New Nalcor CEO named
Stan Marshall in after Ed Martin resigned
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.”
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.