I have just received a response to my access to information request concerning the North Spur stabilisation plan. The response to my request can be found here and here.

The North Spur is a ridge that acts as a natural dam on the Churchill river and is an integral part of the Muskrat Falls project. The North Spur contains sensitive clay that can liquify under stress and cause landslides. Some have alleged that Nalcor has not done enough to ensure the stability of the North Spur, with potentially catastrophic consequences.

An expert on quick clay landslides, Dr. Stig Bernander, recently gave two lectures in St. John's outlining what he considers to be deficiencies in Nalcor's analysis of the North Spur stabilisation plan. In particular, he argued that a method of analysis that he developed for assessing the risk of "downhill progressive failure" ought to be performed.

I attended both of Bernander's lectures and found them quite interesting, but also frustrating. Frustrating because Bernander based his criticisms solely on publicly available documents and appears not to have sought additional clarification from Nalcor. Frustrating also because Nalcor has chosen not to respond to Bernander's allegations by releasing the relevant documents.

After Bernander's lectures, I submitted an access to information request to Nalcor for documents I hoped would clear up the matter. Specifically I asked for:

The review of "geotechnical assessments and dynamic studies" of the North Spur stabilization project by Dr. Serge Leroueil. This review is referred to by the Independent Engineer in the "Lower Churchill Project Site Visit Report" dated October 20, 2014.

Dr. Leroueil is an internationally renowned expert on sensitive soils and was specifically recognised as such by Dr. Bernander during his lecture. The response to my request can be found here and here.

To summarise: I received two (minimally redacted) letters signed by Leroueil and addressed to the lead geotechnical engineer for the project, M. Regis Bouchard. The first letter, dated August 24th 2014, is a review of an engineering report on the North Spur Stabilization Works. Leroueil considered that report to be satisfactory. The key excerpt is the following:

... I would add that the stabilization works increase the factor of safety from about 1.0 to about 1.6, which is very significant. Also, by doing that the maximum shear stresses in the soil mass have been significantly reduced, eliminating the possibility of progressive failure in the sensitive clays.

Concerning the North Spur, my opinion is the following. 

There is no established methodology for assessing stability against "downhill progressive failure". Bernander offers a very artisanal methodology that, to my knowledge, has only been used for the analysis of existing fractures, for which the results were known in advance. Ariane Locat has adapted this method for "uphill progressive failures" which has been used to understand two spreads in sensitive clays. In my view, starting to do these calculations will lead to lots of pitfalls and questions. 

On the other hand, the method of analysis consists of defining the initial shear stress along a potential failure surface, probably approximately horizontal and passing through the foot of the slope in our case. This shear stress is maximum at virtually the crest of the slope. If a disturbance increases the shear stress in some location up to the shear strength of the soil, then a progressive failure can begin and eventually lead to a global rupture. There are two important things in what I just said : 

1. The initial shear stress. If you show that you have improved the stability of the slope (higher F), it means that you have reduced your initial shear stress and you move away from the shear strength of the soil. 

2. Disturbance that can locally increase the shear stress. This disturbance may come from the bottom or top. In Quebec, the disturbance is usually an erosion or a small break at the foot of the slope. But as you have protected your foot slope, you have removed the possibility of  disturbance at the foot of the slope. The disturbance may also come from the top, like the pile shaft sinking in the case of Surte studied by Bernander. And there, it must be shown that you have taken all precautions to prevent all disruption at the foot of the slope. 

If you improve your stability, thus reducing the possibility of progressive failure compared to what it was, and if you prevent any disturbance, you can not have progressive failure. I think this is how one must address the problem.

The good news: Nalcor finally came through with some concrete numbers on the new rate projection.

 The bad news: they are worse than previously reported.

Here is the updated rate projections sent to me by a Nalcor representative (a member of the Nalcor "social media team").

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"When Muskrat Falls comes into service that's (a monthly power bill increase of) on average about 8 dollar per month to maybe as high as 28 dollars per month - depending on your usage factor - over what was projected at sanction for monthly electricity rates. Once again that depends - the range depends on how much electricity the person uses."

