150 full-time jobs. Other growers scoffed at his claims. Critics called the project ''Grow By Chance,'' a not-so-comic reference to Newfoundland's biggest bankruptcy - the Come By Chance oil refinery.  [Actually Canada’s biggest – ed.]

Oblivious to his critics, Sprung just kept on making claims for his hydroponic system.

''There really isn't anything we can't grow, from marijuana and hashish,'' he once joked to reporters. ''Actually we've never tried, but I'm sure we could do it.''

Sprung was less anxious to talk about the $18-million loss he ran up with the same hydroponic facility in Calgary, where he never produced the quantity of vegetables he claimed he could. When his plants began to die after nearly a year of operation in Calgary, Sprung cited gas emissions from the site of a defunct oil refinery as the cause and sued Imperial Oil and the city for $50 million.

Not long after Peckford's bubbly announcement, the troubles that dogged Sprung in Alberta began to show up in Newfoundland. Five days after the deal with the province was signed, Sprung had a dispute with the project's chief technical director of hydroponics, British Girocrop Ltd.

Girocrop's managing director, Michael Anselm, was replaced by Phil Sprung's daughter, Dawn.

Anselm said one reason he left was that Phil Sprung was more interested in selling hydroponic greenhouses than in the commercial production of vegetables. Dawn Sprung responded that Girocrop's technology had become ''antiquated.'' The irony was withering.

On the day the project was announced, Peckford described the same technology as being on ''the leading edge of a new and highly innovative technology.''

Vexed by questions about the failure of the project in Calgary, Peckford blew up at reporters during a 1987 press conference. He urged them to check out the facts about hydroponics before they criticized the greenhouse. He directed the media to a variety of sources he said would confirm his contention that Sprung's technology was proven and viable and that his deal was a good one.

But a canvass of the premier's sources cast further doubt on the controversial project. John Wiebe of the Alberta Department of Agriculture's Plant Industries Division, told the St. John's Sunday Express that he simply didn't believe Sprung's yield-claims were achievable and that they had never been independently verified.

''It's possible that Mr. Sprung is trying to sell units, not grow crops. There's a lot of hype attached to that operation... I ask people who are potential investors to personally and directly audit the yields. Don't take his word.''

Wiebe's reservations were echoed by Mirza Mohyduddin, a specialist in greenhouse crops with the Alberta government's Tree Nursery and Horticultural Centre.

''Genes are involved. Plants have a genetic limit and you cannot push a plant beyond its genetic limit,'' he said, pointing out that Sprung's yield claims in sunlight-starved Newfoundland were two times greater than growing results in Saudia Arabia, where there is 12 hours of sunlight year-round.

When questioned about the reservations of nearly two dozen scientists, government representatives, growers and marketing people, Peckford insisted that the province had documented proof that Sprung's yield claims were achievable and that markets were in place to make the project economically viable. The premier promised to make the studies public once the legal agreement between the government of Newfoundland and Sprung was executed. He later changed his mind, telling reporters that the information would give other cucumber producers a competitive advantage.

In fact, the only government study of the Sprung operation was carried out by a team of Newfoundland public servants, which visited the Calgary operation in January 1987.

The officials reported to government that Sprung could achieve a top yield of 2.7 million pounds of produce a year, less than half of what he was claiming. They expressed doubt that the marketplace would be willing to pay the $1.08 a pound that Sprung expected to get. The Sunday Express's [sic] freedom of information request for the report was denied, but the paper later published a leaked copy.

Faced with mounting criticism, Peckford put a news blackout on the greenhouse project in May 1988.

''We decided that we will make no further comment on day-to-day operational and marketing decisions of the greenhouse.''

But the bad news kept coming. Although Newfoundlanders had been promised cheaper vegetables from Sprung, it was revealed in June 1988 that local wholesalers were paying 75 cents for the same pound of  produce that was being sold in Boston for just 25 cents.

Public anger deepened when the greenhouse began giving truckloads of deformed and unmarketable cucumbers to local farmers as feed. The government arranged to have Prince Edward visit the greenhouse last June, hoping for some good publicity. Sprung billed the government $10,000 for the cost of white nylon jumpsuits and sneakers for the prince and his entourage.

Then came the accusation from other growers that Sprung was the greenhouse that stole Christmas: the perpetually-lit facility was ruining their poinsettias. The traditional Christmas flowers need a certain amount of darkness to develop their distinctive red coloring.

The Sprung complex's bright lights not only affected plant growth in neighboring areas, residents complained they could play cards or read in their yards at midnight.

Faced with a call from the political opposition for a judicial inquiry into the Sprung fiasco and demands for even more funding from the troubled facility on the short term, Peckford's 10-year-hold on Newfoundland politics has come down to a single decision: should he pour more public money into Sprung or close it and take the heat for a mega-blunder.

It's a problem that won't go away.

This is a white elephant that glows.