Nfld. & Labrador

Muskrat Falls another 10% over budget, cost climbs to $7.65B

Hydro-electric project Muskrat Falls is another 10 per cent over budget, Nalcor told reporters in Labrador Tuesday.

First power pushed to 2018

Muskrat Falls

8 years ago
Duration 1:16
Project Manager Scott O'Brien gave the media a tour of the facility on Monday.

The Muskrat Falls hydro project is another 10 per cent over budget, Nalcor Energy told reporters in Labrador Tuesday, warning that there could be more cost overruns in the future.

Nalcor CEO Ed Martin said early Tuesday afternoon that the construction cost for the project is now forecast at $7.65-billion. 

"There will be some cost risk with executing this project as we move forward. Our job is to continue to manage it and 
and keep it where it should be," Martin said.

In addition to the increasing cost, Martin said first power — which originally was supposed to be generated by December 2017 — has been pushed back to 2018. 

The Muskrat Falls project is another 10 per cent over budget, Nalcor announced Tuesday. (Azzo Rezori/CBC)

Martin could not give an exact date.

The subcontractors are checking out all options to speed the project up after the slow start on the project's power house, Martin explained.

'A tough, tight marketplace'

Martin said three factors were to blame for the increase in cost, with market pressures making up two-thirds of the overrun.

"It's a tough, tight marketplace right now, " said Martin.

 That is having a big effect on tenders. 

"What we're seeing in these bids when they come in, they're higher, much higher than we have budgeted for," said Martin.

"What we're doing is experiencing cost increases we really can't control in that area."

The other two contributors to the overrun include additional project management, and construction design changes, most notably to the transmission line in Central Labrador.

"Some of the soil conditions required us to make some changes, particularly to the bases that the big transmission towers sit on," said Martin.  "So we've had to go deeper in some cases, we've had to expand some of the bases that hold the towers. and obviously that takes a little more material and it takes a little more time." 

The project is in its third full year of construction, with work for the project taking place in more than 100 locations across Newfoundland and Labrador and around the world, a Nalcor release stated.

In June 2014, Nalcor pushed the price tag to $6.99-billion, marking the second upward shift from when the project was announced in 2010. 

The new figure does not include the cost of the Maritime Link, which was estimated at $1.5-billion last year, that will bring power from Newfoundland to Nova Scotia.

Emera will bear that cost. 


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