No love for Marshall plan: How Muskrat project team resisted Stan Marshall's big shakeup

The Muskrat Falls inquiry is revealing more about how Stan Marshall's first big decision as the new CEO of Nalcor three years ago was met with concern and resistance from the team of contractors overseeing construction.

And now it's been learned that one of Marshall's top lieutenants, Gilbert Bennett, was never consulted about a decision to overhaul the construction management strategy.

But Bennett quickly fell in line with his new boss's plan, despite knowing there were risks.

"I would say (Marshall) decided. He more than proposed. He implemented the change and said, 'We're going to bifurcate the project,'" Bennett told inquiry co-counsel Irene Muzychka on Friday.

"He wasn't looking for a lot of advice on this. He had a clear decision. He had rationale. I understood his rationale."

The bifurcation strategy

Marshall arrived at Nalcor in April 2016 at a time of chaos. The project's cost and schedule were spiralling out of control, the board of directors had resigned en masse, and embattled CEO and Muskrat Falls architect Ed Martin had left under a cloud of controversy as a new Liberal government was settling into power.

Marshall had worked a long and notable career with Fortis, and came out of retirement to lead Nalcor.

Prior to Marshall's arrival, Bennett was Nalcor's overall lead on the Muskrat project, with the title vice-president of the Lower Churchill Project.

• Nalcor exec getting over $500K in severance pay

But Marshall had other plans, and one of his first decisions was to split the project into two silos. One team was responsible for completing the Muskrat Falls generating station in Labrador, with Bennett in charge. Another was to oversee transmission, including construction of the Labrador-Island Link from Muskrat to the Avalon Peninsula, with John MacIsaac at the helm.

It reduced Bennett's role, but he did not challenge Marshall's position.

"From my perspective, that decision taken, we're going to implement it and do the best we can," said Bennett.

But the idea went over like a lead balloon among many on the project team, which comprises a group of major project construction experts — most of whom came from the oil and gas industry — and hired as independent consults.

The most resistance came from Paul Harrington, who was the overall project director, and had by that time spent a decade in charge of construction.

Like Bennett, Harrington was stripped of his responsibility for transmission, though Harrington's reaction was much different.

Harrington fired off strongly worded letters to Marshall and others, suggesting bifurcation was a risky move that threatened to increase costs even more, and drive away some key members of the team.

'Consequences … not fully appreciated'

Harrington also lobbied to remain in charge of the overall construction effort.

"I feel the implications, consequences and increased risk to both project cost and schedule may not be fully appreciated," Harrington wrote in a June 2016 letter to Marshall.

Harrington, using his personal email account, also emailed Nik Argirov, the independent engineer keeping an eye on the project for the federal government, which had signed a $5-billion loan guarantee for Nalcor.

Complaining that he wasn't consulted about the reorganization, Harrington said the project team was "disheartened and demotivated as a result of the lack of respect" shown to him and others.

Harrington said he worried about the impacts of bifurcation, and called the move "a sad day," and again stressed that it would likely add more costs to the project.

But Marshall was not deterred, and went ahead with the shakeup.

There were several departures from the project team, but not the mass exodus Harrington feared, and progress on the project has now reached roughly 97 per cent completion, with the construction cost remaining unchanged at $10.1 billion for the past two years.

What's more, the chair of Nalcor's board of directors, Brendan Paddick, described Marshall's performance to the inquiry recently as "exemplary." Paddick also credited Marshall for "putting a jump" back into the step of the project team.

When asked if he shared Harrington's concerns back in 2016, Bennett said he understood there were both risks and opportunities, and "I was comfortable with where we were going."

And how did Bennett feel about Harrington going over his head with a letter to Marshall, and also complaining to Argirov, who was outside the Nalcor team?

Bennett initially said, "I don't see a problem with that conversation happening," but when Commissioner Richard LeBlanc asked Bennett whether Harrington's objections might not be in Nalcor's best interest, Bennett changed his tune.

"I don't think it helped the conversation," Bennett said, before adding, "I don't think (the) communication is helpful."

Meanwhile, Bennett is scheduled to provide three full days of testimony before the inquiry, while Marshall will testify June 28 and July 2-3.

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