Delay in Saipan power project questioned

Senate Floor Leader Pete P. Reyes has expressed concern over the delay in the decision of the Commonwealth Utilities Corporation on the Saipan power plant despite completion of an independent evaluation on the various proposals for the long-stalled project.

He warned bids submitted by different power companies as early as 1997 are valid only until October 16 this year as stipulated in the initial request for proposal, which will make the two-year procurement process void unless the $120 million contract is awarded before the deadline.

In a letter to Rosario M. Elameto, chair of the CUC Board, Reyes also urged the government-owned utility firm to begin its selection and announce its choice as soon as possible in order to expedite construction of the 80-megawatt power plant.

“I am aware of the complex nature of the project and understand a certain degree of justifiable delays,” he said. “However, I strongly believe that enough information is now readily available to make the right decision for the people.”

Burns & McDonnell, the private engineering firm hired early this year by CUC to re-evaluate the 13 proposals, has reportedly finished the second phase of its review, which will be the basis of the board’s decision in awarding the contract.

Only six out of nine companies deemed qualified to bid on the power plant handed in their “best and final offers” for the second phase of independent evaluation conducted by the Kansas City-based company.

But the utility corporation has yet to hold its board meeting since July, when new CUC directors were sworn into office, and officials are not certain when they will conduct the next meeting to discuss the final report.

According to Reyes, Burns & McDonnell’s submission of its recommendations “leaves no more room nor reason for delay” as he cited rumors of a CUC plan to downsize the plant’s capacity to less than 80 MW.

“I sincerely hope that CUC has no intention of sitting on these bids and the report of the independent evaluator until Oct. 16, 1999, thus making all bids and efforts void,” added the senator.

Rejecting another round of procurement process, Reyes said the project is important as part of the efforts by the government to spur the local economy and create the free trade zones on the island.

“(T)he credibility of the CNMI as an attractive or potentially friendly business environment will be shattered should a project of this magnitude continue to be botched by our government and procurement system,” he said.

Elameto or any CUC official could not be reached for comment on Reyes’ letter dated Sept. 29.

The utility corporation is under pressure from the government to expedite resolution of the dispute lodged by Enron against CUC’s choice to award the contract to Marubeni-Sithe, a deal which has delayed construction for more than a year.