summer sun is making you testy, you’ll get no shade from the Government’s Oversight
Committee on Muskrat Falls.
Committee released its first Report last Thursday, July 31st.
will say Muskrat critics can find nothing right in this project; I suggest the latter profess the hope they are wrong.
But, hope has a spiritual undertone; a large construction project is a
purely commercial undertaking, one to which hope is supplanted with
solid planning, analysis and oversight, too.
2014, following Tom Marshall’s establishment of the bureaucratic oversight committee,
I wrote a post entitled: WHY MUSKRAT OVERSIGHT COMMITTEE IS A FARCE. It noted: “… the Premier eschewed demands for
project reviews when he was both Minister of Finance and Natural Resources. He
supported Premier Dunderdale’s position on ‘oversight’ even as he watched his
colleague, Jerome Kennedy, bolt the Cabinet over the issue.”
Given Marshall’s long held refusal to acknowledge the importance of oversight, it was difficult to see how a Committee, one not independent of government, could effectively function.
reference to other issues, too, including the lack of technical competence of the bureaucrats on the
Committee; their inability to assess a complex construction project.
of ‘independence’ naturally speaks to credibility. That is not just because of the acrimonious
history of the project or of the Government’s or Nalcor’s penchant for secrecy.
comparison is sought, consider the smaller of the three project components –
the Maritime Link. The Nova Scotia
Government requires that the Public Utilities Board (UARB) review Emera’s construction
progress and examine any cost overruns; notwithstanding the fact that NL picks
up 50% of the overrun tab!
Committee offers no proof that it has been given a mandate unfettered by
Ministerial interference. Moreover, the
emptiness that characterises its first effort is strong evidence that they have
been anything but plugged in to this project, from the very beginning.
Reports that “(t)he Provincial Government has provided significant oversight
for this project since its inception”, citing MHI, the Navigant Reports and that of the Independent Engineer (IE).
pre-determined budget, project schedule and quality controls, including the competence of management.
dealing with Oversight Protocols; the Oversight Committee would be well advised
to read it again.
information provisioning and protocols for oversight and reporting”. It
states “(t)he Oversight Committee terms of reference should also be finalized”.
first Report is all about “process”, we are warned that the purpose and
operating latitude of the Oversight Committee, even now, is still not completely
E&Y also advises the Committee that it “should be supported with specialized skills” though we are not informed exactly what professional disciplines have been employed.
In short, what we seem to have is a Committee that has not figured out how it should operate.
states its mandate is to provide reliable and transparent oversight so the
public can have confidence that:
Project cost and schedule are well managed
Project is meeting the cost and schedule objectives
cost and schedule risks are being reasonably anticipated and managed
is the Report offers absolutely no
analysis of any of these issues.
E&Y to help it ask the right questions; yet, the Report deals with not a
all clear why Premier Tom Marshall called a Press Conference to declare that
the public should be “satisfied” with the Report.
appearance might have made sense, except that the Report contained nothing to
be satisfied about. Indeed, it is equally hard to be dissatisfied for precisely
the same reason, except if you thought a project already into serious cost
overruns and lacking oversight for nearly two years, ought finally to get some.
most recent Project Budget (p.14) and Milestone Schedule (pp.16-17) are included
in the Report. The Revised Budget $6.99
billion still does not contain ‘interest during construction’, now estimated at
$1.2 billion. The omission should get
the Deputy Minister of Finance, a Chartered Accountant, odd looks at the next
meeting of the Institute. Imagine a
person, at that level, unable to comply with Generally Accepted Accounting Principles!
matter of the Capital Budget, the page instructs the reader that the figures
are stated ‘In $CDN Million’. It is not. The figures are written to nine digits. Presumably, the instruction is in error, unless the
Committee has taken to using ‘Da Vinci Code’, though we have had enough of that
from Ed Martin. Frankly, such a basic error
should not be found in such a brief and incomplete Report or one from such a
of a Milestone Schedule was useful. But, the Committee did not offer a word
as to whether the Schedule is on target. It did not note the ‘fudge’ factor
involved in Nalcor’s estimate of ‘first’ power by December 2017. Nalcor gives
itself another five months, April 2018, to get the rest of the power on line.
Committee makes no effort to say whether the project is well managed…it doesn’t
say if things are going right or wrong. It
does not tell us why Nalcor continues to delay work on the North Spur stability
problem, which ought to have been the first order of business. It conducts no
review; it offers no conclusions. In short, there is not
a single analytical line in the document on which to comment.
taken together, this Report is a confirmation that the Committee is dead in its
tracks; it is a farce, a failure.
first error was having agreed to engage in a game of subterfuge. It, too, is implicated now. Their acquiescence
has afforded the Government political cover.
In time, Tom Marshall and Derrick Dalley will say… we had an Oversight
Committee but it didn’t warn us.
years of spending on Muskrat, with little to show for the money, what has the
public been given?
has created a larger falsehood.
no oversight of Muskrat Falls. Then, none
was ever intended.