‘Funny’ finances and Aggreko

I read with astonishment that CUC has apparently signed a “contract” with a British based company (Aggreko) to rent 10 gen-sets for a combined total output of 10 megawatts. CUC intends to pay 5 cents per kwh generated and a rental of about $4 million for one year. If this isn’t a deal that should be thoroughly investigated by everyone in the CNMI, then I might as well just shut up and go hide in a corner someplace. Here’s a few facts I learned in just the last few hours:

We all know that Telesource has excess capacity on Tinian—most notably 10 megawatts of new capacity. We also know that Telesource offered to move those engines to Saipan and set them up as a temporary power relief system while Saipan’s own were repaired. That offer was roundly snubbed. Why?

We know that DCM and several other contractors have been hired on “sole source” contracts to the tune of some $10 million to “repair” existing gen-sets. And we know that these “repairs” have not even come close to being realized, even more than a month after expected completion. How did these contracts come into being? Was there no oversight? No penalty clauses? Sweetheart deals? What?

We all know that Saipan’s existing system is on the verge of complete collapse—imminent collapse. Is that why the rush to “repairs” and when that didn’t pan out, the rush to “rental?” If it wasn’t for the valiant efforts of an IPP at power plant 4, all of Saipan would have been in the dark by now.

We’ve all heard of the overdue payment from CUC to Telesource on Tinian—now it seems that there is an even bigger overdue payment to the IPP on Saipan, fully four months worth. This is astoundingly incompetent! What is CUC doing with its income? What kind of shell game are they playing?

Now, here’s the biggest shocker of all—to me. A quick search on the Internet, and a few well-placed phone calls (at my own expense) led to the discovery that Lohrmann, a giant German power plant manufacturer, has surplus gen-sets for sale. Just Google them and look at the lists. One in particular struck me. There is a set of fifteen 11 megawatt gen-sets up for sale at the mere price of $2.5 million each. These sets (Man B&W) were manufactured in 1994 and taken out of service in 2007. They were completely overhauled and refurbished this year and have zero operating hours since overhaul. They run on heavy or light oil. There are also many other gen-set choices for sale, but this one really caught my eye.

Now, what would you rather have: a rented set of 10 one megawatt gen-sets for one year at $4 million and 5 cents per kwh, or a purchased 10 megawatt gen-set for $2.5 million? This just seems like a no-brainer to me! In fact, it is so ridiculous that we could have (by now) purchased at least three of those 11 megawatt gen-sets at $2.5 million each and paid the relocation and installation cost of another $2.5 million for the same $10 million going for as yet unrealized repairs! We could have simply ripped out three of those larger engines awaiting “repair” and dropped in three like-new units and that would, my friends, yield an additional, and immediate, 33 megawatts of capacity—our own capacity.

This whole thing stinks to high heaven and I can only hope that all of you reading this will call it “funny” finances as well. Meanwhile our Governor (Nero) is off tilting at windmills (again) while the CNMI (Rome) burns to the ground. Legislature, it’s your turn; jump on this with all four feet—please!