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This article was published 21/10/2016 (1433 days ago), so information in it may no longer be current.

Editorial

You have to wonder if Sanford Riley and Kelvin Shepherd have not been paying attention. Mr. Riley, the board chairman of Manitoba Hydro and Mr. Shepherd, its CEO, told a public meeting Tuesday that a major equity injection from the province is one of the things that may need to be considered as the Crown corporation grapples with its debt. Translation: a bailout from the province.

The response on Wednesday from the premier was swift: find some efficiencies first.

BORIS MINKEVICH / WINNIPEG FREE PRESS Manitoba Hydro board chairman Sanford Riley

And so it should be. Premier Brian Pallister has been clear his government is looking at all government departments and Crown corporations to be more efficient and transparent. It was also clear when Mr. Pallister fired the Manitoba Hydro board just days after the April election, putting in place Mr. Riley along with seven other Tory appointees, that things were going to have to change. In fact, the new board members expertise was heavily weighted to senior financial management.

It was also made clear when the minister responsible for Crown corporations put in place plans to sack the civilian oversight board for crowns and replacing them with bureaucrats. Ron Schuler says the board was not doing its job and overhauling how Crown corporations operate makes them more accountable and less prone to political interference. Manitoba Hydro was one of the organizations Mr. Schuler voiced concerns about.

Another concern is Hydro’s tendering practices. Part of the Progressive Conservative’s election promises was an improvement of the tendering process for all government contracts, which potentially could include crowns. Manitoba Hydro had to know this was coming, given it has come under fire for not releasing details on contracts awarded without tender. In particular, a 2014 contract given to Tetra Tech, an engineering management consultancy firm worth up to $85 million over the life of the project was untendered. Hydro refused to provide information on why that firm was given the bid, which was to provide project management for the Keeyask generating station. Keeyask, of course, was one of the projects reviewed by a U.S.-based consulting company indicating that costs are ballooning to as high as $7.8 billion from $6.5 billion.

Mr. Pallister said there were efficiencies to be found in Manitoba Hydro. He may have been looking at the employee compensation report the corporation released earlier this year that showed it paid out more than $13 million last year for banked vacation time, severance payments, unused sick leave and other benefits to employees leaving the company. Another report on executive salaries indicated that outgoing president and CEO Scott Thomson received a gross income of $494,908 in 2015, $121,874 of which was classified as termination/retirement pay.

The writing is on the wall. Mr. Pallister has talked openly about trimming middle-management in government and launched a value-for-money audit. There’s little doubt Manitoba Hydro has a huge target on its back because of the Bipole III debacle and the overruns on Keeyask. Mr. Riley and Mr. Shepherd should have known that any attempt to get help from the province to strengthen its balance sheet was not going to happen. So the question that Mr. Riley and Mr. Shepherd really need to answer for both Hydro’s ratepayers and provincial taxpayers is what were you thinking?