Minister challenges Opposition statements on hydro agreements

Mines and Energy Minister Paul Dicks expressed concern today that Opposition Leader Ed Byrne is continuing to make highly misleading statements about the agreements signed by Newfoundland and Labrador Hydro (NLH) pertaining to CF(L)Co.

"Yesterday, the chairman of Newfoundland and Labrador Hydro provided a detailed briefing and overview of the facts regarding CF(L)Co Shareholders� Agreement and Guaranteed Winter Availability Contract (GWAC)," said the minister. "Despite Mr. Wells� clear presentation and his affirmation that both these agreements were approved by the CF(L)Co board, Mr. Byrne continues to misrepresent and confuse the facts on these agreements."

Minister Dicks pointed to Mr. Byrne�s statement that: �there will be little left over for dividend payments to the province� from GWAC. "This is wrong and contradicts information presented by Mr. Wells. Specifically, Mr. Wells stated: �NLH�s dividends from CF(L)Co, after taking into consideration all of CF(L)Co�s future costs, will amount to $1.3 billion.� This is $1 billion greater than without GWAC. Over and above this amount, $75 million will be set aside within CF(L)Co to cover unforseen future costs."

The minister continued: "I also take exception to Mr. Byrne�s statement that because of the Shareholders� Agreement, �we cannot reorganize our own company without Quebec�s consent; we cannot change it; sell it; look for partners; give it away; abandon it; shut it down; let it run down.� The items to which Mr. Byrne refers cannot be done by a majority shareholder in any corporation, incorporated under the provisions of the Canadian Business Corporations Act.

"Mr. Byrne also stated that the 130 mw recall block�s value to Newfoundland and Labrador expires five months from now and has no life beyond that," said Minister Dicks. "Once again, Mr. Byrne is wrong and is misleading the people of this province. In March 2001, we have the option of renewing the 130 mw recall block arrangement with Hydro Quebec. Discussions on this matter are already well under way and we fully expect the benefits of the arrangement to be equal to or greater than the $68.5 million net profit realized in the first three years of the arrangement."

Minister Dicks commended the management and Board of Directors of Newfoundland and Labrador Hydro and CF(L)Co for their foresight in signing these agreements. "Their sound business decisions have ensured the future viability of CF(L)Co and the result will be $2 billion in new revenues for the benefit of all Newfoundlanders and Labradorians."

Media contact: Gary Callahan, Communications, (709) 729-4890.

2000 11 16    5:10 p.m.