Newspaper article The Canadian Press

New Deal Hikes Costs at Troubled Muskrat Falls Hydro Project to Almost $11.7B

Newspaper article The Canadian Press

New Deal Hikes Costs at Troubled Muskrat Falls Hydro Project to Almost $11.7B

Article excerpt

Costs up again for Muskrat Falls project

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ST. JOHN'S, N.L. - Costs continue to soar at the delayed Muskrat Falls hydro project in Labrador as a new contract to settle construction disputes will drive the price tag to almost $11.7 billion.

Stan Marshall, CEO of Crown corporation Nalcor Energy, said Wednesday the new deal with contractor Astaldi to finish the powerhouse and intake near Happy Valley-Goose Bay is now worth just over $1.8 billion.

That's up from the original Astaldi deal of just over $1 billion. And Marshall said he can't rule out more increases.

"We're still exposed for this winter," he said of a leaking coffer dam and protests in October over potential methylmercury contamination.

Marshall blamed both factors for delays that derailed installation of an ice boom meant to protect the flood gates and other concrete structures from damage.

"While we've done everything we can to protect the site, I mean, if we have a catastrophic inundation of the site this winter then all bets are off," he told a media conference call.

Marshall confirmed last June that costs had jumped to about $11.4 billion with financing, up almost $4 billion since the former Progressive Conservative government sanctioned the project four years ago.

He says that estimate included much of the extra costs anticipated for the new Astaldi deal. The agreement to be finalized next month will add $270 million, bringing the total to almost $11.7 billion.

Muskrat Falls is a joint venture with Nova Scotia utility Emera to bring power to Newfoundland and then on to Nova Scotia using subsea cables. It is not expected to fully function until 2020, about two years behind schedule, with first power in 2019.

Marshall took over as Nalcor CEO last April after the new Liberal government criticized Muskrat Falls oversight. He has agreed the project is a "boondoggle" but says he's steering it back on course, starting with the Astaldi contract that pays out as work is done.

"There's no avenue we could have taken which would have reduced our risk and given as much certainty as the path we've now chosen," he said Wednesday.

Marshall has also repeatedly said that with more than $7 billion spent or contractually committed there's no turning back. …

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