CUC’s plan to scale back 80-MW project questioned

Denying accusations that lobbyists were behind efforts to press the initial plan on the controversial Saipan power project, Senate Floor Leader Pete P. Reyes has questioned moves by the Commonwealth Utilities Corporation to scale it back when it had insisted it was needed just a few months ago.

He also said that he agreed with the decision by the government corporation to re-assess the entire project before pursuing its next step, but added that this should have been undertaken earlier when the independent evaluation was ongoing.

Mr. Reyes has been in favor of holding oversight hearings on the project that has come under a storm of protests due to the initial review by CUC on all proposals submitted by 13 firms.

While he welcomed the investigation, CUC Executive Director Timothy P. Villagomez last week slammed what he called aggressive lobbying by one of the top bidders in its effort to influence the Legislature.

“It has nothing to do with lobbying efforts,” Mr. Reyes said in an interview. “I feel very insulted that [it appears] I am being influenced by people lobbying here. There are so many lobbyists coming to the Legislature, including lobbying for the Accountancy Act, but I did not put that out because I was not influenced.”

Mr. Villagomez last week said he would send a letter to the senator and House Speaker Diego T. Benavente, who have both raised the possibility of the probe, informing them the CUC Board would await the study on the actual power demand on Saipan before awarding 80-megawatt plant contract.

According to Mr. Reyes, he has no problem with the planned assessment, although he questioned moves to tap Burns & McDonnell to determine the island’s power demand when the latter had issued warnings of power shortage six months ago if the project was further delayed.

“Now we have hired an evaluator to review and make assessment so that they can justify what needs to be done,” he explained. “I am not accusing anyone of wrongdoing [but] the insistence to try to re-bid this…and the insistence for Marubeni-Sithe…raise a lot of eyebrows.”

The Japanese conglomerate and its U.S. partner won the $120 million contract last year in an in-house review conducted by CUC officials, but other firms protested the decision.

Burns & McDonnell, in the second round of re-evaluation, ranked Enron, Tomen consortium and HEI/SPP, higher than Marubeni-Sithe. CUC has yet to choose the final contractor pending the release of the study this month.

“This has nothing to do with lobbyists but the facts are that [it]…has not ranked Marubeni-Sithe anywhere close to being considered a possible, viable proposer and that a top bidder has not been awarded the contract and has not been asked to negotiate whether they can accept downsizing or whether building it by phases,” said
Mr. Reyes.

The senator is proponent of the measure passed last week by the Senate that will tie CUC’s hands to the initial 80-MW project plan. It is now pending in the lower house.