23 July 2012

More Muskrat Falls Sunk Cost #nlpoli

That $350 million in sunk costs from Monday morning’s post wasn’t the whole story, of course. 

You’ll find more detail – and lots more cash – documented in the public utilities board’s final report on Muskrat Falls.

In addition to the $350 million spent up to the end of March 2011, Nalcor reported that it spent $82.8 million between Decision Gate 2 (16 November 2010) to 31 December 2011. Obviously there’s a bit of overlap between the amounts on the information sheet and this $82 million.  You’d be safe to put the expenditure to the end of 2011 at $400  million. Odds are that Nalcor spent more than that.

The company forecasted for the PUB that it will spend  $12 million to $15 million per month from January 2012 to Decision Gate 3. As of July 1 2012 that would mean they’ve spent between $72 and $90 million more.  They won’t go through Decision Gate 3 for at least another three or four months. 

All those forecast amounts would not include whatever studies natural resources minister Jerome Kennedy announced after the PUB released its report.

Nalcor also reported to the PUB that the total value of all contracts and work packages prepared since Decision Gate 2 (16 Nov 12) to the end of March 2012 was in excess of $900 million.

So what is that? 

Looks like the better part of $1.5 billion already spent on a project that – according to some political accounts – still has not been “sanctioned”.