I believe that Martin explained this incorrectly. It does not make sense to offer such a wide range as an average,  but it does make sense to say that the average bill increase varies between $8 and $28 over the projected time period. This interpretation is in keeping with Martin's letter to the Telegram which (misleadingly) only offers a direct comparison to DG3 for 2018.

Press reports from the CBC (here and here) only provide the $8 figure and the Telegram report does not include any rate projection so this story has not been properly explained to the public.

It is interesting to compare the new projections with the DG3 projections for the isolated island option.

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result in a $8 higher monthly power bill for the "average" customer.  I
would like to see the analysis that derived the $8 figure from the new

"I understand that Nalcor is estimating that the new cost estimates will result in a $8 higher monthly power bill for the "average" customer.  I would like to see the analysis that derived the $8 figure from the new cost estimates.  Is that possible?"

The email is a bit short on details. I would have liked to see how the burden is spread between residential users vs. industrial users, what the projected customer rate is in future years, and how the various parameters (projected fuel cost, interest rates, etc.) have changed since DG3. I think this email clarifies matters a little bit though.

An excerpt from George Orwell's "Down and Out in Paris and London".

It is worth saying something about the social position of beggars, for when one has consorted with them, and found that they are ordinary human beings, one cannot help being struck by the curious attitude that society takes towards them. People seem to feel that there is some essential difference between beggars and ordinary 'working' men. They are a race apart--outcasts, like criminals and prostitutes. Working men 'work', beggars do not 'work'; they are parasites, worthless in their very nature. It is taken for granted that a beggar does not 'earn' his living, as a bricklayer or a literary critic 'earns' his. He is a mere social excrescence, tolerated because we live in a humane age, but essentially despicable. 

Yet if one looks closely one sees that there is no essential difference between a beggar's livelihood and that of numberless respectable people. Beggars do not work, it is said; but, then, what is work? A navvy works by swinging a pick. An accountant works by adding up figures. A beggar works by standing out of doors in all weathers and getting varicose veins, chronic bronchitis, etc. It is a trade like any other; quite useless, of course--but, then, many reputable trades are quite useless. And as a social type a beggar compares well with scores of others. He is honest compared with the sellers of most patent medicines, high-minded compared with a Sunday newspaper proprietor, amiable compared with a hire-purchase tout--in short, a parasite, but a fairly harmless parasite. He seldom extracts more than a bare living from the community, and, what should justify him according to our ethical ideas, he pays for it over and over in suffering. I do not think there is anything about a beggar that sets him in a different class from other people, or gives most modern men the right to despise him. 

Then the question arises, Why are beggars despised?--for they are despised, universally. I believe it is for the simple reason that they fail to earn a decent living. In practice nobody cares whether work is useful or useless, productive or parasitic; the sole thing demanded is that it shall be profitable. In all the modern talk about energy, efficiency, social service and the rest of it, what meaning is there except 'Get money, get it legally, and get a lot of it'? Money has become the grand test of virtue. By this test beggars fail, and for this they are despised. If one could earn even ten pounds a week at begging, it would become a respectable profession immediately. A beggar, looked at realistically, is simply a businessman, getting his living, like other businessmen, in the way that comes to hand. He has not, more than most modern people, sold his honour; he has merely made the mistake of choosing a trade at which it is impossible to grow rich.

I have collected below some documents related to the Humber Valley Paving scandal for the convenience of those following the controversy.

Attached/enclosed is the requested information.

1) History of Relationship with Humber Valley Paving
The Department of Transportation and Works has had a long-standing relationship with Humber Valley Paving that dates back to 1996. In 2007, the company changed ownership and was purchased by a number of investors, which included Mr. Frank Coleman.  It is our understanding that Mr. Coleman has recently sold his shares and is no longer a shareholder.

Attached is a complete listing of all projects where Humber Valley Paving was the successful proponent.  In all cases a public tendering process was used and the company was the lowest compliant bidder.

