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Homework answers / question archive / From the perspective of Economics, Politics, and the Environment, Muskrat Falls was a Mistake
From the perspective of Economics, Politics, and the Environment, Muskrat Falls was a Mistake. Your paper should explain why you agree or disagree with this statement and an analysis of the evidence that you have used in your assessment. page limit up to 35-40
I agree with this statement
Muskrat Falls was billed as a strategy to meet the electricity needs of the province of Newfoundland and Labrador with environmental friendly, stable and competitively priced power.
More than six years after it was sanctioned, however, the focus now is trying to complete the project without inflicting any more pain on the province.
It's billions over budget, years behind schedule, and the subject of an ongoing commission of inquiry to determine why.
top five reasons why Muskrat Falls, to borrow a word from Nalcor CEO Stan Marshall, is a boondoggle:
1. Nalcor's oilmen left unchecked
A 2007 energy plan shepherded by then-premier Danny Williams identified development of the Lower Churchill as a "cornerstone public policy action."
It's now clear Nalcor's team was given an unrestricted leash by its political masters, including what amounts to a blank cheque from the public treasury, to build the generating station at Muskrat and the transmission lines to Churchill Falls and Newfoundland's Avalon Peninsula.
A parade of government witnesses have testified that they trusted the experts at Nalcor, prompting inquiry co-counsel Barry Learmonth to say government leaders were naive and blindly accepting of everything put before them.
2
2. An unrealistic cost estimate
In the world of major project construction, it's referred to as the capital cost estimate, and for Muskrat, the public was told the bill would be $6.2 billion. The fact there was another $1.2 billion for interest during construction on top of that was not talked about in the early years of the project.
There's now a mountain of evidence proving this original estimate was an impossible target.
3
Nalcor knows better
In 2011, Nalcor hired Quebec engineering and construction management giant SNC-Lavalin to oversee the project. But the relationship quickly turned sour, with Nalcor eventually stripping SNC of its leadership role and establishing what's known as joint-management teams.
4
Astaldi and the failed dome
The word "Astaldi" can be found 182 times in a Grant Thornton audit of the construction phase of the project.
The Italian company was awarded a $1.1-billion contract to build the powerhouse and other concrete structures at Muskrat in late 2013. It's the largest work package on the project, and Astaldi was the lowest bidder.
No geotechnical work on transmission line
Critics have alleged Muskrat was sanctioned without adequate planning, and the problems with the 1,100-kilometre Labrador-Island Link transmission line from Muskrat Falls to the Avalon Peninsula might be the best example.