Flunk­ing the ‘smell test’

Cape Breton Post - - Editorial -

Once is an ac­ci­dent. Twice is co­in­ci­dence. Three times is a pat­tern. And for Nal­cor, it’s look­ing like a clear pat­tern of be­ing a law unto it­self. At its birth, then-New­found­land and Labrador premier Danny Wil­liams and his gov­ern­ment de­lib­er­ately set the Crown cor­po­ra­tion out­side a num­ber of the rules that usu­ally reg­u­late such com­pa­nies. In or­der to com­pete with oil gi­ants and other big hit­ters, Nal­cor, the gov­ern­ment of the day sug­gested, had to be nim­ble, quick, and able to be its own boss.

It looks less and less like that worked out very well. You need only look at three events in the last few weeks. First, an EY re­view of the Muskrat Falls pointed out that Nal­cor’s own board of di­rec­tors was mak­ing de­ci­sions on the project with in­for­ma­tion that was as much as two months old.

Next was Mon­day’s “smell test.” Over the week­end, The Tele­gram in St. John’s re­ported on how the cor­po­ra­tion was us­ing con­trac­tors to do 90 per cent of Muskrat Falls project man­age­ment, and was re­fus­ing to re­lease pay rates for those con­trac­tors us­ing a “com­mer­cially sen­si­tive in­for­ma­tion” clause in the En­ergy Cor­po­ra­tion Act (just one clause that is part of the com­pany’s spe­cial “nim­ble” struc­ture).

New­found­land and Labrador Premier Dwight Ball, asked about the se­crecy on pay rates, said the com­pany’s de­ci­sion to hide the in­for­ma­tion “didn’t pass the smell test.”

“Once we put money out there, tax­pay­ers’ money, sim­ply say­ing that it’s com­mer­cially sen­si­tive doesn’t pass the smell test for me. I’ll be reach­ing out to the board of di­rec­tors to get to the bot­tom of this,” Ball told re­porters, ap­par­ently un­aware him­self about the size of the shadow work­force and its pay rates.

Then, there’s this, also from Mon­day, from a Nova Sco­tia Util­ity and Re­view Board de­ci­sion on whether or not NSP Mar­itime Link (NSPML), an Emera com­pany re­spon­si­ble for the un­der­sea power ca­ble between New­found­land and Nova Sco­tia, would be al­lowed to start billing cus­tomers for the cost of the link, even though Muskrat Falls is woe­fully be­hind sched­ule.

“The Board is con­cerned about the sig­nif­i­cant de­lays in con­struc­tion of the Muskrat Falls Gen­er­at­ing Sta­tion and NSPML’s ap­par­ent lack of in­sight on what is hap­pen­ing at Muskrat Falls. Es­sen­tially, NSPML ap­peared to learn about the two-year de­lay con­tem­po­ra­ne­ous with it be­ing an­nounced pub­licly, yet at the same time its rep­re­sen­ta­tives sit on joint com­mit­tees with rep­re­sen­ta­tives of Nal­cor deal­ing with the project. This lack of in­sight is trou­bling to the Board.”

When even your part­ners don’t know the true state of their joint in­vest­ment, some­thing’s gone se­ri­ously wrong.

The mes­sage? While the in­ten­tion of hav­ing an in­de­pen­dent en­ergy cor­po­ra­tion might have been fine in the­ory, in prac­tice, the Wil­liams gov­ern­ment may have cre­ated a mon­ster. Full, un­fet­tered over­sight might have pre­vented the “en­ergy ware­house” from cre­at­ing the Muskrat Falls boon­dog­gle and ac­com­pa­ny­ing mon­ster debt.

When you hand over all the keys, some­times you get locked out of your own house.

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