Nalcor chair says board lost confidence of government

The departing chair of NalcorEnergysays his board resigned en masse after it becameclear they no longer held the confidence of Newfoundland and Labrador's new Liberal government.

Ken Marshall and three other Nalcor board members tenderedresignationsWednesday, just hours after the group's CEO, Ed Martin, announced that he was leaving as well.

The resignations come after an EY [formerlyErnst&Young]review found the Muskrat Falls project to be even further behind schedule, and afterNalcor was called out in last week's provincial budget.

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"Quite frankly, from the board's perspective, we took concern over the singling out at the budget process and at the E&Y report," Marshall told the St. John's Morning Show on Thursday.

"We felt that that wasn't necessarily the right approach," he said.

Marshall saidthe government'stough talk in last Thursday'sbudget and Martin's subsequent resignation made it clear the provincial governmentno longer believed in the abilities of the Nalcorboard.

"Everybody individuallyfelt that it was time for us to move forward and allow the organization to establish a new board." Marshall said.

Budget call-out

In her budget speech, Finance Minister Cathy Bennett saidthe province did not see appropriate returns for the investment it is pouring into Nalcor.

"The previous administration allowed Nalcor's organizational structure, compensation and benefits packages to grow beyond what taxpayers would consider reasonable," Bennett said, adding thatthe corporation would be directed to make cutbacks.

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Those comments took his board members by surprise, according to Marshall,especiallyconsidering Bennett served as chair of Nalcor Energy in 2012.

"They were very surprising to the board," Marshall said,"given her knowledge of the board and her knowledge of the what the board was faced with."

Marshall said Bennett"was well aware of the projects that we were entering and the span of anticipated expenditures."

Muskrat Falls is at least $2.5 billionmore expensive than was originallybudgeted, and significantly behind schedule.

Despite his resignation,Marshall defended the project as the right way forward.

"Everybody's concerned. Everybody, to a person, on the board. and every Newfoundlander has a right to be concerned," he said.'But again, these projects, we go through a lot of analysis and try to make sure that we clip the uncertainties and the risks to a certain point."

Bennett said most major construction projects face big challenges.