Sharing the Profits as Partners
NCN negotiated an agreement designed to ensure the project delivers immediate, short-term and long-term benefits.
NCN has exercised its option to own up to 33 percent of the Generation Project through the Taskinigahp Power Corporation (TPC), which is wholly owned by NCN.
Training and Jobs
Among the first benefits and major accomplishments was securing the Atoskiwin Training and Employment Centre of Excellence (ATEC), an accredited technical school located in Nelson House, intended initially to train NCN Citizens for jobs on Wuskwatim.
In terms of direct project benefits during construction, qualified NCN Citizens were given first preference for jobs on the project. Over 300 NCN Citizens received Wuskwatim-related training through ATEC since 2003 with many obtaining work in Wuskwatim-related jobs over the life of the project.
The project provided opportunities for NCN businesses and joint venture partnerships, which received first preference on contracts for specific components of the project without the need for competitive tendering.
More than $100 million in contracts were negotiated for such things as access road construction, catering and security.
NCN May Receive at Least $3 Million Annually
Assuming NCN takes a 33 percent stake in the Generation Project, in the early years of the partnership, much of the profit from Wuskwatim will be used to pay back loans from Hydro.
However, in the early years NCN will have access to a minimum of about $3 million annually for community programs, from revenues from water power rental and dividend loans.
As the loans are paid off, the annual revenues will increase.
The Wuskwatim Generation Project final cost is estimated to be about $1.3 billion.
The Wuskwatim Power Partnership will borrow 75 percent of the cost and this will be treated as the partnership’s long-term debt. The remaining 25 percent will have to be paid in cash by the partners, split proportionally to the level of investment.
NCN’s one-third share of this capital investment is currently estimated around $114 million. But, NCN only needs to come up with $32.7 million, because Hydro will lend TPC the balance of about $81.3 million. As of June 22, when the first generator went into service, NCN had to pay for a minimum of 27.5 percent of project units to maintain its option to move to its full 33 percent ownership by July 2013. By June 22, NCN committed $16.428million which represent about 28.5 percent of units.
Projected Benefits Over Longer Term
Projections of financial benefits over the next 25 years include:
- About $11.5 million spent to train and employ NCN Citizens in the community and on the project
- Direct negotiated contracts of approximately $100 million in contracts mentioned above
- About $5 million in wages to community members for work on the project
- About $100 million in revenues over the initial 25-year-term of the project.
The total benefits to NCN and NCN Citizens in this period are estimated to be about $216.5 million. Looking farther into the future, once all the loans are repaid, NCN could receive revenues of tens of millions of dollars per year.
Taskinigahp Trust Established
To manage the Wuskwatim revenues, NCN created a new trust called the Taskinigahp Trust that will be similar to the existing Nisichawayasihk Trust.
Profits to Fund Community Programs
NCN’s expectation is that the profits from the project will provide a long-term, independent source of revenue that will help ensure the future well-being of our people and community.