22 December 2015

Blind in one EY #nlpoli

The new Liberal administration is firmly, irrevocably committed to completing the Muskrat Falls project regardless of the final cost to the people of Newfoundland and Labrador.

We know the Liberals will build the MF project because Dwight Ball said precisely that several weeks ago. We cannot let it fail,  Ball told a CBC audience in September.

We know Ball is committed to building Muskrat Falls because he told reporters on Monday that “cancelling this project is not what this review is about.”

Ball and the Liberals have argued for some time now that the problem with Muskrat Falls was nothing more than bad management.  To prove this, Ball and natural resources minister Siobhan Coady announced on Monday that they would send an accounting firm back to do what the same firm just finished doing a few months ago.

Ernst and Young, now rebranded as EY,  will spend three months examining the construction schedule for the dam and line to the island. They will see if there are any new problems that we haven’t seen before and give a new estimate for the cost for the project.

The purpose of the review is merely to tell the government how much they will have to borrow to meet the latest of a string of cost over-runs that have plagued the project since its start.  That’s all the review will accomplish.  That is all that the government has asked it to do.  You do not even have to read the mandate very carefully to see that is roughly what Ernst and Young just finished doing in October.  There are some minor variations in wording but both looked at the project schedule and cost and any risks to that schedule.

The risks EY will consider are  limited. however, to ones related to the management of the construction itself.  This is no accident.  The Liberals are focused on the tactical execution of the project.  To be sure, there are problems at that level.  However, the most significant ones are strategic and EY will not examine them.  They will not look at the lawsuit currently working its way through the Quebec courts.  Nor will the accountants assess the potential sales of electricity into external markets,  the demand for electricity in the province itself, methylmercury,  the North Spur or any of the other strategic risks associated with Muskrat Falls.

The Liberals have set the accountants to work poring over the execution of the projection.  But even at that level,  Ball and his colleagues changed nothing.  “There is no reason not to have confidence” in Ed Martin and his team,  Ball told reporters on Monday in a phrase as awkward grammatically as it is obviously absurd.  Darknl would be cause enough to fire the lot of them and start again. Muskrat Falls is merely the best reason of all reasons to give Ed Martin and his crowd the flick.  Muskrat Falls bonds are among the poorest performing instruments issued by any province this year. Nothing Martin has ever said about the project – rationale, cost estimates, over-runs, water management,  timetable – has turned out to be true.

You cannot argue, as Ball and the Liberals have done, that the project is badly managed and yet at the same time endorse the people responsible for managing the project.  By endorsing Ed Martin, Dwight Ball has done the equivalent of Kathy Dunderdale’s claim that there was no crisis when the lights went out across the province..  He has said something that is patently ridiculous.

What Dwight Ball and the Liberals did on Monday was make it plain they have now assumed full political responsibility for Muskrat Falls.  The reasons why they have done so are irrelevant.  What is most important for taxpayers to know is that the Liberals are now as committed as the Conservatives to finish Muskrat Falls regardless of the costs.

As the costs continue to climb – as they inevitably will – then the Liberals alone will bear sole responsibility for them. Ball cannot blame anyone else for the mess. It is his. When taxpayers get the final bill for electricity,  they will  - quite rightly  - blame Dwight Ball and the Liberals who have done nothing to correct what they have acknowledged is the wrong course.

And,  as Ball has to cut public services to keep the cash flowing to Muskrat Falls,  as he almost certainly will, he can only accept the blame for himself.  If any of the strategic risks demolish the project utterly in the meantime, the responsibility will sit squarely at Ball’s feet.

The Liberals made a simple promise during the election:
A New Liberal Government will open the books on the Muskrat Falls Project and make public the details of how taxpayers’ money has been spent
Knowing how much the final bill is won't matter to taxpayers since the Liberals have done nothing meaningful to stop the costs from climbing.

There is no reason for Ball and the Liberals to put themselves in this position.

Politically, it is suicidal