No decision made on Manitoba Hydro International: CEO

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This article was published 30/09/2020 (2075 days ago), so information in it may no longer be current.

After much speculation and anxiousness from staff about its fate, Manitoba Hydro CEO Jay Grewal publicly stated Wednesday the corporation has made no decision on the future of its subsidiary, Manitoba Hydro International.

Grewal said, “If and when we make any decisions regarding Manitoba Hydro International, we will be sure to communicate that in an open and transparent manner to everyone concerned.”

Opposition parties and staffers say it is too little too late, that they have been kept in the dark for so long that they are skeptical about future transparency.

Concern about the future of MHI arose after it was revealed its 125-person staff received a directive that they were to “not aggressively pursue new work” for the period of Sept. 2 to Oct. 7. (The latter date is a scheduled Manitoba Hydro board meeting).

Wednesday’s release, which was accompanied by a video statement by Grewal, made no reference to that stop-work order and sources say it is still in effect.

In fact, Adrien Sala, the NDP’s Hydro critic said that it might even last longer.

“The stop-sell order is a concern. It is a very telling fact that was not included in the release and it is also our understanding that it has been extended,” he said. “The board was to be discussing the future of MHI at an Oct. 7 board meeting. It is our understanding that has now been delayed until January.”

One MHI staffer told the Free Press, “This message is eight months too late. Jay (Grewal) has been stringing us along since January, when the rumour of her efforts to close MHI first started. Since then, staff have received no assurances or communications from Jay or any of the other Manitoba Hydro executives. In fact, this is the only communication we have received from management about this review, other than being told, without explanation, to halt all sales and business-development activity.”

There was also no confirmation of Manitoba Hydro’s sale of its 40 per cent stake in Teshmont Consultants as was reported this week.

Sala said, “After we revealed Hydro privatized a subsidiary yesterday, Teshmont, this release confirms Pallister is actively looking at privatizing another profitable subsidiary of Hydro.”

He is introducing a private members bill in the coming days that would require some sort of referendum before any subsidiary of Hydro is privatized.

Grewal’s statement also sent out the message that the organization is not making the same level of profit they would have hoped it to make.

Manitoba Hydro released its 2019-20 annual report this week that notes MHI’s revenues declined 8.7 per cent in the past year and 22 per cent since 2017, and Grewal said profits are down 40 per cent over that period.

MHI is an aggregation of a few different operations including a wide-ranging international consultancy, Hydro’s Northern broadband network called Manitoba Hydro Telecom (MHT) and a handful of proprietary software tools and devices.

There has been speculation from industry veterans Manitoba Hydro might have become a reluctant owner of MHI because of a corporate philosophy that views its operations as outside the Crown corporation’s core expertise and also its international operations exposed it to risks that the board may not be comfortable with.

In the release Grewal basically confirmed those misgivings.

She said, “The safety and security risks of operating in developing and emerging markets, where MHI conducts a lot of its operations, have increased significantly. In addition, there is an increasing lack of alignment between MHI’s services and Manitoba Hydro’s core operations as an electrical and natural gas utility.”

Earlier this year MHI put out a request for proposal for third party operation of MHI’s Manitoba Hydro Telecom division ordering it to cease new work and the Free Press reported MHT was recently ordered not to bid on a large piece of provincial government work.

The MHT stop-work order has already caused a number of small Manitoba internet service providers to shift work and may have resulted in tens of millions of dollars of work in the province to be put on hold.

“There is serious impact to ISPs (internet service providers) around the province,” Sala said. “There is serious economic impact at a time where we should probably be doing everything we can to keep Manitobans working.”

Grewal said an extensive review of MHI’s operations by an independent third party is underway and that no decisions have been made.

She said, “It’s important for people to not confuse the Crown corporation’s review of its operations — a common business practice — with talk of privatizing Manitoba Hydro, as has been portrayed in some media coverage.

“As I have previously stated, Manitoba Hydro is owned by the people of Manitoba and will continue to be owned by the people of Manitoba. To be clear, Manitoba Hydro will not be privatized.”

martin.cash@freepress.mb.ca