26 February 2014

Nalcor running own show on Muskrat Falls #nlpoli

Nalcor Energy is running the Muskrat Falls project without any independent oversight from the provincial government.

In two interviews with the Telegram’s James McLeod  natural resources minister Derrick Dalley identified Nalcor boss Ed Martin as the government’s chief source of information on the project.  According to Dalley,  Martin passes information to the deputy minister of natural resources who passes it to Dalley.

Additionally, noted Dalley’s communications director in an e-mail sent between the two interviews, the “Departments of Finance and Natural Resources work in close collaboration with Nalcor Energy and have regular meetings and exchanges of information…”.

McLeod asked Dalley repeatedly about any use by the provincial government of its own independent sources to vet Nalcor’s work.  Dalley replied that the department didn’t have the expertise to duplicate that of Nalcor.  What’s more,  Daley asked rhetorically,  “why would we duplicate within the department [of natural resources]” the work going on at Nalcor to develop the project.

Dalley cited external contractors  - such as Manitoba Hydro - hired by Nalcor to vet work at each decision gate for the project as an example of work that “we have done” to validate Nalcor’s project management.

To anyone who has been watching, that’s not surprising. The provincial government and most provincial politicians have operated on the assumption that Nalcor is an integral part of the provincial government, not a subordinate agency. 

That fundamental conflict between the public interest and Nalcor’s corporate interest has been at the heart of Nalcor’s relationship with the provincial government from the company’s creation in 2005.  It surfaced most recently in then-Premier Kathy Dunderdale’s comments during the blackouts in January.

The absence of independent oversight McLeod uncovered ties neatly back to a story that circulated after Jerome Kennedy resigned suddenly last year.  Des Sullivan, a.k.a.  Uncle Gnarley, reported:

“1. Over the last number of months Kennedy had grown weary of Nalcor’s secrecy. He was frustrated that his own officials could not get sufficient information to confirm Nalcor’s numbers or perform their own analysis. His Department was expected to accept Nalcor’s information entirely on its face.

2. Mr. Kennedy wanted his own staff, supplemented by outside experts, to comprise an “Oversight Committee” for the purpose of conducting the Finance Department’s independent analysis of Muskrat Falls Project costs. Evidently, he was no longer prepared to defend the Muskrat Falls Project without the verification of independent scrutiny.

Dunderdale rejected Kennedy’s demands and he resigned shortly afterward, according to Sullivan.  The meetings between Nalcor officials and finance and natural resources officials noted by Dalley’s communications directors are clearly not part of any government oversight committee, independent or otherwise.  You can get that as clearly from Dalley’s interviews with McLeod as you can see that Dalley clearly had great difficulty dealing with McLeod’s questions.