Nalcor CEO says cancelling Muskrat Falls 'very unlikely'

The new CEO of Nalcor says it's very unlikely the company will scrap the Muskrat Falls project, but adds other changes are coming.
The new CEO of Nalcor says it's very unlikely that the Muskrat Falls project in Labrador will be cancelled (Andrew Vaughan/Canadian Press)

The new CEO of Nalcor says it's very unlikely the public utility will scrap the Muskrat Falls project, but changes are coming to the project.

Stan Marshall made the comments Friday during a Nalcor financial update conference call. It's his first public comments after taking over the utility in April.

Marshall said the project is too far along at this point to turn back now.

"Recognizing where the project is, substantial progress has been made, the commitments have been put in place, it's very unlikely it will be cancelled," he said.

I see my task as to do whatever is necessary to ensure it proceeds in the best interest of the people of this province.- Stan Marshall

Marshall said the company doesn't plan to postpone the project, but there will very likely be further delays beyond Nalcor's control.

An update of the total cost and new timelines is now expected at the end of June. 

The latest cost estimates put the total price tag at $7.7 billion. First power right now is scheduled for early in 2018.

"My job right now is to focus on where we go from here, course of action," said Marshall.

"I see my task as to do whatever is necessary to ensure it proceeds in the best interest of the people of this province."

Marshall said changes are coming to the management of the Muskrat Falls project to get it back on track, changes he said are expected to be announced in June.

Stan Marshall says changes are coming to senior management of both the Muskrat Falls project and Newfoundland and Labrador Hydro. (Terry Roberts/CBC)

According to Marshall, there are "necessary changes at the very senior management level" to provide better oversight to keep the project on track.

He also plans changes to management at Newfoundland and Labrador Hydro, with the aim to improve reliability of the utility.

The Public Utilities Board (PUB) recently ruled Hydro can't pass on to customers about $7 million dollars in costs relating to the power outage in January 2014, because the company didn't do proper maintenance to avoid the outage.

'Very serious' issue with main contractor

Marshall said all existing contracts at Muskrat Falls will be honoured, but added it is possible the main Muskrat Falls contractor could be removed.

Astaldi was contracted to do most of the major work on the dam. However, the company is behind schedule and there are negotiations underway now with the Italian company to get the project back on track.

"The Astaldi situation is very serious," Marshall said on the conference call, adding his first preference is to resolve the issues with the company.

However, he said replacing it is still an option.

"We have an issue with them, we will hold discussions with them and hopefully those can be resolved, but I can't control what Astaldi does," said Marshall.

"We have to prepare for the eventuality that something happens to them, or that they need to be replaced, or walk off the site, who knows."


Peter Cowan

CBC News

Peter Cowan is a St. John's-based reporter with CBC News.