CUC welcomes probe on power project

Saying he welcomes any investigation into the controversial Saipan power project, Commonwealth Utilities Corporation Executive Director Timothy P. Villagomez yesterday lambasted what he called aggressive lobbying by one of the bidders in a bid to influence the Legislature.

The embattled CUC director also dismissed fears that CNMI’s credibility with outside investors is at stake if the utility firm decides to scrap the initial plan and scale back the proposed 80-megawatt plant.

“We’re open to any investigation. We have nothing to hide,” he told reporters. “What amazes me is the amount of lobbying being done to try to sell a product and not looking at the ramification associated with it.”

Mr. Villagomez, however, stressed at a news conference that the government corporation will stick to its decision to await findings by independent experts before taking its next step despite mounting pressure from key lawmakers.

“I am concerned more about making sure that the public is well protected and that the investment the CNMI is undertaking is not an investment that is going to bounce back in our face,” he said. “That credibility should be second [priority].”

The top utility official called the conference to respond to recent moves by some members of the Legislature who have vowed to investigate into the controversy surrounding the much-delayed project.

House Speaker Diego T. Benavente and Senate Floor Leader Pete P. Reyes have both expressed the possibility of conducting oversight hearings, while the Senate has passed a measure tying the hands of CUC to the original plan which is to build an 80-MW plant.

Lobbyists

Mr. Villagomez sent a two-page letter to the two in hopes to set the record straight following their recent statements, which he blamed on “lobbyists for one of the firms. . .who are misinforming you and the people about CUC’s plans for the project.”

He did not name the firm. But some Enron representatives visited Mr. Benavente early this week for a meeting he said was to keep him updated on its proposal. The Houston-based industrial giant is among the top bidders for the project.

“Lobbying efforts have been just too tremendous and [the public] will not take that responsibility with the board,” said Mr. Villagomez as he dismissed perception that residents may now be impatient because of the slow pace with which CUC attempts to resolve the issues.

Denying insinuations that CUC is trying to delay the project to favor one company, he warned that proceeding with the present size of the plant without the benefit of a new study could bankrupt the corporation and become a burden to the government.

Mr. Villagomez wrote the two legislators that “no one in the CUC Board or administration has the intent or even the capability to manipulate” the awarding of the contract as it entails seal of approval by both the Legislature and the Commonwealth Development Authority.

In interview with reporters last Tuesday, Mr. Reyes questioned “the force behind continuing the effort to award Marubeni-Sithe” despite results of the independent evaluation that ranked three other companies, including Enron, ahead of the Japanese conglomerate and its U.S. partner.

Marubeni-Sithe won the $120 million contract last year after a highly-questionable in-house review that was later scrapped amid protests from competing firms.

Asked whether he knew allegations of bribery to favor one firm, Mr. Villagomez said he was not aware of those charges. “Those are news to me but I am sure that members of the board and even myself have the responsibility to make sure that things are done properly and legally,” he added.

Legislative solution

On the Senate bill legislating the need for an 80-MW plant on Saipan, the CUC official said he has not read its provisions, although he expressed hope that the utility corporation will be given an opportunity to comment before enacting the proposal in the lower house.

Sponsored by Mr. Reyes, this is the second attempt to resolve the two-year dispute through legislation in what may be viewed as an attempt by lawmakers to forbid CUC from scaling back the project.

Last year, efforts to back Marubeni-Sithe died in the Legislature after the Office of Public Auditor ruled that an independent evaluation was necessary to silence legal protests.

While it completed that review, Burns & McDonnell — the private engineering firm hired early this year to conduct the re-evaluation of all 13 proposals and new assessment of the island’s need for a project with such a magnitude — is expected to hand over to the board its report by next week. .

Mr. Villagomez assured CUC will decide on its fate by January 2000 before the expiration 90-day extension sought before awarding any contract. He did not rule out the possibility that they may issue a new request for proposal for a low-capacity plant which will bring the matter back to square one.

“By taking the necessary steps and taking this extra time to try to come out with a package that will give the board the tools to make this final decision is a positive thing,” the director explained. “I am not rushing into something that may create a problem.”

Designed originally to meet anticipate increase in power demand on Saipan by next year, the project was to be constructed through build-operate-transfer scheme under a 25-year contract touted to be the largest deal ever in CNMI’s history.