For your reference, there has been approximately $1.2 billion invested in highway/road improvement initiatives since 2007.


2) Background Information
Enclosed is additional information on the scope of work completed by Humber Valley Paving, as well as background information on the bond.

Under the contract to construct and pave 80 kilometers of highway between Happy Valley-Goose Bay and Churchill Falls, 60 per cent of the work was completed.  The company was only paid for the work completed.  They were not paid for work remaining to be done.

Included in the $11.8 million paid to Humber Valley Paving is the following:
- 106,000 tonnes of “Class A” gravel out of a total of 146,000 tonnes
- 30,000 tonnes of “Class  A” was manufactured and ready to place
- 444,000 tonnes of “Class B” gravel out of a total of 508,000 tonnes
- 40,000 tonnes of “Class B” was manufactured and ready to place
- 15,900 tonnes of asphalt out of a total of 73,700 tonnes
- 935 tonnes of liquid asphalt out of a total of 4500 tonnes
- 3500 meters of guide rail, which exceeded the estimated 3300 meters
- 5,000 flag person hours out of a total of 10,000 hours
- 12,800 meters of guide rail adjustment out of 14,000 meters

Bonds

There was no money to refund.   Bonds are in essence an insurance policy and are called when a contractor fails to meet the requirements of the contract – most often due to a bankruptcy.  In order to call on a bond, the contractor would have to be declared in default of the contract. That said, there is no guarantee that the Provincial Government would recover the entire amount of the bonds that are in place.  Also, the Provincial Government is still responsible for all costs up to the value of the original contract.

The Provincial Government could have called the bonds.  If we had, project timelines and the viability of the company may have been jeopardized.  It would have also likely led to the loss of direct and indirect jobs and potentially contribute to weakening industry and taking a competitor out of the provincial marketplace.

Instead, the Provincial Government opted to relieve Humber Valley Paving of its remaining obligations and re-tender the work as part of another major tender involving 80 kilometers of paving between Happy Valley-Goose Bay and Cartwright Junction.  By taking this approach, we are ensuring a competitive bid process and the project being completed on time and on budget.

The original tender scheduled for the completion of this road work for July 31, 2014 and that target is now August 31, 2014.
"

Brad Cabana made an important observation on Twitter today.  It appears that Gene Coleman and Nick McGrath were in violation of the "Lobbyist Registration Act" when the controversial deal with Humber Valley Paving was being negotiated.  Here are the relevant parts of the Act:

 2. (c) (xvi) In this Act, "lobby " means to communicate with a public-office holder for remuneration or other gain, reward or benefit, in an attempt to influence public-office holders relating to the terms of a contract, the choice of a contractor, or the administration, implementation or enforcement of a contract.

2. (f) (i) "public-office holder" includes a member or an officer of the House of Assembly

6. (1)  In this section, 

(a)  "employee " includes an officer who is compensated for the performance of his or her duties; 

(b)  "in-house lobbyist" means a person who is employed by an organization   

(ii)  a part of whose duties as an employee is to lobby on behalf of that organization if the employee's duties to lobby together with the duties of other employees to lobby would constitute 20 % of time at work of one full time employee, assessed in a 3 month period, were those duties to lobby to be performed by only one employee; 

19. A consultant lobbyist or in-house lobbyist shall not lobby a public-office holder unless that person is registered in the registry of lobbyists with respect to those lobbying activities. 

Since McGrath has publicly admitted to verbally discussing the termination of the contract with Coleman, this clearly fits the definition of "lobbying".  I guess it is possible that HVP does so little lobbying that it wouldn't count as 20% of the time of one employee, but that seems unlikely.  I have not been able to check the registry of lobbyists myself (my browser is incompatible) but I am told that Coleman does not appear.

Here are the penalties.  It looks as though HVP might be forced to pay their bond penalty after all (see (6)).

31.  (1)  Every person who fails to comply with a provision of this Act is guilty of an offence. 

