NEWFOUNDLAND AND LABRADOR
Government Releases EY's Interim Report on the Muskrat Falls Project

The Honourable Siobhan Coady, Minister of Natural Resources, released the interim report from Ernst & Young LLP (EY), which focused on cost, schedule and associated risks for the Muskrat Falls Project. Also released was the Muskrat Falls Oversight Committee's report to the end of December 2015.

"As inheritors of the Muskrat Falls Project, we are committed to opening the books on the project as we have done through our engagement with EY and ensuring it is managed effectively. This large scale construction project is currently facing schedule and cost pressures, particularly in the powerhouse and intake. We are acting in the best interest of the taxpayers of this province and making decisions on this project by implementing EY's recommendations and strengthening project governance."
- The Honourable Dwight Ball, Premier of Newfoundland and Labrador

The interim report informs government about the current material risks and issues that are not reflected in the September 2015 forecast, and provides recommendations to improve project governance. The overall conclusion of the EY review is that the September 2015 forecast is not reasonable.

"We take EY's recommendations seriously and it is our full intention to action them all including strengthening project governance and expanding oversight which we expect to have completed by the end of May. Schedule pressures and expected cost increases on the Muskrat Falls Project concern us all. The project is now being reforecast for cost and schedule. EY will assess the reasonableness of this revised forecast and will then present us with a final report following their review. We will ensure the project is managed effectively within budget from here on."
- The Honourable Siobhan Coady, Minister of Natural Resources

The schedule and cost reforecast for the Labrador Island Transmission Link and Labrador Transmission Asset is expected to be completed by the end of May. One component, the powerhouse and intake as part of the Muskrat Falls Generation, is significantly behind schedule. Nalcor is in discussions with Astaldi, the contractor. The final cost and schedule reforecast will be available once these discussions have concluded.

Key findings and recommendations from EY's interim report are included in the backgrounder.

QUICK FACTS

• The interim report from Ernst & Young LLP (EY) which focused on cost, schedule and associated risks for the Muskrat Falls Project was released and is available at www.gov.nl.ca/MFoversight/.
• Also released was the Muskrat Falls Oversight Committee's report to the end of December 2015 which is available at www.gov.nl.ca/MFoversight/.
• The Provincial Government intends to action all EY recommendations including strengthening project governance and expanding oversight which is expected to be completed by the end of May. The project is now being reforecast for cost and schedule. EY will assess the reasonableness of this revised forecast and will then present a final report following their review.
• The Muskrat Falls Project is a significant economic generator in the construction phase. There were 4,552 Newfoundland and Labrador residents working on the project at peak in 2015 and $1.14 billion in wages paid to Newfoundland and Labrador workers since the start of project construction. In addition, $1.04 billion has been spent with Newfoundland and Labrador-based businesses since the start of construction.