[ISL] "Muskrat Falls has become a millstone around Newfoundland's neck"

[rfmcdonald]

The Globe and Mail's Konrad Yakabuski writes about the huge unanticipated costs of a hydroelectric project weighing down on a depressed Newfoundland.

By his own admission, former Newfoundland and Labrador premier Danny Williams entered politics in 2001 to turn his proverbially have-not province into the master of its own destiny.

For too long, Newfoundland had sat angrily by while its fishery resources were dilapidated by the federal government and the benefits of its vast hydroelectric potential, including the massive Upper Churchill generating station, accrued almost entirely to Quebec.

“After years of watching in frustration as opportunities for growth were missed, lost or mismanaged, I had enough,” Mr. Williams said in a speech this April. “From the fishery to the Upper Churchill, I was determined to change our path in the history books.”

It seemed to work out for a while. An oil boom and a deal with Ottawa on the province’s offshore resources enabled Newfoundland to move off the equalization rolls for the first time in 2007. And Mr. Williams capped off his premiership in 2010 by launching a $6.2-billion hydro project on the Lower Churchill River, free of what he called “the geographic stranglehold of Quebec.”

Newfoundlanders, it seemed, were indeed becoming masters in their own house.

Well, the oil boom has gone bust, driving the province’s public finances to the bottom of the Canadian heap, and the projected cost of the 824-megawatt Muskrat Falls hydro project now under construction on the Lower Churchill has been revised skyward to a staggering $11.4-billion. Muskrat Falls has become a millstone around the neck of an already down province.