(5)  A person who is guilty of an offence under this section is liable on summary conviction, for a first offence, to a fine of not more than $25,000 and, for a second or subsequent offence, to a fine of not more than $100,000. 

(6)  In addition to the penalty referred to in subsection (5), the court may, where a person is guilty of an offence under this section, confiscate the proceeds of lobbying which were improperly obtained and direct that those proceeds be paid into the Consolidated Revenue Fund.

A few days ago, Peter Cowan of CBC broke a story about how Humber Valley Paving - a company closely linked to future Premier Frank Coleman - was allowed to cancel a multi-million dollar contract to pave a section of the Trans-Labrador Highway without paying any penalty.  I have prepared below a timeline of events linked to this story. We will continue to update as more details of this story emerge.

January 22: Dunderdale steps down as Premier.

February 10: Danny Williams publicly opposes Bill Barry for PC leader and mischaracterises the contents of letter Barry sent to caucus. (link).

February 14: Rumours circulate that Coleman is being courted by Williams to become PC leader. (link)

February 14: Coleman sells HVP, steps down as CEO (link, link).

March 10: Coleman steps down as a director of HVP (link).


March 13 evening (the same day!): Coleman announces he will enter the PC leadership race. Shortly after this announcement, both Steve Kent and Shawn Skinner announce they will not run.  (link)

March 14 noon: Nominations close for PC leadership race. Commentators widely agree that Coleman is almost certain to win the leadership and hence to become the next Premier.

March 21: The request to cancel the contract is granted. HVP gets paid $12M for road preparations and paving only 20km out of the 80km of what was required and have both their $9.5M performance bond and $9.5M labour/materials bond returned without any penalty. At this time three members of Coleman family, including his son Gene, were directors of the company and had an ownership stake in the company. (link, link). It was later revealed the Frank Coleman would have been personally liable to the bonding agency if the bonds had been pulled (link). This contradicts earlier statements by Coleman:

"No, I did not benefit personally from this whatsoever. It is incomprehensible to me that somebody could infer that I benefitted personally from this."(link)

April 20:  The 30 day period for sub-contractors to file a "mechanics lien" against HVP expires. Sub-contractors owed money who failed to file a lien will henceforth be forced to sue HVP in court. (link)
April 25: HVP shareholders release letter saying that "Mr. Frank Coleman and/ or members of his immediate family have no further interest in the ownership structure of Humber Group." (link)

As of April 31: Frank's relatives (grand children, nephews?), Michael and Robert Coleman are the sole directors of HVP. His son, Gene Coleman, is rumoured to have stepped down on April 28th. (link)

June 11: McGrath holds a press conference announcing the result of the retendering of the HVP contract.  McGrath claims that accounting for changes in project specs, cost to the taxpayers have risen by $1.5M. Ignoring specs, the cost has risen more than $2.5M. (link)

June 16: Frank Coleman quits the leadership "race" due to unspecified family issues. (link)

This would link these units directly the neighbourhood schools (Holy Heart, Brother Rice, Bonaventure), and the number 15 bus route leading to MUN/HSC and Quidi Vidi. It would also connect with an existing trail system leading to Churchill Square and provide a pedestrian short cut between Georgetown and Rabbittown.

These routes are already being used by walkers, even though this means clambering over snowbanks. Here are a few pictures of what pedestrians have to contend with to use these shortcuts.

Population growth projections have recently emerged as a controversy. The Conference Board of Canada released a projection that the population of the province will drop to 482,000 in 2035.  Danny Williams declared the projection "bullshit" and city councillor Tom Hann also voiced criticism.

For fun, I decided to do my own projections using a very simple model under a few different scenarios.  In the models below, I assume:

1. Every person dies on their 80th birthday.*
2. There is an equal number of males and females in each age group.

* To be consistent I ignore everyone currently over 80 years old, so my population in 2013 is 507,000 instead of the actual 527,000.  This makes no difference to the projections, because 80 year olds don't have children.

Here is the chart.  The scenarios are explained below.

Check out this call out for an event happening this weekend, September 28-29.

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