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Economist.com checks out CUC privatization
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Posted on Aug 23 2005
The Babauta administration has hired Economist.com to evaluate the financial status of two companies, Telesource CNMI and Rolls Royce, in view of their pending proposals to privatize power generation on Saipan.
Press secretary Peter A. Callaghan said yesterday that the administration, through the Attorney General’s Office, tapped the expertise of the consulting firm early this month.
“We hope to receive the report in a week or two,” said Callaghan.
He said it is the remaining issue in the ongoing discussion with proposers on the privatization of Power Plant I.
The Commonwealth Utilities Corp.’s power consultant, Harris Group, said in early July that a privatization contract would be awarded “in less than two months.”
Harris Group vice president Dennis Swann said that parties were down to “personnel” and “costs” issues in their discussions.
Swann earlier expressed optimism that both proposers are financially viable, citing that neither has defaulted on any contracts in the past several years.
Callaghan said recently that the government asked the two proposers to submit their latest financial statements to further establish their ability to handle Saipan’s power generation.
He said Gov. Juan N. Babauta “wants the two bidders to provide us their revised financial statements.”
An independent power provider contract, estimated at $60 million, would involve the takeover of the eight-engine Power Plant I in Lower Base, its rehabilitation and upgrade to meet federal environmental standards, and installation of two new 15-megawatt generators.
The contract would allow the private company to operate the machines for 20 years, with CUC providing the fuel for free.
