Premier's lawyer on defensive as Muskrat Falls inquiry wraps hearings

A sweeping inquiry into the controversial,over-budget Muskrat Falls hydro dam concluded its hearings Thursdaywith the commissioner asking pointed questions about Premier DwightBall's commitment to limiting methylmercury contamination.

The independent inquiry, led by provincial Supreme Court JusticeRichard LeBlanc, is looking into cost and schedule overruns of the$12.7-billion dam on the Lower Churchill River.

Peter O'Flaherty, a lawyer for Premier Dwight Ball, was among thelast to speak Thursday, reiterating the premier's position that hisLiberal government had no choice but to finish the project afterbeing elected in 2015.

O'Flaherty also addressed ongoing scrutiny as to why Ball's government failed to approve work that would mitigate the impacts of methylmercury contamination in food sources downstream from the reservoir, which is currently being flooded.

He maintained that the premier wanted the work, known as capping, to get done but was unaware that time had run out to complete the capping without the whole project falling further behind schedule.

LeBlanc asked O'Flaherty why it took so long for the government to act.

"Clearly the political fallout is very negative," the judgesaid. "This is an item that was of significance to the premier, andyet it didn't happen. It's a bit confounding."

O'Flaherty said approving a work permit for the capping fell to the environment minister and that it would be unfair to attribute motives.

The exchange in Happy Valley-Goose Bay came at the end of a weekof final submissions from lawyers for politicians, projectexecutives, contractors and interest groups.

The 824-megawatt hydroelectric dam, being developed by the Crown-owned Nalcor Energy, will send power to Newfoundland and later Nova Scotia through subsea cables.

The project, called a "boondoggle" by Nalcor's current CEO, has essentially doubled its costs since it was sanctioned in 2012 and is now years behind schedule.

Hearings began last September, as high-level officials and consultants took the stand, with some evidence suggesting costs were intentionally downplayed.

Political headaches continue

Public sessions of the inquiry may have concluded, but political headaches over the Muskrat Falls project which accounts for one-third of the province's direct and indirect debt are far from over.

Fears that ratepayers will bear the financial burden of theproject through their electricity bills when Muskrat Falls beginsproviding all of Newfoundland's power in 2021 has made rates into apressing issue for the Liberal minority government.

Rate mitigation was the most important item on the agenda when Ball and Prime Minister Justin Trudeau met in St. John's last week, according to the premier. The province has reported it will requireat least $200 million in federal funds to avoid rate hikes.

Muskrat Falls was also cited in a report from Moody's InvestorsService last month in which the agency downgraded the province'scredit rating.

LeBlanc's final report on the inquiry is expected by Dec. 31. Hesaid on Thursday that he intends to meet his tight deadline withoutrequesting an extension.

"The pressure is on, and I'm certainlyfeeling it," he said.