Kennedy the contrarian says he was no easy sell on Muskrat Falls project

He was one of the loudest and most aggressive champions for Muskrat Falls, but former politician Jerome Kennedy told the public inquiry investigating the controversial hydroelectric project he was also one of its most dogged critics in the boardroom.

"It reached a point in cabinet where at times I was insufferable because of what appeared to be my unending criticisms," Kennedy testified Tuesday during cross-examination by Erin Best, the lawyer representing former premier Kathy Dunderdale.

A critical approach

Kennedy was minister of Natural Resources at the time Muskrat Falls was sanctioned in late 2012 at an estimated capital cost of $6.2 billion, with first-power scheduled to be delivered in mid-2017.

The project was being planned and led by government-owned Nalcor, which reported to Kennedy's department, though repeated testimony at the inquiry revealed Nalcor had a direct link to the premier's office as well.

Kennedy was appointed to the portfolio by Dunderdale after the PCs won an election based largely on the issue of Muskrat Falls, and whether it was the best option for Newfoundland and Labrador's future electricity needs.

Kennedy is a self-described contrarian, a trait he said was honed from his years as a lawyer, and said he "set out to disprove" the case for Muskrat Falls.

Kennedy said he aggressively questioned Nalcor about its assumptions and cost estimates, and at one point, with the support of Dunderdale, set out to see if natural gas was a viable option.

"In the cabinet setting, people would have thought I did not support Muskrat Falls. I was so critical of the process," he said.

The fact we're here, it hasn't worked out the way I'd hoped.- Jerome Kennedy

"I was so critical of all aspects of it."

Kennedy said he eventually agreed with the plan to proceed with Muskrat Falls, after feeling satisfied it was the least-cost option.

But six years later, with the benefit of hindsight, Kennedy admits to some regrets.

"Obviously we're sitting here today," he said of the public inquiry, which is investigating the decision to sanction Muskrat Falls, and why the cost and schedule estimates were so wrong.

"I might have tried my best. We certainly looked at every option. It didn't work out the way, at this point, the fact we're here, it hasn't worked out the way I'd hoped."

He also stated: "I don't know how many occasions I've asked myself, are there things we could have done differently? Are there things I could have done differently?"

'I got very angry'

Kennedy said he served notice to Nalcor very early in his term as minister that he would not be sidestepped, after learning the Crown corporation "had a lot of influence."

During a cabinet retreat, Nalcor officials handed out an information slide presentation to politicians before Kennedy had a chance to review it.

Kennedy said he lost his cool.

"That wasn't on with me. I was not very pleased. I got very angry," he said.

But Kennedy said he had no reason not to trust former Nalcor CEO Ed Martin and other senior executives at Nalcor.

"I never found Mr. Martin at any time to be misleading me or anyone else."

Kennedy said he can be "very forceful," and demanded that critical information about cost and scheduling be passed on to him, since any changes would have an impact of electricity ratepayers, who will pay the cost of building Muskrat Falls.

We're going to wear this, so I want to be informed of what's going on.- Jerome Kennedy

But evidence produced at the inquiry revealed Kennedy was not informed about decisions to remove a half-billion-dollar strategic risk allowance, or the risky approach to developing cost estimates adopted by Nalcor.

A report from a risk consultant that the construction schedule for Muskrat was practically impossible was also kept from Kennedy, he said.

"I was being very forceful with everyone around that we are the politicians. If this thing doesn't work, or if there are problems, we're going to wear this, so I want to be informed of what's going on," he said.

"I expected a body who was working closely with us to provide all relevant information to us. I expected them to repay the trust we had in them with providing us with the information we needed."

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