It’s a lot
to expect from a Premier still trying to make his first decision. 

But Nalcor
CEO Ed Martin, having failed to do the honourable thing at last Thursday’s
Nalcor AGM, will have to be pushed. Still, it is increasingly clear it won’t be
Ball who will do the pushing.

One of the few
items of substance that came out of the AGM was confirmation that Muskrat will
be delayed and the cost will climb even higher, though I am unsure who is left
to claim surprise.

also said we won’t get a cost and schedule update until the end of June,
leaving us to wonder if he will tell the Premier the E&Y March 31 deadline will
also have to be extended.

attendee at the AGM commented: “the new government has not taken a feather
out of Ed Martin’s smooth-as-silk insouciance. He has risen above petty
concerns about budgets and schedules to extol the longevity of hydroelectric
projects, such as the Hoover Dam, while sacrificing the government’s commitment
to open the books on the altar of “commercial sensitivity”.

There were few
other disclosures, but the Nalcor CEO took time to invoke blame at the AGM; something
he excluded from those self-imposed “commercially sensitivity” latitudes.

Gil Bennett,
Nalcor’s Mr. Pop Up, did not appear with any new claim of “float time” in Astaldi’s
schedule, as he did when this Blogger accused Nalcor of “poor planning”; the Italian contractor having tore down an unfinished $120 million “dome”. 

over every bit of wastage on a job site is not the proper way to move ahead
with a project as large in scope as Muskrat Falls”, CBC quoted the Nalcor V-P,
a year ago, counselling as much as chastising, that milestones were more important
than processes.

Back then,
the “experts at Nalcor” were a pretty cocky bunch; even a $120 million
temporary steel/concrete structure was elevated to the status of a “bit of

Defeat now greets both milestones and processes; boast
has turned to blame.

At the AGM,
the Nalcor CEO could be heard invoking the name Astaldi, but in less glowing
terms. “We do have an issue with the powerhouse that Astaldi is
constructing,” Martin said. “They have fallen behind significantly”. That
lag will have “schedule implications,” he acknowledged, “and
with schedule implications, there will be some cost implications”, the CBC

Astaldi seems
unbowed; a fact to which more space will be given next time.

For now, in
contrast to Ed Martin’s assertion, Astaldi claims in its Full Year 2015 Annual
Report released March 9, 2016, a mere few days ago, (see excerpt below) that “today the production (at Muskrat Falls) achieved remarkable levels”

Indeed, the
Astaldi CEO told securities analysts during and following release of the 2015 Annual Report, that “today negotiations are underway which obviously
have been very positive with the client”. He added, in the Q&A Session, “we
expect that in the short term it will reach a conclusion”. The Report said
“severe weather conditions had delayed the works”.

Martin did
not tell the AGM or reporters of any “positive” negotiations with
Astaldi or that the two parties are about to revise Astaldi’s contract; though
based on the expectation, Astaldi intends to report a profit from Muskrat in 2016.

these matters are Martin’s business, alone. It is sufficient for ratepayers and
tax payers to know their tab for Muskrat is far from closed.

watchers are used to working through third parties to pry into the status of the
Muskrat Falls project. The NS UARB, for example, confirmed Nalcor shares a very different narrative with others than it shares with us. Now, the official Reports and audio tapes of Astaldi’s official
comments have a similar usefulness.

Of course, the
Astaldi CEO is obligated to comply with the transparency requirements of the Italian and London Stock Exchanges.

As Head of a
Crown Corporation, Ed Martin has few brakes; he is not even controlled
by a Government with the capacity or the political will to stop him before he breaks
us. Even the Auditor General recoils from paying him a visit.

Professor, Dr. Tom Baird, recently noted: back in June, 2014 when Ed Martin
announced Muskrat costs would reach $6.99 billion (plus IDC) the CBC reported Martin
stating “90 per cent of Nalcor’s Muskrat Falls contracts are essentially
complete. The reporter quoted him saying ‘those prices are fixed, helping
provide some cost certainty’. “I believe that we have narrowed down the
risk of additional cost increases very, very, very significantly”, Martin was quoted saying.

The figure was raised to $7.65 billion (plus IDC) in September, 2015. Now, the CEO warns again. Evidently, nothing is “fixed” at all, and the project is years away from completion.  

That this Premier would let the Nalcor CEO announce the new schedule
delay and cost increase, before firing him, is difficult to contemplate. 

It seems the election has changed nothing except for the people who owe fealty to Ed Martin.

