Project Development Agreement
NCN Ratifies Wuskwatim PDA
The people of the Nisichawayasihk Cree Nation (NCN) of Nelson House gave the green light to the Wuskwatim Generation project in a June 14, 2006 vote. According to media reports, more than 70% of the community's eligible voters turned out to vote, with 62% voting in favour of the deal in the referendum. The official signing of the PDA took place June 26 in Nelson House.
The deal that NCN voted to approve will give the band the opportunity to buy as much as one-third of the generating station and share in one-third of the profits. It will also receive about $100 million in contracts for the construction process (which it will share with joint venture partners) and more than $10 million in training related to the dam.
It requires NCN to invest $1 million immediately. At the end of the six- year construction period - likely about 2012 - NCN will then have to come up with the rest of the money it wants to invest.
In a letter to the editor in the Winnipeg Free Press, Carol Kobliski, Spokesperson for the Justice Seekers of Nelson House criticized Manitoba Hydro and the Manitoba government for only printing 300 copies of the Wuskwatim project development agreement for over 4,000 Nisichawayasihk Cree Nation members to review. (These were not available until almost a month after the announcement of the referendum date.) Ms. Kobliski points out that with inflation, cost to build Wuskwatim will rise. As a partner, NCN will have to cover its debt and no one will guarantee NCN debt payments, while the Manitoba government and taxpayers will cover Manitoba Hydro's debt.
As of June 21, 2006 official referendum results had not been publicly released or posted on the Internet. It was expected that, similar to other elections and referenda, results by day of vote (June 7 & 14), and by polling station (several around Manitoba) would be made available. Concerns regarding past problems with election procedures at NCN prompted the NCN Justice Seekers to request both provincial and federal government supervision of the vote. These requests were also tabled in the Manitoba Legislature on petitions with several hundred signatures. Community members filed appeals of the referendum process, and these were turned down.
Wuskwatim PDA Lacks Financial Information
The Project Development Agreement (PDA) for the Wuskwatim Generation Project between Manitoba Hydro and the Nisichawayasihk Cree Nation (NCN) does not include information required to complete an independent financial review of the agreement and an assessment of the financial implications for the Nisichawayasihk Cree Nation.
In a letter dated June 9, 2006, the firm of Gardner Coombs Windsor Coombs Chartered Accountants indicates that they are "unable to complete a detailed financial review of this nature since the detailed financial assumptions are not included in the information contained on the [March 2006 Wuskwatim PDA] CD." The accountants also list the information that is needed yet not provided in the Wuskwatim PDA.
Gardner Coombs Windsor Coombs Chartered Accountants also state that in order to complete a detailed financial review of the business and potential income and return to NCN as a result of its proposed investment in the Limited Partnership with Manitoba Hydro, detailed assumptions and projected cash flows regarding the Wuskwatim project are required, including:
- projected capital costs
- projected net energy available for sale
- projected revenue assumptions
- projected operation, maintenance and management costs
- projected interest costs
- projected exchange rates
- projected partnership net income each year over the life of the project
- capital to be invested by NCN and how it is to be financed
- projected interest rates on funds borrowed by NCN