Nalcor has released an independent report on the Muskrat Falls project that largely approves of the utility's management of the project.

But Nalcor CEO Ed Martin said there's no doubt the project will cost more than the original estimate of $6.2 billion, despite savings of more than $1 billion from a federal loan guarantee.

Martin also said the hydroelectric mega-project also might not deliver first electricity by 2017 as planned.

"We are seeing some pressure, and we are going to see some increase in that $6.2 billion. I can't talk about the magnitude just yet, but we are aggressively managing it," he said.

Muskrat Falls construction aeriel

The cost of the Muskrat Falls project is set to climb above the $6.2-billion estimate due to contractors and productivity, says Nalcor CEO Ed Martin. (CBC)

"The schedule that we said that we can achieve, they say [in the report] that's possible, but they do note that the target in-service dates remain under pressure, and we agree with that."

"They" is the independent engineering firm MWH Canada.

Martin said the increasing costs of production relate mostly to contractors and productivity.

Delaying power delivery could save costs

He said the increased costs could be avoided by spreading out the work more, which would then force the dates for first power delivery further back.

While Nalcor sees the report as a stamp of approval, there are portions that are blacked out to the public.

According to Martin, the utility wants to keep certain figures private while it continues contract negotiations.

"It's not prudent to show any type of information when you're in deep negotiations, and that's just protecting the people of the province," he said.

Martin said Nalcor is getting a clearer picture of the total costs, and they could be available at the utility's annual meeting in June.