Panel sets hearing on power project

A public hearing set for the new 80-megawatt power plant on Saipan will be held only after the Commonwealth Utilities Corporation has completed an independent review of all proposals submitted for the project, according to legislators.

The House committee on Public Utilities, Transportation and Communications is scheduling the town meeting to determine whether the government should back up the $120 million project that has been mired in controversy.

PUTC chair Rep. David M. Apatang said the panel wants to make sure that the final CUC decision will not be in conflict with the provision of the proposed legislation.

The measure, pending before the committee, seeks full faith and credit guarantee from the government on the project based on an earlier agreement between CUC and Marubeni-Sithe that has drawn protest from competing bidders.

So far, the bill has met unfavorable response from some government agencies, including the Office of the Public Auditor and the Commonwealth Development Authority, due to its possible negative implication on the government action.

Senate Vice President Thomas P. Villagomez, who heads PUTC in the upper house, expressed support for the hearing to gather views of the people regarding the long-stalled project.

“When I initially made my recommendation to legislate this matter, I gave full confidence to the CUC board and I was hoping everybody will respect their decision,” he told in an interview.

The senator initiated the legislative move to throw full support behind the conglomerate chosen by the government-owned utility corporation as the project requires the CNMI government to assume all financial liabilities should CUC fails to meet its obligations.

Marubeni Corp. of Japan and its U.S. partner Sithe Energies, Inc. were awarded the contract in June last year to build the new power plant, but the deal has been called off since CUC decided to hire a private engineering firm to reevaluate all proposals from 13 companies.

The government guaranty is necessary as part of the build-operate-transfer scheme of the project touted to be the largest deal ever in the Northern Marianas.

Burns & McDonnell, the Kansas-based firm hired by CUC last January, is set to undertake a second round of review to make a final determination of a contractor for the project which has been delayed for the last seven months due to the mounting opposition.

“Not only that we have dragged it, we have spent so much money to come this point,” Villagomez explained. “I bet you that if the same results come out, those same people will continue to question it.”

OPA has held off action on the protests of close competitors Enron and the consortium of Alsons, Tomen, Singapore Power and Tan Holdings Corp. pending result of the fresh round of review which is expected to be completed within the next few weeks.