Orimulsion issue a closed chapter, says N.B. premier

New Brunswick Premier Shawn Graham says a failed multimillion-dollar fuel deal between NB Power and the Venezuelan government is a closed chapter in the province's history.

Thedeal wasdubbed the"Orimulsion fiasco" by the Liberals during the 2006 election campaign, with Liberal Leader Graham promising an inquiry into what went wrong.

Last week, the utility announced it had reached an out-of-court settlement, with Venezuela agreeing to pay NB Power $338 million, andGraham announcedThursday there would not be an inquiry.

"This chapter has now been closed in the Orimulsion saga," Graham said. "We felt it's important now to move to the future. Clearly when we looked at the government's process, and I'm not here to lay blame on the past administration, but the downfall occurred not in the actual governance process, but in communications between government and the Crown corporation. Well, today we've fixed that."

NB Power said it had signed a supply contract with a Venezuelan government-owned fuel company in 2004 to buy inexpensive Orimulsion fuel. Venezuela then stopped selling the fuel, causing the deal to fall through, but not before $700 million was spent to refurbish the Coleson Cove generating station to burn the bitumen-based fuel.

Lawyer and prominent NB Power critic Rod Gillis said this week the province should call a judicial inquiry to ensure such an expensive loss isn't sustained by the province again.

"If there aren't some guidelines to the utility in how to run itself put down by some external review, I'm afraid we might have the same problem all over again," he said.

Graham said the settlement has allowed the government to offset some of the cost of refurbishing Colsen Cove, and it's allowed the government toreduce a proposed power rate hike.