‘We didn’t need to see a report’ from independent watchdog

James McLeod
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Minister says Ottawa’s $5-B loan guarantee for Muskrat Falls was based on engineer’s draft report

The provincial government didn’t bother to ask to see a key report from the only body assigned to do ongoing independent oversight of the Muskrat Falls project, according to Natural Resources Minister Derrick Dalley.

Derek Dalley

What’s more, Dalley said the reason the government never saw the report was because the Government of Canada authorized a $5-billion loan guarantee based on an interim draft of an engineer’s report.


Completed in November

The Muskrat Falls independent engineer filed a report with the federal government on the project in November, but the provincial government only received an updated copy of that report on Friday.

“I didn’t ask for that report,” Dalley said. “I guess we expected the report to be sent to us when it was done and completed, and we received it on Friday.”

When the federal government agreed in principle to provide a loan guarantee for the Muskrat Falls hydroelectricity project, one of the conditions it placed on the deal was that an independent engineer be hired to study the project and sign off on it.

That report was done by engineering firm MWH Canada and was delivered to the federal government in November. It had to be completed before the provincial government could borrow $5 billion to finance the Muskrat Falls project.

Dalley insisted the November report was only an interim draft report, but it was good enough to satisfy the federal government to authorize the federal loan guarantee.

“It was not a finished report,” Dalley said.

It was three months — after the money was borrowed — before an updated copy of the report was provided to the provincial government, Dalley said.

“We have the report as of Friday, and we’ve also been told this evening that is not the final, final report,” he said.

Dalley was at a loss to explain why the provincial government got the February interim report but didn’t get the critical November interim report, which was the basis for the $5-billion loan guarantee.

When asked, he said, “Good question. Ask the Government of Canada.”

Dalley said he never asked for the November report because he didn’t feel he needed to see it.

“We didn’t need to see a report for the federal loan guarantee,” he said. “We’ve got our own work done around the project and the loan guarantee and the financing.”

Dalley acknowledged that the independent engineer is the only body doing any independent oversight of the Muskrat Falls project while it’s under construction.

“The independent engineer is providing the oversight,” he said. “Beyond that, we don’t have anyone in place to provide oversight over the construction.”

Beyond the independent oversight, Dalley said the primary way of getting information and project updates comes directly from Nalcor CEO Ed Martin, who provides information to the deputy minister of the Department of Natural Resources.

“Ed Martin is the key point of access and the person we work very closely (with),” Dalley said. “The deputy minister would be the primary point of contact, I guess, and obviously they report to me.”

He said the government is looking at potentially putting some other form of oversight in place to keep an eye on Nalcor while it constructs the $7.7-billion project.

There is no one within the Department of Natural Resources who is studying Nalcor’s engineering and design work in detail, and when it comes to the only independent body doing that sort of work, the government didn’t get the report until three months after it was written.

But Dalley said it would be a waste of resources to have anybody in the Department of Natural Resources doing that kind of detailed oversight.

“I think what we need to recognize — and I would appreciate it if you would — is that Nalcor has assembled a team of experts. The experts are in the engineering oversight, and the work that’s being done for the project (is) among the best of people that we could find,” Dalley said. “We don’t have within the Department of Natural Resources the entire expertise to get down to every little nitty gritty detail about engineering decisions. We have Nalcor, which is a company that’s owned by the people of the province that have experts, among the absolute best that we could find.”

Dalley said he’s unsure whether the independent engineer’s report will ever be released publicly — in part or in full — although Nalcor has already refused to provide a copy of it to The Telegram, citing commercially sensitive information.

He said that was mainly to protect Nalcor’s commercial interests, but also partly to protect the private companies that are doing work for Nalcor.

“If it’s commercially sensitive, and it’s going to have an impact, a negative impact, on another entity or government, you know, we can’t do that,” Dalley said. “Legally, we probably can’t do that.”

Dalley said the government is a strong believer in project oversight and monitoring, which is why the Muskrat Falls development was sent to the Public Utilities Board for a limited review, and why independent contractors were hired to study it before it was sanctioned.

“When we look at this project and as we continue on with building Muskrat Falls, oversight (and) accountability we understand. It’s important for the people of the province, important for our government. There’s been tremendous oversight,” he said. “We’re continuing to look at other ways in which we can ensure that the people of the province continue to have confidence in Muskrat Falls.”



