March 24, 2014
The following statement was given today in the House of Assembly by the Honourable Derrick Dalley, Minister of Natural Resources:
Provincial Government Facilitates Robust Oversight of the Muskrat Falls Project
Mr. Speaker, I rise in this Honourable House today to outline our government’s work in facilitating robust oversight of the Muskrat Falls Project on behalf of the people of Newfoundland and Labrador.
Many senior departmental officials throughout government have been involved in oversight from initial planning, to early engineering, to our agreements with Emera, and most importantly to sanction and financing.
Our government has also ensured that there has been more information made public about this project than any other project in the province’s history, providing the opportunity for review by the public, government, and independent experts including Manitoba Hydro International, Navigant Consulting, the Board of Commissioners of Public Utilities, Dr. Wade Locke, and Ziff Energy Group of Calgary.
In addition to our government’s oversight, the level of external due diligence undertaken by the Government of Canada gave them the confidence and satisfaction in the Muskrat Falls Project prior to issuing a federal loan guarantee to back the $5 billion financing for this development. This effort by Canada was supported by experienced external legal advisors, independent financial advisors, an independent engineer, and an independent insurance consultant, all engaged directly by the Government of Canada.
Furthermore, Nalcor’s board of directors and internal audit department also provide oversight. The Provincial Government requires Nalcor to report regularly through annual transparency and accountability reports and regularly prepares financial statements which are audited by the external independent auditor and integrated into Nalcor’s annual business and financial annual report. Nalcor holds public annual general meetings where the previous year’s performance is discussed.
Prudent oversight of the Muskrat Falls Project is a priority for our government and it will continue through the construction and operation stages of the project.
To strengthen and formalize the existing oversight for the construction phase of the Muskrat Falls Project, a departmental committee of Finance, Natural Resources, and Justice, chaired by the Clerk of the Executive Council, will focus on project costs, scheduling, and overall project performance.
The committee will review information provided by external auditors, the independent engineer and Nalcor; provide updates and discuss issues with relevant departments; meet regularly with Nalcor officials; report to Cabinet, which will provide direction to appropriate ministers as required; and provide quarterly updates to the public starting in July on project costs, scheduling, and project performance.
Also to be initiated and made public by Nalcor this year will be a report specific to the Muskrat Falls Project prepared by Nalcor’s external auditors as part of their annual audit. Nalcor will also issue quarterly consolidated financial statements starting later this year.
This complements Nalcor’s monthly benefit reports currently released publicly which include details on employment, construction and procurement activities; construction costs; safety and environmental activities; stakeholder and community consultation; and engagement initiatives.
It is a priority for our government to ensure information on the Muskrat Falls Project will continue to be made available to the public, while still protecting the commercial interests of the project.
Mr. Speaker, strong oversight of the Muskrat Falls Project continues to be undertaken by the Government of Newfoundland and Labrador, Government of Canada, Nalcor Energy, project lenders, and independent experts. This project will provide the least cost source of electricity for the future and will benefit Newfoundlanders and Labradorians for generations to come. Thank you.
2014 03 24 2:15 p.m.