CUC to select 80-MW contractor today

Three top bidders on the long-delayed power project on Saipan will have the chance to win the $120 million contract as the Commonwealth Utilities Corporation starts its negotiations with each of them after today’s highly anticipated board decision.

Six board directors of the government-owned utility corporation are expected to voice their votes on the fate of the proposed 80-megawatt power plant — a move that will bring the project to its next phase almost three years since its procurement began.

The board is likely to “temporarily” award the lucrative contract to three highest-ranking proposers: Enron, the Tomen Consortium and the Saipan Power Partners/Hawaiian Electric Inc., according to a source privy to the current discussion.

They will then begin separate negotiations with each of the three firms to get the best offer in terms of price and overall capability to handle the project — touted to be the largest deal ever in CNMI’s history.

To be installed through the build-operate-transfer scheme under a 24-year independent agreement, the new plant is designed to meet projected increase in power demand on Saipan.
Enron, Tomen and SPP/HEI emerged top scorers in an independent evaluation conducted by power consultants from Burns & McDonnell, who were hired by CUC in January 1999 after a tumultuous in-house selection process.

Dogged by protests since June 1998 when the board awarded the contract to Marubeni-Sithe, the project drew attention of the Legislature in October last year following the board’s decision to pick a contractor pending re-assessment of the island’s power load requirement.

That led to collapse of the initial request for proposal which was initiated by former board chair Rosario M. Elameto, who was ousted in a surprise election last March; and the passage of the law sponsored by Senate Floor Leader Pete P. Reyes which forced CUC to stick with the 80-MW project.

Today’s board action, which is a continuation of a May 18 meeting, barely beats the deadline imposed by a recently enacted law which reinstated the original plan to have the 80-MW plant built, instead of the 60-MW capacity approved by majority of the board members last January.

Under Public Law 12-1 signed by Gov. Pedro P. Tenorio last April 3, CUC has 60 days to award the contract. That grace period expires on June 3.

The board last week postponed its decision on the project during its meeting on Rota pending the hiring of a private legal counsel to replace its current lawyer, Assistant Attorney General Bill Ohle who has resigned effective June 15.

CUC received only one proposal under its 15-day emergency procurement that ended May 13 and sources said it came from Steve Woodruff, the Senate legal counsel. The report could not be independently confirmed.

Earlier, Board Chair Jesus T. Guerrero has said they are weighing other options on how to deal with the departure of its present legal counsel as he stressed that having a legal adviser is integral in its handling of the power project.

One option is to request a replacement from the Attorney General’s Office and the other is to hire the lone legal service bidder. A final decision is expected to be made today.