Astaldi meltdown symbolic of rush to sanction Muskrat Falls, says consumer advocate
Dennis Browne says 'premature' project approval shows public interest was not protected
The man whose job it is to protect the interests of electricity ratepayers in Newfoundland and Labrador says the Astaldi eviction from Muskrat Falls is symbolic of the rush to sanction the controversial project.
Dennis Browne, the province's consumer advocate, said he was alarmed by news Thursday that Astaldi, the company hired to construct the hydro generating station and related infrastructure at Muskrat Falls, was told by Nalcor Energy to stop work.
The extreme measure was taken following yet another outbreak of legal and financial clashes between Nalcor and Astaldi, and constant headlines about Astaldi's financial woes.
Browne was not entirely surprised by this latest setback, saying it was clear from the start that Nalcor Energy and the provincial government, led by then-premier Kathy Dunderdale, "unnecessarily and prematurely" sanctioned the project on Dec. 17, 2012.
Browne has been spending his days attending public hearings for the ongoing judicial inquiry into Muskrat Falls, and the well-documented cost and schedule overruns that have caused so much controversy and concern in Newfoundland and Labrador.
He's long been a skeptic of the project, and was part of a group of lawyers who formed the 2041 Energy group six years ago in order to oppose Muskrat Falls.
No urgency to sanction project: Browne
Browne said evidence shows that project leaders were warned that construction schedules were extremely ambitious.
Inquiry testimony has also revealed how Astaldi struggled to mobilize its operations in Labrador, and that Nalcor had to step in after SNC-Lavalin, the company awarded the critical construction management contract, failed to fill key positions on its team.
Browne said these problems could have been avoided if Nalcor, which owns the project on behalf of the province, had spent at least another year examining the ramifications of proceeding with Muskrat Falls.
There was this massive and unnecessary rush and it's never been really explained because we didn't need the electricity in an urgent and emergency basis.- Dennis Browne
"We had every ability to do so," said Browne.
"Instead there was this massive and unnecessary rush and it's never been really explained, because we didn't need the electricity in an urgent and emergency basis under any circumstance. And it's doubtful from what we know today if we needed the electricity in that quantity in any case."
The Lower Churchill Project, as the entire project is known, includes the 824-megawatt hydroelectric facility near Happy Valley-Goose Bay, the 1,100-kilometre transmission line from Labrador to Newfoundland's Avalon Peninsula, and a new transmission line from Muskrat Falls to the existing Upper Churchill generating station.
The project was sanctioned at a construction cost of $6.2 billion, with first power scheduled for mid-2017.
Construction costs have since soared to $10.1 billion, with all-in costs, including financing charges, driving the price to nearly $13 billion. And first power from Muskrat is not expected until mid-2019.
Public's interest ignored
Nalcor's partner in the project, Emera Inc., constructed the new Maritime Link across the Cabot Strait that will transmit Muskrat power to Nova Scotia. It came in on budget at a cost of roughly $1.6 billion.
Browne said it's clear to him "there was no one really looking out for the public interest."
He said confusion reigned during early planning and construction, and added it's "very concerning" that Nalcor's project team was dominated by those whose expertise was grounded in the oil and gas industry.
"Makes you wonder if oil and gas people were doing a project, would they use all hydroelectric people? Doubtful. It was a situation that was totally inappropriate," says Browne, adding that all the warning signs of trouble ahead were missed because Nalcor's leadership "seemed to know better than anyone else."