House questions CUC’s contract sole-sourcing

House Vice Speaker Timothy Villagomez is asking the Commonwealth Utilities Corp. to reconsider its decision to sole source the contract for the Agingan Ocean outfall project, warning it would only invite more litigations.

Villagomez, chair of the House Committee on Public Utilities, Transportation, and Communications, noted that the project was previously advertised “with three responsive bidders.”

In a letter addressed to CUC board chair Frank Guerrero and executive director Lorraine A. Babauta, he said that while he understands that CUC is required to fix the outfall problem immediately as mandated by the Environmental Protection Agency, “CUC must also be mindful of the consequences of its actions.”

“While CUC may be dodging fines from the EPA, it may be opening the door to other litigations involving the sole source procurement…,” he said.

Further, Villagomez said he is “apprehensive” about CUC entering a financing arrangement with the proposed company. He said that such arrangement would mean that CUC must pay interest on the dollar, which translates into increased public debt.

“Considering the state of our economy and CUC’s present financial situation and the rising cost of fuel, it may not be prudent for CUC to enter into such arrangement,” he said.

In the letter, Villagomez also recommended that CUC identify specific funding for the project. He also suggested that CUC re-advertize the project with the new financing option thereby complying with its own procurement regulations “and giving all the contractors the opportunity to bid.”

CUC has been under EPA citation for two years now over the local agency’s failure to construct the Agingan wastewater ocean outfall.

CUC said that the project would require a minimum of $2.8 million. But the design for the outfall, which was completed in May 2002, actually requires $7 million.

CUC earlier said that it only had $750,000 from EPA.

The EPA requires the CUC to set up additional control measures at the treatment plant. In particular, the EPA wants the construction of a submerged ocean outfall “to increase initial dilution, [thus] providing additional treatment.”

The wastewater facility treats sewage collected from southern Saipan and discharges them through an outfall pipe at the Agingan cliff and into the ocean, which EPA described as waters of the United States. The plant treats 2.4 million gallons of wastewater each day.

The effluent, however, violates water quality for bacterial indicators, organisms, nutrients, metals concentrations and turbidity under the National Pollutant Discharge Elimination System permits, authorities said.