Premier responds to Opposition leader's comments

Premier Beaton Tulk today expressed concern about the information circulated by the Leader of the Opposition earlier today regarding the March 9, 1998 Framework Agreement on hydro resources.

"There are many fundamental misrepresentations of fact in the information presented earlier today by Mr. Byrne. In particular, there are three which I find offensive and inconsistent with the information government has circulated on this important project in the past," the premier noted.

Premier Tulk indicated that the three critical misrepresentations in the release are as follows:

1. Is it true that 130 mw Recall Block and Guaranteed Winter Availability Contract (GWAC) are not worth $2 billion as stated by former Premier Tobin?

No. Contrary to misleading statements from the Opposition, the GWAC and 130 mw recall block sale has netted more than $80 million since 1998, more than double our take under the 1969 power contract. Mr. Byrne is confused between dividends the government has actually drawn down from Newfoundland and Labrador Hydro (NLH) and its take from the sale of GWAC and the 130 mw recall block. From now to 2041, NLH will receive about $1 billion in revenues from each of the 130 mw recall block and the GWAC.

2. Why did NLH only declare a $5 million dividend in 1999?

Dividends taken from Newfoundland and Labrador Hydro are dependent on the needs of government in any fiscal year. For the last number of years, government has only drawn down the funds its needs to make strategic investments that will have a long-term positive impact on the province. It is part of prudent budgeting.

The remaining funds stay with Newfoundland and Labrador Hydro for the benefit of the province. Some of the money has been used to develop the potential of the Lower Churchill resource.

3. The Opposition says the province is not receiving benefits of $70 million from GWAC and recall. Is this true?

The Opposition is wrong. The province is realizing revenues of approximately $30 to $40 million annually. Again, the Opposition is confusing dividends taken by the province from NLH with the actual revenues that NLH receives from recall/GWAC annually. As already noted, the revenue stream from these two agreements runs between $30 to $40 million a year.

"Beyond these concerns, the Opposition has ignored the basic fact that without GWAC, CF(L)Co would start losing money in the near future. Under the 1969 power contract, Hydro Quebec could gain control of CF(L)Co. The CF(L)Co Shareholders' Agreement and GWAC, which was approved by the CF(L)Co board of directors, fixes this problem and does not limit our options in 2016 or 2041, when all of these agreements expire," said the premier.

"I will be asking the president of NLH to release pertinent details of both the GWAC and the CF(L)Co Shareholders Agreement to let the people of Newfoundland and Labrador see for themselves the benefit of these agreements to this province and the benefits we have already received."

Media contact: Paula Dyke, Communications, (709) 729-3960.

2000 11 14 4:45 p.m.