Nfld. & Labrador·CBC Investigates

Muskrat Falls subcontractors get payments as Nalcor due diligence audit continues

Cash has started to flow to subcontractors who filed lawsuits over allegations of unpaid work on buildings at Muskrat Falls.

$3M paid out for claims against Opron Construction; surety bond expected to cover remaining $5M

Muskrat Falls, the site of the Lower Churchill hydro project, is pictured in this undated file photograph. (CBC)

Cash has started to flow to subcontractors who filed lawsuits over allegations of unpaid work on buildings at Muskrat Falls, although Nalcor Energy has yet to complete an audit into the vetting process it used to green-light the winning bidder.

In 2013, Opron Construction won the contract to supply and install nine buildings at the Muskrat Falls work site. That contract was worth up to $18 million.

More than a dozen subcontractors alleged they weren't paid for work they did and later filed mechanic's liens, then lawsuits, against Opron Construction totalling more than $8 million.

Nalcor Energy is headquartered in St. John's. (CBC)
Now, Nalcor says subcontractors have received $3 million from the holdback and contract balance to discharge or reduce the lien claims.

The Crown-owned energy corporation believes the remaining $5 million will be paid out through Opron Construction's surety bond for the contract.

Documents filed at Newfoundland and Labrador Supreme Court show that some of those lawsuits have been discontinued.

Others have not. Opron Construction has filed a countersuit in one case.

Emails to the lawyers for Opron Construction, surety bond company Intact Insurance, and the two subcontractors with the largest pending court claims were not returned.

Link to Charbonneau commission

Three months ago, CBC Investigates revealed that Nalcor placed Opron Construction on its approved bidders list for Muskrat Falls work the same month the Quebec company's majority owner testified about handing over envelopes of cash for public works projects in his home province, but denied involvement with the Mafia.

Giuseppe Borsellino appeared at Quebec's Charbonneau commission in early 2013, where he confirmed that he and his cousin were 51 per cent owners of Opron Construction.

Giuseppe Borsellino testified at Quebec’s Charbonneau commission in February 2013. (CBC)
Borsellino admitted at the commission to participating in a collusion scheme, involving one of his other companies, that saw bids rigged for Montreal municipal public works contracts.

Nalcor green-lit Opron Construction for Muskrat Falls work the same month.

CBC Investigates has no information to suggest there was anything improper about the contract award to Opron Construction.

But Premier Paul Davis acknowledged in June there were questions about why the vetting process did not catch the company's connection to the Charbonneau commission.

Nalcor launched an audit of the due diligence it carried out.

Three months later, that audit is not complete, and the energy corporation is providing no timeline on when it expects that to happen.

Gilbert Bennett, Nalcor's vice-president for the Lower Churchill project, was not available for an interview, but sent a written statement to CBC Investigates.

"The audit is designed to confirm that appropriate due diligence was completed during the evaluation and pre-award process for this contract, and in accordance with the project's procurement practices," the statement noted.

"The audit is ongoing and Nalcor is committed to ensuring the process is completed thoroughly and in a timely manner."