New Nal­cor CEO named

Stan Mar­shall in af­ter Ed Martin re­signed

The Gulf News (Port aux Basques) - - NEWS - BY JAMES MCLEOD

Stan Mar­shall said he never wanted the job, but he1ll be tak­ing on Nal­cor En­ergy as the new CEO.

Mar­shall served as the pres­i­dent and CEO of For­tis for 18 years, and he has a to­tal of 35 years in the en­ergy busi­ness.

The an­nounce­ment Thurs­day morn­ing came just one day af­ter for­mer CEO Ed Martin an­nounced he was re­tir­ing to spend more time with his grand­chil­dren.

At the news con­fer­ence with Premier Dwight Ball and Nat­u­ral Re­sources Min­is­ter Siob­han Coady, Mar­shall ex­pressed skep­ti­cism about the trou­bled Muskrat Falls hy­dro­elec­tric project.

Mar­shall said that he did­n1t think Muskrat Falls was a good idea at $5 bil­lion, and with cost over­runs and sched­ule de­lays, the to­tal price tag is now much closer to $10 bil­lion.

There was no job search to pick Mar­shall as the new Nal­cor boss. De­spite Bal­l1s prom­ise to run open, non-po­lit­i­cal ap­point­ments, he per­son­ally talked Mar­shall into tak­ing the job this week, af­ter learn­ing that Martin would be mov­ing on.

Nal­cor CEO Ed Martin ad­dressed the me­dia last Wed­nes­day to an­nounce his abrupt de­par­ture from the prov­ince’s en­ergy cor­po­ra­tion, and that af­forded re­porters a chance to ask about the Muskrat Falls project.

The be­lea­guered megapro­ject is be­hind sched­ule and over bud­get, and in­de­pen­dent con­sul­tant EY has said that there’s a lack of ad­e­quate over­sight to keep Nal­cor in line.

But the sec­tion of the EY re­port that drew the most at­ten­tion last week was a para­graph say­ing that per­for­mance by lead con­trac­tor Astaldi has gone off the rails based on a poorly-struc­tured con­tract.

The pow­er­house por­tion of the Muskrat Falls site is months be­hind sched­ule, and over­bud­get.

EY raised con­cerns that Nal­cor pay­ments were ef­fec­tively tied to labour costs rather than per­for­mance, mea­sured by cu­bic me­tres of con­crete poured.

“This mech­a­nism did not cap­ture the po­ten­tial for poor con­tract man­age­ment of labour and the con­se­quent de­cou­pling of labour paid for from work com­pleted,” EY wrote.

“As at De­cem­ber 2015, the pro­por­tion of con­tract value paid to the con­trac­tor is sig­nif­i­cantly greater than the pro­por­tion of the con­crete that has been placed.”

On April 20, Martin de­fended the de­ci­sion to tie Astaldi pay­ments to labour, rather than con­crete poured.

“There’s noth­ing wrong with what we did, and the rea­sons for it were to drive ef­fi­cient use of labour, which is a crit­i­cal part of the project,” Martin said.

But Martin was singing a very dif­fer­ent tune a year ago, when he was asked about this ex­act topic at the com­pany’s 2015 an­nual gen­eral meet­ing.

A ci­ti­zen asked if the Astaldi con­tract was a fixed-price con­tract, and Martin replied, “The short an­swer is yes.”

He then went on to ex­plain that the con­tract with Astaldi was a “unit-rate” con­tract.

“They get a unit amount for ev­ery bit of con­crete that they in­stall,” Martin said. “So it’s called a unit-rate con­tract. Pro­vided we don’t change the engi­neer­ing specs, it’s es­sen­tially a fixed-price con­tract.”

When Martin was asked about the con­tra­dic­tion, he said, “I can’t re­mem­ber say­ing those types of things.”

JAMES MCLEOD PHOTO

Nal­cor CEO Ed Martin’s res­ig­na­tion an­nounce­ment was a chance to ask about the sta­tus of the Muskrat Falls project. Martin’s past state­ments about the crit­i­cal Astaldi con­tract ap­pear to con­tra­dict what he’s say­ing to­day.

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