Nfld. & Labrador

Nalcor profits up despite 'major disruption,' says quarterly report

Crown corporation Nalcor is boasting a positive end to its third quarter of 2016, despite acknowledging the protests at the Muskrat Falls site caused a "major disruption."

Quarterly report does not reveal exact figures on money lost to Muskrat Falls protests

Nalcor CEO Stan Marshall says the Crown corporation's financial situation at the end fo 2016 remain 'very sound.' (CBC)

Nalcor is boasting a positive end to its third quarter of 2016, despite acknowledging the protests at the Muskrat Falls site caused a "major disruption" to the project.

In a news release on Monday morning, Nalcor revealed a $37.5-million profit for the quarter, compared to a $1.2-million loss for the same timeframe in 2015.

The increase was largely due to higher oil production and reduced operating costs, the release said.

We are focused on getting back on track and completing as much work as possible before the onset of winter.- Stan Marshall

"Nalcor's financial position to the end of the third quarter 2016 is very sound," said Nalcor CEO Stan Marshall.

"Construction of the Muskrat Falls Project did suffer a major disruption in October due to protests. We are focused on getting back on track and completing as much work as possible before the onset of winter."

Marshall estimated the protests cost between $200 million and $300 million and caused a two-to-three-month delay, but he can't confirm those numbers until later in the winter or spring. 

Cost of deal

Marshall also said he doesn't know how much the new deal between Indigenous leaders and government will cost the company.

"Until we know what we're going to be directed to do, we won't be able to quantify those in time or cost," Marshall said. 

Government committed to independently assess the possibility of methylmercury contamination due to flooding, and is open to clearing large swaths of topsoil to mitigate contamination, if science supports it.

The first phase of flooding began earlier in November, and water levels in the reservoir are now at 22 metres, enough to prepare the site for winter.

The plan is to reduce the water levels in the spring, and decide whether or not to clear the topsoil. Marshall believes further study will not support topsoil removal.

"Topsoil clearing has never been done," said Marshall. "It could have significant environmental impacts. My personal opinion is that it won't happen."

Labrador artist Stan Nochasak at a Muskrat Falls demonstration on the steps of the Confederation Building in St. John's on Oct. 25. (Paul Daly/Canadian Press)

Capital expenditures during the third quarter, not including the Maritime Link, were approximately $2 billion, an increase of $271.5 million over the same quarter last year.

Total assets also increased, growing $1.4 billion throughout the quarter to $13.7 billion.

Nalcor will be helped by an additional $2.9 billion increase in loan guarantees by the federal government for the Muskrat Falls project, following an announcement earlier this month from Ottawa.

"We remain committed to executing the construction of the project in an effective and responsible manner in the interest of ratepayers and all residents of Newfoundland and Labrador," Marshall said.

Open book

Auditor General Terry Paddon plans to take a closer look at Nalcor's operations, which could include the Muskrat Falls project, and Marshall said the door is open.

"We will give him full cooperation. Anything he wants to see we will provide to him so there's no issue there." 

With files from Carolyn Stokes

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