Des Sullivan
Des Sullivan
St. John's, Newfoundland and Labrador, Canada Uncle Gnarley is hosted by Des Sullivan, of St. John's. He is a businessman engaged over three decades in real estate management and development companies and in retail. He is currently a Director of Dorset Investments Limited and Donovan Holdings Limited. During his early career he served as Executive Assistant to Premier's Frank D. Moores (1975-1979) and Brian Peckford (1979-1985). He also served as a Part-Time Board Member on the Canada-Newfoundland Labrador Offshore Petroleum Board (C-NLOPB). Uncle Gnarley appears on the masthead representing serious and unambiguous positions on NL politics and public policy. Uncle Gnarley is a fiscal conservative possessing distinctly liberal values and a non-partisan persusasion. Those values and opinions underlie this writer's views on NL's politics, economy and society. Uncle Gnarley publishes Monday mornings and more often when events warrant.


Bill left public life shortly after the signing of the Atlantic Accord and became a member of the Court of Appeal until his retirement in 2003. During his time on the court he was involved in a number of successful appeals which overturned wrongful convictions, for which he was recognized by Innocence Canada. Bill had a special place in his heart for the underdog.

Churchill Falls Explainer (Coles Notes version)

If CFLCo is required to maximize its profit, then CFLCo should sell its electricity to the highest bidder(s) on the most advantageous terms available.


This is the most important set of negotiations we have engaged in since the Atlantic Accord and Hibernia. Despite being a small jurisdiction we proved to be smart and nimble enough to negotiate good deals on both. They have stood the test of time and have resulted in billions of dollars in royalties and created an industry which represents over a quarter of our economy. Will we prove to be smart and nimble enough to do the same with the Upper Churchill?


    • I hear the Consumer Advocate is making the CDM (Conservation Demand Management) an issue at the current Rate hearings, whereas the power companies look to rubber stamp their dismal record and do nothing approach.

    • For home owners, addressing a rate doubling simply means adding a non-electric heat source to supplement or replace electric baseboard heating. Now that LED lights are common and appliances are energy efficient, we don't need much electricity anymore (other than for heat). Doubling of my bill would add $3600 a year, so justifying oil / propane or pellets would not be difficult. Renters will suffer the most since it is often a financial choice between either baseboard heat or wearing heavy clothing in the apartment.

      I predict extensive demand destruction.

    • Derrick Green – WE MOVE!!! … is how we cope. I've already advised both my children to do so as soon as they graduate MUN.

      After 50+ years of the most blatant and transparent corruption imaginable how the hell else is a new generation going to cope? Otherwise each new graduate will be working the first three days of every week to pay for the organized crime that went before them, (Muskrat Falls).

      I wonder why dear ole Danny didn't put his name (ego) on the Falls? Wouldn't it seem FAR less ironic than branding a symbol of Justice such as a Courthouse with his name and memory?

  1. Back during the PUB hearings (when the budget was 5.0 Billion and completion was in late 2016, early 2017, Ed Martin, Gilbert Bennett, and Paul Harrington argued that due to all the front end loading on the project they had good confidence in the cost estimate. At the upper end it would be +40% in accordance with recognized standards. During DG3 this was improved, due to engineering being substantially completed. I believe in December 2013 Nalcor indicated that engineering was 95% complete in their monthly reports. At DG3 the cost estimate was increased to 6.2 Billion, and the upper range of overruns would be 25%.

    In July 2014 the cost estimate was increased to 6.99 Billion. Again as Tom Baird notes there was great confidence in the cost data.

    In September 2015 the cost estimate was raised to 7.6 Billion. Confidence was slipping.

    Now 3 years into the project no one can tell us when it will be finished, and what it would cost. Ed Martin by refusing to tell us this information is by default signing his own resignation letter.

    By getting elected on the rallying call of more and better oversight, Ball can not stand by and let the public continue to be hoodwinked by Nalcor.

    Ed Martin knows these answers. The only commercial sensitivity to this is his own ability to collect his salary.

    There is absolutely no reason why Nalcor should withhold this from the people of the province.

  2. Seems we have some idea what the commercial sensitivities are as discussed by Mr. Martin. Astaldi and Nalcor are in the midst of renegotiations. Page 3 of this document, has the following statement.

    "As regards overall calculation of margins, with reference to the Muskrat Falls Hydroelectric Project in Canada, it must be noted that despite the initial operating problems, which penalised the project during the start-up phase, the Group’s operating efforts made it possible to bring production to fairly significant levels.This allowed to start talks with the Client with the aim of rescheduling the remaining works and recalculating the project value."

    Recalculating the project value? Not hard to guess what that means.