'I have to have a Plan B': Nalcor Energy, Astaldi at loggerheads over Muskrat Falls costs

Nalcor Energy CEO Stan Marshall acknowledged Wednesday that the energy corporation and the main contractor for Muskrat Falls are at loggerheads over delays and cost overruns on the major project.

Stan Marshall says company looking for hundreds of millions in extra payments

New Nalcor CEO Stan Marshall talks about the problems that the Muskrat Falls project is currently facing. 2:09

The main contractor on the Muskrat Falls hydroelectric generating facility is looking for hundreds of millions in extra payments, says Nalcor Energy CEO Stan Marshall, and both sides remain far apart when it comes to a settlement.

Marshall acknowledged that Nalcor will eventually have to cough up more money on a contract already valued at roughly $1.1 billion. The question is how much?

"I don't know how this will be resolved," Marshall told reporters Wednesday.

The powerhouse is way behind schedule, and costs have risen substantially.

High level meetings between Nalcor and the Italian construction company were held last week, and Marshall confirmed that both sides are still far apart.

So much so, that Marshall is weighing all options, including the possibility that Astaldi may be replaced.

"I have to have a Plan B," Marshall said.

The construction site of the hydroelectric facility at Muskrat Falls is seen on July 14, 2015. (Andrew Vaughan/Canadian Press)

Marshall said that's not the preferred option, since it will drive costs further on the project, and result in further delays.

"I think we exchanged our points of view at the very senior level," Marshall said of the meetings. "There were no changes made as a result of those negotiations."

'We don't want to give them any more'

When asked if Astaldi is looking for hundreds of millions, Marshall said "I would say."

"At the end of the day what they want is more money. And from our point of view, we don't want to give them any more money."

Attempts to arrange an interview with Astaldi were unsuccessful Wednesday.

Marshall added that Nalcor has honoured its commitments, and he wants Astaldi to do the same.

"Their argument is that certain things have changed and they are entitled to more. It's a typical dispute between owner and contractor."

So will Nalcor, a Crown corporation whose shareholders are the taxpayers of Newfoundland and Labrador, have to write a large cheque for Astaldi in order to see the power generating project through to completion?

Here's how Marshall answered that question:

"Ourselves and Astaldi are going to increase costs. Yes. It's uncertain. And it's the biggest uncertainty we have."

About the Author

Terry Roberts

CBC News

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