Twitter: TelegramJames

Organizations: Department of Natural Resources, Public Utilities Board

Geographic location: NovemberThe Muskrat Falls, Canada, Ottawa

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Recent comments

  • Brian
    February 25, 2014 - 17:13

    This Guy would like to be PREMIER-----.I Hope that there are others to step forward. As Lynn Verge once articulated " All Fluff and no stuff "and that comment is generous . What a waste of a ministers salary.

  • Too Funny
    February 25, 2014 - 14:31

    "We didn’t need to see a report". Right up there with "Badges, we don't need no stinkin' badges".

  • Tony Rockel
    February 25, 2014 - 12:57

    "We don't need to see a report" is like Air Traffic Control saying "Yeah, there's a lot of traffic up there, but we don't need to watch the screen--- those pilots know what they're doing".

  • Scott R
    February 25, 2014 - 12:12

    Why do people keep calling out to the leader of the Zebra Party, He probably still in Montreal, wack out of his mind. From the wacky smoke party Mr J T put on...LOL... Or maybe he hoping the same thing may happen to him, Like what took place with Ms Michael and Ms Dunderdale. Because more and more people are questioning his leadership abilities. Or it could be the in fighting. where he took in the turncoats. But what every his reason. Ball should be front and centre concerning Muskrat Falls,

  • Tony Rockel
    February 25, 2014 - 12:05

    “We’re continuing to look at other ways in which we can ensure that the people of the province continue to have confidence in Muskrat Falls.” Oh yes, Bill 29 and our government's continuing arrogance and secrecy have given us NO END of confidence in Muskrat Falls.

  • EDfromRED
    February 25, 2014 - 12:05

    The PC's should start wearing Race car driver jumpsuits, and put the Nalcor logo all over them. They might as well officially call themselves The Nalcor Party. Their embarrassing subservient behavior to this corporation boggles the mind and boils the blood.

  • Linda
    February 25, 2014 - 11:46

    Oh Mr Ball, come out of hiding, we neeeeeeeeeeed you like yesterday. Our great white hope...LOL...

  • david
    February 25, 2014 - 11:33

    "Hubris goeth before a fall". Words to live by......and we do.

  • Joe
    February 25, 2014 - 11:02

    But the Conservatives are the only party capable of running government properly and not getting the taxpayer deep in debt. So who do we replace them with?

    • Willi Makit
      February 25, 2014 - 13:28

      Really? what dream world do you live in? This government has been blessed with far more money than any previous government - and they're still running deficits. Keep drinking the kool-aid.

  • Tony Rockel
    February 25, 2014 - 10:26

    "Gov of Can asked for this and they were satisfied with interim report, " Gov of Can will be satisfied with ANY report, just so long as it means the taxpayers (this time the NL taxpayers) are on the hook for the full shot.

    • Maurice E. Adams
      February 25, 2014 - 10:41

      My thoughts exactly............ The federal government is there to look after Canada's best interest, it is Dalley's job to look after our best interest ---- or is it that he has not yet realized what it is his job entails (leaving if to his DM and our proxy premier --- Ed Martin).

  • Charles
    February 25, 2014 - 09:37

    These really doesn't feel like much of story. Almost seems like the author thinks this is bigger than it really is maybe? Why would the prov have someone redo all of Nalcors engineering work? Let them do their job and but watch the costs. That's it. Gov of Can asked for this and they were satisfied with interim report, and doesn't that make sense when the project is still ongoing? Also making the report public is probably fine. Probably wont add much and all the critics will no doubt try to twist things and confuse the public but what odds, they've been doing that nonstop already.

    • Tony Rockel
      February 25, 2014 - 10:08

      If it's all so above board, then why does Nalcor refuse to tell us anything (except in totally information-free terms) about what they're doing?

  • Tony Rockel
    February 25, 2014 - 09:07

    "We didn't need to see a report"??? In the words of Pink Floyd: "We don't need no education." Yes, let's trust every word Nalcor utters. They've proven themselves to be SO trustworthy.

  • Leon
    February 25, 2014 - 08:59

    “The deputy minister would be the primary point of contact, I guess, and obviously they report to me.” YOU GUESS!! What a Bunch of crap!

  • Cashin Delaney
    February 25, 2014 - 08:16

    There’s been tremendous oversight,” he said. “We’re continuing to look the other way until I go to jail.” Derrick Dalley will be in Ed Byrne's old cell before 2016. Scapegoat blood flowing thick will absolve the rest, again, won't it. It won't be for stealing pencils this time Derrick, you are a young man, sin to have us lock you up for the remainder of the good years. Quit while you can, you are the lamb buddy. Lawyer up me son, when the music stops, you won't have a seat, not even a toilet seat. Go find a real job.

