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Cost risk of Muskrat Falls project was well known, former manager says

Jason Kean at the Muskrat Falls Inquiry on Tuesday.
Jason Kean at the Muskrat Falls Inquiry on Tuesday. - Joe Gibbons

Representatives for Astaldi to take the stand at inquiry today, Thursday

ST. JOHN'S, N.L. —

The former deputy general project manager for the Muskrat Falls project, Jason Kean, finished on the witness stand at the Muskrat Falls Inquiry Tuesday, but not before covering a fair bit of ground.

Kean spoke about the assessment and communication of project forecasts, efforts to keep contractors on track, overruns on the Labrador-Island Link and more.

Risk known by Nalcor executives

Kean said the project team didn’t keep its cost and schedule forecasts to itself and communicated them clearly up the chain. But their reach stopped at the Nalcor executive level, including vice-president Gilbert Bennett and president and CEO Ed Martin (later Stan Marshall).

Lawyer Justin King — representing a collection of elected members of the former Progressive Conservative government (apart from former premier Kathy Dunderdale) — asked Kean about reporting up the chain. He specifically asked about a comment in evidence from Kean, saying the risk of moving beyond the $6.2-billion price tag was “well known and communicated” by the time of sanctioning. Kean said he could speak only to the Nalcor Energy project team’s communication to Nalcor Energy executives, but could not say what the provincial government members knew or didn’t know.

Push for a power line

Kean was asked about the Labrador-Island Link and Stan Marshall’s approach after taking over as president and CEO of Nalcor in April 2016.

Marshall changed the project’s management layout, splitting it into a generation team and a transmission team.

“I guess with the (split) it was really a hard push to have the lines and have the power coming from Churchill Falls before the end of 2017. And it was, as I understood it, at any cost,” Kean said.

Workers install a tower during construction of the Labrador-Island link.
Workers install a tower during construction of the Labrador-Island link.

Getting the link up and running for the worst of the winter would make new power available to the island system and help to reduce the cost tied to fuel use at the Holyrood Thermal Generating Station. Kean departed the project in January 2017, but the power line was ready later that year.

Unfamiliar risk assessment

Kean was asked for the second day in a row about the assessment of project risks, produced by SNC-Lavalin in 2013.

He has testified he was told about some kind of risk review at the time, but didn’t see the report from SNC before it came up in the news in 2017, when then-CEO Marshall obtained it and provided it to Liberal Premier Dwight Ball, who then made it public.

The SNC-Lavalin review was undertaken independently, Kean said, while the project team relied on Westney Consulting for help in assessing risk.

He was asked a series of questions by inquiry co-counsel Irene Muzychka, trying to establish if risks identified by SNC-Lavalin had been considered by Westney and the Nalcor project team.

He was also asked about testimony from SNC-Lavalin’s Normand Béchard saying Kean had been offered a copy of the report.

Kean said that‘s not something he recalls.

Geotechnical investigation

Previous testimony and internal documents suggest Nalcor Energy was of the understanding further testing of ground conditions along the planned route of the Labrador-Island Link wasn’t possible without entering into an environmental assessment process.

But doubt has been cast on what could have been done, after a written response to questions from Department of Justice lawyer Peter Ralph to the Department of Municipal Affairs and Environment, now in evidence.

The reply to questions posed by Ralph suggests Nalcor didn’t try to pursue further investigative work or even discuss it with the Department of Environment.

“Should Nalcor have identified the need to conduct testing before the release of the Labrador-Island Link Transmission Project from environmental assessment, the department could have considered the request,” reads the letter from deputy minister Jamie Chippett.

Theoretically, further investigative work could have avoided some of the changes to the line and cost increases during construction.

Kean wasn’t the point man on the environmental assessment, so the subject is likely to be raised again.

Digital records an issue

Kean faced questions at the start of Tuesday’s hearing about how much he did or didn’t communicate with other Nalcor Energy project team members using text messages as opposed to emails or in person, and how much of that messaging he saved and since offered to the Inquiry.

Kean said he personally doesn’t keep text messages, that they are automatically deleted every 30 days from his phone, because he isn’t interested in paying for Cloud storage.

Kean did not work directly for Nalcor Energy on the project. He was a third-party contractor through his own company, and the texts were on his own cellphone as opposed to one issued by Nalcor.

“I have used my phone for various third parties,” he said. “It’s a business phone.”

Inquiry co-counsel Muzychka suggested summons issued to others from the Muskrat Falls project team have resulted in the production of large volumes of text messages for review.

It raises the question of what should reasonably be expected when it comes to archives of government and government contractor communications.

On Wednesday and Thursday, the Inquiry is set to hear more about the work of Astaldi Canada, from witnesses Don Delarosbil, Georges Bader and Mauro Palumbo.

Twitter: @TeleFitz


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