CDA wants another round of RFP for power project

With its huge stake in the utilities corporation, the Commonwealth Development Authority is pushing for the issuance of a new request for proposal for the 80-megawatt power plant to simplify its procurement criteria.

CDA Board Chair John S. Tenorio said the new RFP to be issued by CUC should only be limited to the type of fuel that will be used to run the power plant and the new utility rates when the project is finished.

Mr. Tenorio said CUC should not get involved in determining the type of machine that will be bought by the company selected to carry out the project. “If the company chooses to buy a junk then that’s their problem because under the contract, they will maintain it for the next 25 years. It will become too costly for them to buy a machine that’s of poor quality,” said Mr. Tenorio.

Designed to meet increasing power demand on the island by the end of this decade, the $120 million-project will be constructed under a build-operate-transfer scheme, touted to be the biggest ever in the CNMI’s history.

While he welcomes any investigation on the power plant project, Mr. Tenorio cautioned the Legislature against infringing on the responsibility of the utilities company to do its job. He said CUC should be given a chance to resolve the matter since the board and management are capable of running the utilities firm.

CDA has earlier urged the board to review the magnitude of the project as it will entail huge financial liability to the government without customers connecting with island power.

The CDA chief also criticized Enron Corp. for insinuating that the CNMI will find it hard to entice new investors on the island if it cannot deliver an efficient power supply. On the contrary, Mr. Tenorio said, he believes that the Northern Marianas has a capable power plant that can still serve the island within the next five to seven years.

The controversial power plant project has been delayed due to mounting protest since its initial awarding to Marubeni-Sithe in June 1998.

An independent evaluation conducted by Burns & McDonnell - the private engineering firm hired by CUC to clarify the questions on its initial review named Enron, the Houston-based industrial giant as the company that scored highest in the final evaluation.

But the utility board last October deferred the awarding of the contract to the top bidder pending assessment of the island’s actual power demand in view of the economic downturn confronting the CNMI.

While CUC will decide by next month whether to scale back the 80-MW plant or scrap it altogether, Enron and its close competitor Tomen Consortium have pressed the board to start final negotiations now with the potential contractor and discuss ways on how to accommodate its concerns.

Amid criticisms that the much-delayed project may not even begin before the term of the current administration ends, Mr. Tenorio said the project should not be rushed since the present power plant can very well serve the island.