Nfld. & Labrador

No evidence that cost estimates for Muskrat Falls were reviewed, inquiry hears

A co-counsel with the Muskrat Falls inquiry says a search for government reviews of Nalcor cost estimates for the troubled project have so far come up empty.

Lawyer says search has come up empty, but Danny Williams says there was constant review of Nalcor

Barry Learmonth (right) is a co-counsel with the Muskrat Falls public inquiry. He is seen here Monday with former Newfoundland and Labrador premier Danny Williams (centre) and Tommy Williams, who is providing legal counsel to his brother during the inquiry. (Terry Roberts/CBC)

A co-counsel with the Muskrat Falls inquiry says a search for government reviews of Nalcor cost estimates for the troubled project have so far come up empty.

Lawyer Barry Learmonth asked Danny Williams on Tuesday if he had any advice about where to find evidence that various government departments scrutinized the work of Nalcor.

"We've searched for reviews, reports and analysis that may have been prepared …​ and we haven't found anything at all," Learmonth said during discussions with Williams as the former premier concluded two days of testimony before the inquiry.

Former premier Danny William concluded two days of testimony Tuesday at the Muskrat Falls commission of inquiry. (Terry Roberts/CBC)

The public inquiry is trying to find out why costs for the hydroelectric project have swelled by billions of dollars over original estimates, and why it has fallen years behind schedule.

As premier, Williams led the charge to develop Muskrat Falls, culminating with the announcement in November 2010 of a partnership between Nalcor and Emera Inc. of Nova Scotia. The deal was inked just weeks before Williams retired from politics.

Construction costs at that time were estimated at $5 billion, and by the time it was officially sanctioned in 2012 by Williams' successor, Kathy Dunderdale, estimates had climbed to $6.2 billion. Six years later, construction costs have climbed to $10.1 billion.

No evidence of reviews

In testimony earlier this week, Williams said the departments of finance,natural resources, the treasury board and others worked closely with Nalcor as plans were being developed to evaluate and sanction Muskrat Falls.

But Learmonth said there's no evidence that critical reviews of Nalcor's work was done by these departments.

Learmonth said he was unable to find, for example, analysis of what the possible impact of serious cost overruns on the Muskrat Falls project would mean for the province's already fragile financial situation.

Based on what we have found in our investigation, it appears that government simply accepted the review and work and cost estimates provided by Nalcor … without any analysis or review.- Lawyer Barry Learmonth

"Based on what we have found in our investigation, it appears that government simply accepted the review, and work and cost estimates provided by Nalcor … without any analysis or review."

Inquiry commissioner Richard LeBlanc also chimed in, saying, "It is a bit surprising to us that we haven't seen that."

LeBlanc said it's his understanding that when a government department makes plans to spend public money, there is a "fairly rigorous" evaluation on the risks to the province's fiscal situation.

"One thing we haven't found so far is any of that, at least up to November of 2010."

Learmonth was referring to the period up to late 2010, which is when Williams left politics after seven years as premier.

Williams shot back at Learmonth's comments, saying, "I don't think that would be fair comment."

I don't want to leave you with the impression that information came in from Nalcor and it just went right up this clean pipe through government.- Danny Williams

Williams said there was constant review and analysis, and added, "I don't want to leave you with the impression that information came in from Nalcor and it just went right up this clean pipe through government.

"That certainly didn't happen," Williams said.

Williams said the project was highly scrutinized by outside consultants such as Navigant and Manitoba Hydro International, along with the federal government as part of the loan guarantee approved by Ottawa.

Afterwards, Williams again defended the level of scrutiny when talking with reporters.

"There's lots of briefing notes on file. Virtually every government department has looked at this project. As well, Nalcor is a Crown corporation, owned by the people of Newfoundland and Labrador. Nalcor is an extension of government. This has gotten lots of scrutiny so I'm quite comfortable with that."

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About the Author

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