Quebec Asks Newfoundland To Sign Hydro Deal

The 2,200 megawatt Gull Island project -- an extension of Labrador's huge Churchill Falls hydro project in Canada's northeast -- was put on hold last week as opposition to the deal grew in Newfoundland.

An agreement between the two provinces was expected to be signed before Christmas but Newfoundland Premier Roger Grimes said this week it was unlikely.

Quebec's Landry urged Newfoundland on Wednesday "to grasp this amazing opportunity to quickly launch construction."

Newfoundland, still seething over a long-term contract that gives Hydro-Quebec low-cost power from Churchill Falls, is wondering whether this deal will be any better.

Virtually all the electricity produced at Gull Island would be sold to Hydro-Quebec, one of North America's biggest utilities, with recall rights held by Newfoundland.

Newfoundland has argued it should be paid much more for the power generated by Churchill Falls, but Quebec has rejected that idea. The issue has remained a bitter division between the neighboring provinces and made any new deal between them an uphill battle.

Quebec still hopes a deal can be reached in 2003.