Muskrat leader defends St. John's-centric management style; blames Astaldi for overruns

A senior and long-serving member of the Muskrat Falls leadership team strongly defended the model used to manage the project Tuesday, and in the process blamed a big and very familiar contractor for massive cost and schedule overruns on the controversial project.

Independent contractor Ron Power has been involved with the Lower Churchill Project at the very highest levels for more than 11 years.

He served as the general project manager prior to an organizational shakeup at Nalcor Energy in 2016, with the authority to approve spending of up to $25 million. He now serves as deputy project director for generation, with spending authority up to $2 million.

Terry Roberts/CBC

He took the witness stand Tuesday for the first of two days of testimony before inquiry commissioner Richard LeBlanc, under questioning from inquiry co-counsel Irene Muzychka.

And he served notice very early that he was fully prepared to defend his role in the project, and lay blame where he felt it belonged — namely, Astaldi, the contractor awarded the most critical contract on the project: the powerhouse and related concrete infrastructure.

When challenged by Muzychka about billions in cost overruns and schedule delays, Power said the issue had nothing to do with Nalcor's site team.

"That had to do with Astaldi's struggle to perform," he said.

Power said Astaldi failed to bring the experienced team of experts it promised, failed to deliver on its commitment to construct a complex construction dome over the generation site to allow year-round construction, and failed to live up to a contract that Power admitted was very aggressive.

'To the detriment of the project'

"We had a very large international hydro constructor who are saying, 'We can meet the milestones,'" said Power.

"So you took them at their word?" asked Muzychka.

"Yeah, I guess we did," Power replied.

Recent testimony at the inquiry has zeroed in on the model used by Nalcor to manage the project — specifically, the strategy of making all expenditure decisions at the project headquarters in St. John's, more than 1,000 kilometres away from the generation facility in central Labrador, on the Churchill River.

There's evidence that some site managers disagreed with this approach, saying it stripped them of decision-making and their ability to react quickly to challenges, and added another layer of bureaucracy that "is to the detriment of the project and the people of the province," wrote one site manager who quit out of frustration in 2017.

'We did the right things'

"In all my years in construction, the field team ran the construction site and the head office supported the field team. On Muskrat Falls, it is vice-versa," John Mulcahy wrote in his resignation letter.

"It cannot be micromanaged from head office," he added.

Witnesses from Astaldi, including project manager Don Delarosbil, have also complained about Nalcor's management approach, and SNC Lavalin, the Quebec engineering and construction company that has a frosty relationship with Nalcor, also cited a "lack of proper delegation of authority" as a risk to the project.

Power disregarded the criticism, saying it was common for major projects to be managed from the home office, and for site managers to focus on issues like construction and safety.

"We did the right things," Power said of a system that required any extra expenditures to be approved by the project team in St. John's.

If we had to move the whole project management team to the site, you'd have twice as many people. - Ron Power

Some site managers quit in frustration over the policy, saying their authority had been undermined and the approach was vastly different from what they had encountered on other major projects.

But Power criticized the inquiry for hearing only one side of the story. He listed off the names of multiple site managers who were not called as witnesses.

"You won't hear those sentiments from them. And they're the people who built it," Power said.

Moving the project management team to Muskrat would also have driven up costs, he added, since crews at the remote construction site worked on rotational shifts of 14 days.

He said managers worked five days a week, and are available on weekends.

"If we had to move the whole project management team to the site, you'd have twice as many people. And every person, and in particular managers and engineers, over the life of a project is two or three million dollars," he said.

Astaldi seeking millions in claims

Power once again went on the attack against Astaldi, which was evicted from the Muskrat site last year after the company encountered serious financial trouble.

Power said Delarosbil's criticism is related to the fact that Astaldi is trying to squeeze hundreds of millions more in payments out of Nalcor through an arbitration claim.

"They've already been paid over a billion, which is their original contract. They've been paid seven hundred or eight hundred million more with the deals that have been struck since the original contract for the same scope of work. So this inquiry has heard from five or six people with that view, and that contractor (Astaldi) who's trying to get $800 million out of this province, with that view," said Power.

And in praising Astaldi's successor, Power also revealed the contract value for Pennecon: $150 million.

Nalcor has previously refused to disclose the amount, citing commercial sensitivity.

When asked later to confirm whether that was the contract amount for Pennecon, Power would only say the figure is an estimate.

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