  • Un-Paid MHA
    February 25, 2014 - 08:14

    This is starting to go from bad to worst now. What a nightmare the Tories have turned into. This tells me now more than ever that we need some one else running government and also eliminates any confidence I had left in them. What is going on? We need some one to get in there and tell us what's going on and how much this business deal the province got suckered into as the revenue base is going to cost!

  • Maurice E. Adams
    February 25, 2014 - 08:08

    Dalley should resign.

  • Tom M
    February 25, 2014 - 08:01

    No government oversight? Nalcor is providing oversight of itself? Didn't need to see the independent report? This is incompetence at the highest level.

  • Jon Smith
    February 25, 2014 - 06:58

    We the people need to get this PC ship of fools to the polls so that we can launch the final torpedo. Our only hope will be to elect a government that can alleviate the damages inflicted by this PC government with this giveaway white elephant called Muskrat.

  • concerned
    February 25, 2014 - 06:32

    This article epotimizes what is wrong with this project. Nalcor and the Provincial government are joined at the hip. But for Dalley to admit this in public? There has been no oversight on this project plain and simple. When there has, it has been ignored. 1) CEAA in 2011 concluded that Nalcor had not done their work in reviewing options, did not think MF made economic sense how it was structured 2) Navigant report was something that 100 k would pay for, did not do a detailed review of the project 3) PUB was ringfenced to look at 2 options only. The successful infeed option did not include the link to NS. The 167 MW currently going to NS was assumed available to NL. It was wrong. 4) The MHI report(s) were premised on the same thing. 5) All the reports the government did on Wind did not include the interconnected case. 6) The Gas reports were totally wrong as they did not consider export/electricity together. 7) There has been limited debate in the HOA. The opposition parties do not understand the project, and the Tories know even less (With the exception of Marshall and Kennedy). 8) The Feds did a rubber stamp review of the FLG as the province is imdemnifying them for any damages 9) The banks did not need to look at it because of the FLG and 10) The provincial government are too embedded into the project to look now. Who is protecting the ratepayer?

    • Tony Rockel
      February 25, 2014 - 15:36

      Oh, and by the way, Mr "Smith", when the ratepayers are no longer able to afford MF Falls electricity (which will be a very large percentage of them) it will be the taxpayers who have to take up the slack. Directly or indirectly, the taxpayers of this province will foot the multigenerational bill.

  • John Smith
    February 25, 2014 - 06:31

    There were two independent reviews done...one by Navigant, and one by MHI...how many more do we need?The media need something to write about now that Ms. Dunderdale is gone....too bad they can't focus on the real problems affecting the province....

    • Tony Rockel
      February 25, 2014 - 06:55

      If you can justify the MF fiasco, you can justify ANYTHING. Easy for you to spout your bullshit when you are too gutless to use your real name.

    • John Smith
      February 25, 2014 - 13:06

      Well Mr. Rockel it isn't hard to justify the muskrat falls project...we have a need for power, our 45 year old oil fired plant is falling apart, and Muskrat comes in 2.5 billion cheaper than the nearest alternative...all the lunatic fringe ranting can't change those facts sir. Oh, and by the way...the muskrat Falls project will not cost the taxpayers of NL one penny, it will be paid for by rate payers...those who will buy the power....not tax payers....

    • Tony Rockel
      February 25, 2014 - 15:27

      Well, "John" in your tiny mind it may not be hard to justify the MF project. You can keep on repeating your phoney figures until the cows come home but it won't make them any more believable. You can also rant on all you like about "the lunatic fringe" (that is, anyone who dares to criticize this massive charade). In either case, your outpourings of bovine excreta only go to show that you are either a charlatan or a fool (or both).

  • Flourlake
    February 25, 2014 - 06:12

    Outrageous, that nobody is overseeing this project. There is an immediate need for a review and if the cost is over than walk away. Somebody is getting rich at the expense of the taxpayers of this province. Who announce this project?

  • Crazy
    February 25, 2014 - 05:59

    What's the hell going on here, its time to put the break on, and clean house at Nalcor, And our so call government leader. we got to be the stupidest people in the world to lets this to continue, Where is this guy Ball, Shouldn't he be saying something concerning what going on, Or his he another one toll big business lines also?