Jerome Kennedy admits to anger after finding out all the facts on Muskrat Falls

Jerome Kennedy admitted Monday to anger and disappointmentafter discovering he wasn't told about some Muskrat Falls costs and timeline issues prior to its sanctioning in 2012 a time when he was publicly drumming up support for the megaproject.

It was an astonishing admission during his testimony at the public inquiry investigating the controversial project, from the man who at thattimewas minister of Natural Resources, the department tasked to oversee government-owned Nalcor Energy.

"Every day I was out there in the public defending a project based on the information that's given to me, by people I have no reason to believe won't give me accurate information," Kennedy testified.

Kennedy learned of these risksduring a meeting with lawyers for the public inquiry in the summer of 2018, and through the findings ofGrant Thornton's forensic and investigative audit of the decision to sanction Muskrat.

I felt surprised. I felt disappointed. I felt a certain degree of anger.- Jerome Kennedy

"When it really hit me sir, was during the interview, when you pointed these things out to me one after the other. I felt surprised. I felt disappointed. I felt a certain degree of anger too, sir," he said.

'Unpleasant meetings'

Kennedy was also unaware that Nalcorwas massaging and editing parts of the independent reviews to remove some commentary that might be critical of the planning, and testified there would have been"unpleasant meetings" if he had known at the time.

When presented with a series of emailsexchanged between Nalcor and government officials in the lead-up to project sanctioning, Kennedy described the dialogue as "totally inappropriate," and added, "I"m bothered by these kinds of emails."

Kennedy added he would have "conversations that would not have been polite" if he had seen the emails, and acknowledged the relationship between Nalcor and government officials in his department was "too close."

'We should have been aware'

Kennedy's testimony isthe latest evidence that politicians and senior bureaucrats were not entirely in the loop when it came to how Nalcor was planning Muskrat Falls.

The fact that an independent risk assessment consultant had recommended Nalcor include a half-billion-dollar strategic risk allowance in its capital costs estimates, for example, was not known for Kennedy.

Anything that increased the cost of Muskrat Falls... is something we should have been aware of.- Jerome Kennedy

"Anything that increased the cost of Muskrat Falls...is something we should have been aware of."

ThatNalcorwas taking a risky approach to its costs and schedules, in defiance of a recommendation to be cautious, was also unknown to Kennedy.

For example, Nalcorswitched from a 75 per cent probability that its cost estimates would be accurateto a 50 per cent probability in 2010.That's despite the fact external consultants were recommending at least a P75rating, which would have added hundreds of millions to the cost estimates.

Nor was he aware that the 2017 schedule for first power was practically impossible to achieve, according to one report that Kennedy never saw.

"This is something that I should have been aware of," Kennedy said in response to questioning from Barry Learmonth, inquiry co-counsel.

Kennedy was a loud supporter of the project during his time in politics, and said he believed in the information being provided by Nalcor.

"I never found Mr. Martin at any time to be misleading me or anyone else," Kennedy said of former Nalcor CEO Ed Martin.

• No lowballing on Muskrat Falls estimates, says former CEO Ed Martin, despite testimony from his deputy

Since it was sanctioning, the cost for Muskrat has soared from an initial estimate of $6.2 billion to an all-in cost of $12.7 billion.

And first power is delayed until at least next year, more than two years behind schedule.

Martin, meanwhile, will testify at the inquiry from Dec.10-14.

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