04 December 2014

Muskrat Falls more than $8.3 billion: Nalcor #nlpoli

Prompted by Wednesday’s post on Muskrat Falls costs,  a couple of readers drew your humble e-scribbler’s attention to a tidy little briefing note posted on the Nalcor website. 

It’s not really obvious – some might say it is buried - but if you going looking you can find it and a lot of other useful information.  That’s a shame, really because this little two-pager was far more informative than anything that’s actually come out of the mouths of the Nalcor brass or provincial cabinet ministers.

As it turns out, Ross Wiseman did a bit more than bugger up his fractions.  And your humble e-scribbler was off by a bit in trying to unravel Ross’ version of things, too.

Follow that link and you will find a document called “Development cost – sources and uses of funds summary”.  Note that it dates from April 2014.  The table below is taken from that two page document.  The figures at that time still showed project costs of $6.2 billion, which was, after all, a figure from 2012.  Notice, though, that the total cost was $7.4 billion.

april 2014

The SRBP correspondents had an updated version of the document from Nalcor.  This one is from November 2014.

november 2014

There’s an increase in the thing called facilities costs and there’s also an increase in equity.  The total is $8.3 billion, which is the number SRBP gave you last summer (allowing for rounding) when Nalcor updated the facilities costs.  Wednesday’s post didn’t add the cost of interest and other financing to the cost estimate based on loan guarantee figures.

Note that the equity is even more than the figure Ross Wiseman mentioned publicly on Monday and the figure SRBP calculated based on the federal loan guarantee.  $2.88 billion works out to be roughly 35% equity.  Wiseman said it was 25%.  Maybe he just misspoke.

Or maybe the project costs will go up again.  After all,  that equity bit is the only bit that can absorbed further increases in costs and it has already jumped by almost $1.0 billion (about 51.5%) in about six months.