Nfld. & Labrador

'We wear it': Gilbert Bennett reluctantly admits Nalcor responsible for Muskrat missteps

It was a reluctant acknowledgement, but the Nalcor VP admitted Wednesday the energy corporation shares some of the blame for the missteps that led to Muskrat Falls unravelling.

Lawyer for Astaldi suggests Nalcor should have fired team running controversial project

Nalcor Energy vice-president Gilbert Bennett concluded three full days of testimony at the Muskrat Falls inquiry on Wednesday, June 26. (Terry Roberts/CBC)

It was a reluctant acknowledgement, but a vice-president with Nalcor admitted Wednesday the province's energy corporation shares some of the blame for the missteps leading to the Muskrat Falls project unravelling.

"There are events that have happened. And we're here. And we wear it," Gilbert Bennett told the Muskrat Falls inquiry at the conclusion of three full days of testimony on Wednesday.

Bennett is a key member of the team that put together the controversial hydroelectric project, and currently oversees construction of the 824-megawatt hydro generating station at Muskrat Falls in Labrador.

Prior to that, he was the man in charge of the entire Lower Churchill Project, which also includes the 1,100 kilometre Labrador-Island Link from Muskrat to Newfoundland's Avalon Peninsula, and a separate line connecting Muskrat with the existing Upper Churchill generating station.

This is an illustration of what the Muskrat Falls power station and related infrastructure will look like in late 2020. (Submitted by Nalcor Energy)

His fingerprints are all over a project that was sold to the public at a construction cost of $6.2 billion at sanction more than six years ago, but has since swelled to at least $10.1 billion. Those figures do not include interest during construction and commissioning costs, which increase the price tag to nearly $13 billion.

The terms of the financing require that electricity users in the province shoulder the entire cost of the project, and that has created widespread unease about so-called "rate-shock" once Muskrat reaches full commercial power in a few years.

The inquiry has heard a mountain of evidence that details how Muskrat Falls was beset by a chain of events that nearly derailed the project, eyebrow-raising information about how Nalcor managed its contractors, and what some say was a deliberate strategy by executives to withhold vital information from government and obstruct anyone tying to look behind the curtains and see what was going on.

Lawyer Paul Burgess represents Astaldi Canada at the Muskrat Falls inquiry. (Terry Roberts/CBC)

With that as a backdrop, it was not surprising that Bennett would be challenged on the issue of accountability. But the source of that challenge — the lawyer representing a contractor at the centre of the Muskrat scandal — was somewhat surprising.

Astaldi Canada was awarded the largest Muskrat contract: construction of the powerhouse, transition dam and spillway.

The contract was awarded in 2013 at a value of just over $1 billion, but Nalcor has since paid out more than $1.8 billion to Astaldi.

Nalcor booted Astaldi from the project late last year, and both sides continue to be locked in an arbitration with hundreds of millions more being demanded by the contractor.

A parade of Nalcor executives — including former CEO Ed Martin — and project team members have come to the inquiry and pointed the finger of blame squarely at Astaldi, saying the company failed to deliver on its contract commitments.

But Astaldi's lawyer, Paul Burgess, fired back with a pointed line of questioning for Bennett.

"I put it to you that Nalcor is ultimately responsible … for failing to deliver the project on schedule and on budget. Would you acknowledge and accept that principle?" asked Burgess.

Bennett said that will be up to commissioner Richard LeBlanc to decide.

Commissioner puts question to Bennett

When pressed again by Burgess, Bennett said Nalcor is "managing this project to the best of our ability, and nobody is happy with the result."

Not satisfied that Bennett was giving a full answer, LeBlanc stepped in.

"What do you say to the people of the province with regards to Nalcor's responsibility for the fact that this project is" billions over budget and roughly two years behind schedule? LeBlanc asked.

That's when Bennett acknowledged, "There are things that could have been controlled. There were things that weren't controllable."

But once again, no apologies. No heartfelt expressions of regret.

For his part, Burgess suggested the project management team, a group of contractors hand-picked by Nalcor brass, mostly from the oil and gas industry, were responsible for the problems.

Justice Richard LeBlanc is commissioner for the Muskrat Falls public inquiry. (Terry Roberts/CBC)

"Did you ever consider replacing members of the project management team, given the challenges that were being faced?" asked Burgess.

Bennett said no, and added: "There are lots of challenges by multiple parties in relation to execution of the work."

Bennett, meanwhile, was questioned on a wide range of issues ranging from cost estimates and project oversight to environmental concerns and the plan to provide backup power in the event the Muskrat power supply to Newfoundland is cut.

The province's Minister of Natural Resources, Siobhan Coady, is scheduled to testify on Thursday, June 27, while Nalcor CEO Stan Marshall will begin what's expected to be three days on testimony on Friday.

The current phase of the inquiry will conclude July 4-5 with Premier Dwight Ball as the witness.

ABOUT THE AUTHOR

Terry Roberts is a journalist with CBC's bureau in St. John's.

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