NALCOR BONUSES: A FLAT-FOOTED MINISTER “RE-IMAGINED”

If the Industry, Energy and Technology Minister
had cleaned house at Nalcor immediately upon his arrival, we would have
applauded him. No applause is necessary.

The public moans, again, over Nalcor’s
narcissistic leadership; a “runaway train” unbowed and unpunished.

How many successive years has it been; repetitious
and frustratingly undeserved bonuses given to Nalcor officials? Why is government
so deaf? How is it that no institution in the province possesses the capacity
to, at least, nudge them to change? 

It seems Andrew Parsons knows not where to begin.
It is a far tougher job than the Justice Ministry, a place where rules abound, a
bevy of lawyers administer them and even make the political role routine.

Industry and Natural Resources is different. It
requires personal energy, brains, creativity, boldness and above all leadership.  The job has been vacant for a very long time.

An engaged and competent Minister would have shed
Nalcor of the cabal who run it and who are a source of untold grief and
embarrassment. Nalcor’s future would be clearer, too.  

Nalcor has circumvented the Public Sector
Transparency Act allowing senior staff to be employed as third party
contractors. Their compensation is kept secret using the authority given the
CEO (under the Energy Corporation Act) as he pleases, on matters deemed by him arbitrarily to be “commercially sensitive”.

Even Project Director Paul Harrington, is still
contracted through his own private corporate entity. The concept makes sense
when experts are hired to perform temporary work or the kind for which full
time staff lack the necessary skill-sets. But does it still make sense for
someone hired in 2005 – 15 years ago?

Harrington was unsuitable at the start, a friend
of Ed Martin’s pulled in from a middle level job on the Terra Nova FPSO. He –
and others – are still using those personal service contracts to skirt public
disclosure.

Minister Andrew Parsons

Politicians, like Andrew Parsons, throw up their
hands when someone dares to complain about Nalcor’s intransigence and abuse;
the Ball and, now, the Furey Administration – no different than the Tories – content
to let the tail wag the dog.  

Especially galling is that the bonuses are given
to some, including V-P Gilbert Bennett and Paul Harrington, who helped engineer
and execute deception on a massive scale over several years, leading to the
sanction of the Muskrat Falls Project.

The deceit included interference in the MHI
Report. The outcome caused the Commissioner to opine that the Report “was
inadequate and lacked independence.”

Giving the conclusion greater specificity, LeBlanc
added: “GNL and Nalcor approached this review as a means of securing support
for the sanction of the Project. They were not interested in obtaining a
comprehensive, independent analysis of the Project, its costs or its associated
risks, although this is what the public was being told that they were getting.”

LeBlanc leaves no doubt where the ultimate
responsibility lies for the corrupted MHI Report.

It is an indictment of a behaviour unacceptable within even the most pedestrian notions of responsible government. 

In
any other civilized society, the problem of deceit would be resolved in a Court
of law; the culprits fired and held to account. In a civilized society, the
administration of Government would demand that the concept of “bonus” assume
the requirement for extraordinary contribution. As it stands, it is just
another portal for deception.
 

Of
course, the problem may be us – not them – and whether we care about “standards”
in how we are treated, in the handling of public money and in the delivery of public services. 
 

Stan
Marshall took a large cut of the bonus money for himself, notwithstanding his
own abysmal performance as the CEO. He is the guy who was quick to let us know, five years
ago, that he was doing us a favour replacing Ed Martin; his compensation less
than that earned at Fortis Inc. Generosity, however, is not taking from one public
pocket what, if anything, was saved in the other.
 

Five years later, the cost of the Project is
higher than his own forecast and going higher still; the completion date
remains indeterminate. The software issue, synchronous condensers, an
unfinished Powerhouse, and Astaldi litigation remain unresolved. Financing
costs for the debacle mount; repayment of principal on the Bonds began in 2020.
Power rates have not changed, but ratepayers are not off the hook.

COVID remains Stan Marshall’s cover. He has proven
himself unsuitable as a crisis manager; key personnel below him incapable of
elevating their skills as much as their values. But he keeps them around.

On this account, Andrew Parsons exhibits his
unsuitability, too. He is advertising for Stan Marshall’s replacement, not
having considered the skill-set Nalcor needs, how it will be changed or if it
will be shut down.

He seems unaware of the recommendations of Liberty
Consulting who saw “rate mitigation” savings in eradicating massive duplication
with Newfoundland Hydro and Nalcor.

The PUB’s Final Report, “Rate Mitigation Options
and Impacts Muskrat Falls Project”, quotes Liberty Consulting: “the pursuit of
the savings associated with the re-integration of Power Supply and Hydro would promote
the efficiency required to provide reliable service at optimum cost for
customers. Liberty estimated the savings at $12.7 million…increasing to $17.6
million by 2023.” (p.32) Fuly integrated with Hydro the savings would be much higher.

The growth of Nalcor is the reason NL requires
more people per capita (some say five times as many) to operate and distribute
electricity than any other province in Canada.

Other efficiencies proposed by Liberty could include Nalcor’s
marketing and sales division which might be better contracted to a third party.

A merged or redefined Nalcor Energy Inc. suggests
the need for a CEO possessing skills and befitting a “reimagined” Corporation – a
word the Liberals are fond of using. Parsons only knows the “F- word”, as in “flat-footed”.
 

Some have suggested that the award of bonuses is
just bad optics at a time when the province is going through a rough patch
exacerbated by COVID-19. The characterization could not be more inaccurate.
When is rewarding participants in a scandal ever just optics?

But mostly, it is about another Minister who has
‘dropped the ball’. Andrew Parsons holds the most important economic portfolio
in the Furey Government. If he can’t step up, having been given the challenge
of a lifetime, the Premier will need to “reimagine” him, in addition to a
corrupt Nalcor.

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.

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