Nalcor engineer – who claims that low-balled estimates were used to obtain sanction for the Muskrat Falls project – has, again, shed light on a Crown Corporation that, sometime after 2009, went rogue.
well-known, but Nalcor’s response – specifically Anthony Germain’s interview – finds a retirement-minded CEO indicating casual indifference to what can only be described as the most serious accusations ever leveled at the government since Confederation.
the words “absurdly low” to describe the estimates. In my Blog Post of February 2017, the same engineer used the word “falsification”.
estimates as “unrealistic”.
“unrealistic” – any difference is fundamentally meaningless.
in Bung Hole Tickle. Estimating a multi-billion dollar project is complex work.
It also goes through multiple layers of review – each time by a group more
Undoubtedly project costs have risen,
in part, because the Nalcor management group were given a mandate far beyond their
capacity to deliver.
deception over several years – including to influence the 2015 general election
– are issues not of stupidity but of something far more odious.
Anthony Germain, and to reporter Rob Antle, that they pursued the story. That it – and they – survived a likely lengthy process of rectal analysis by
CBC lawyers should be duly noted. Such a carefully researched and critical
story – confirming one of the underlying causes of Muskrat’s failure is long overdue for the NL media – including CBC.
That said, let’s examine Stan’s Marshall’s
response, as CEO. He says some pretty strange stuff – some of which ought to have a certain
few taking offense.
Marshall has let all the senior management at Nalcor off the hook for any
participation in creating the “unrealistic” project estimates.
that’s for others to talk about and decide and debate for many years to
come.” He adds: “If they want
to do (a forensic audit) …by all means go ahead”. The only thing missing is the ha, ha, ha.
Germain must have wanted to send Stan a bubba rocking
chair and a pair of slippers – the cavalier response more fitting to one in cognitive retirement.
monumental scale – is not some philosophical issue reserved for morning banter.
The attitude, notwithstanding the fact that he heads a Corporation under a substantial cloud of
mistrust, ought to warrant the most ardent concern that no senior executive or member of the project team – or any other employee – has duped either the politicians or
level of Vice President on down. His rationale is that no one at Nalcor knew what they were doing.
along….And they paid for their education” said Marshall – a most
peculiar statement because they have not paid any price; Marshall having
secured their jobs and their high six figure incomes.
from culpability for the lost project schedule, the Astaldi affair, contracts
changed from “fixed price” to “unit price” to “hybrid”, contracts poorly written giving contractors a field-day for extra billing, a terrible health and safety record, a plethora of quality control issues,
the popped transmission cable, the leaky cofferdam, and a litany of management
screw-ups – the list go on and on.
reason. He ignores the process history of the estimates and is blind to the
roles played by several senior Nalcor employees within the command structure of
Nalcor and of a megaproject.
had a full team of estimators occupying offices on Torbay Road, in St. John’s.
Muskrat Falls wasn’t their first job. They were experts, not in pouring
concrete, but in the in the field of construction estimation.
that the specific remote sub-arctic conditions of Labrador demanded a far
different set of assumptions than one made for a project, say, in Belize. They
understood all the local issues – from labour unit costs, poor labour productivity in a cold environment,
remote transportation challenges, labour scarcity, union benefits, housing costs, and hundreds of others.
once suggested SNC Lavalin might be sued for faulty estimation. Why?
Likely because Nalcor
interfered continuously in the preparation of those estimates.
of estimators – some compliant perhaps, but not nearly as inexperienced or
incompetent as Stan Marshall would have us believe. Their job was to calculate the
costs that were not within SNC’s scope of work and to arrive at a complete project estimate.
make available to a forensic auditor a quite substantial paper trail – quite
possibly giving depth to one estimator’s prediction: “they are going to lose
their shirts on this project”.
Don’t forget. This is a small town. People talk.
senior engineer said back in February of this year, in a piece entitled “Muskrat: Allegations of Phony Cost Estimates“. This is an excerpt:
problem of the budget dated back to 2012 when Nalcor learned that the cost
estimates — prepared by SNC — were not compatible with the “Scope” of the
project. Said the engineer: “we were satisfied on three levels:
was a major gap in the project scope vs. the estimates. Nalcor simply took a
policy decision to understate the project costs.”
the project was also inadequate.
from the moment project construction implementation began, the crown
corporation was forced into “creative accounting on a massive scale”.
It should concern every public institution – including the RCMP, and any CEO – including Stan Marshall.
Again, when has
the integrity of government ever been so seriously called into question?
team has been up to, but without a forensic audit he can’t get rid of the stench
that hangs over the whole Corporation.
There evidently was a “policy decision”
to understate the project costs. But that is too large a job to be undertaken without
collusion by at least some senior Nalcor staff.
interview that others must have parsed, as did I.
failure in leadership, and Muskrat Falls should never have been built.”
ultimate decisions before my time,” the CBC quoted him.
predecessor, whether they came from the Confederation Building, I have no
Of course, Nalcor was a power unto itself. Even Department of Finance bureaucrats didn’t talk to them.
Marshall, wittingly or otherwise, does not leave open a very
wide field of possible culprits, does he?
Perhaps, Nalcor, and the politicians, hope that the issue will be whitewashed by the Auditor-General – his Office possessing none of the requisite professional skills to conduct the kind of forensic audit the allegations require.
They expect it to be panned by mainstream media – in the way of the Telegram editor – and the others who ignored both the Uncle Gnarley and CBC stories. And why wouldn’t they?
They also have the full expectation that any such demand will be quickly forgotten by a compliant Premier – he already having allowed silence to substitute for the promised Humber Valley Paving Inquiry.
haughty regard for matters unethical – and possibly illegal – I would not be
too quick to absolve the others on his list.
engineer say back in January?
estimates were completely unsustainable.
As enjoyable as Stan Marshall’s banter actually is – perhaps, Germain will put the whole interview on You Tube – it would be great if he started acting more like a CEO than a caretaker.
It is also time the Premier started acting – like a Premier.