$5.1M DCM contract ‘a mistake’

After five hours of questioning by lawmakers yesterday, Commonwealth Utilities Corp. executive director Antonio Muna admitted that CUC had made a mistake with its $5.1-million contract with the Guam-based firm fixing the engines at the Saipan power plant.

The DCM Group, which was hired to repair seven of the eight generators at the main power plant in Lower Base, has been issued a notice of default for falling behind schedule. DCM has said it’s having problems getting needed parts.

During a public hearing in the Senate chamber yesterday, senators quizzed Muna about DCM’s work and a new $6-million temporary power contract with the U.K.-based Aggreko International. The senators said Aggreko’s rental generators would have been unnecessary if DCM stuck to the schedule.

Sen. Maria Pangelinan, in particular, raised concern that CUC might end up keeping Aggreko for much longer than its 12-month contract if DCM’s problem dragged on. “DCM says they cannot get the parts. But we should have known that before we jumped into a contract with them,” she said in the hearing held by the Senate Committee on Public Utilities, Transportation, and Communications.

To this, Muna replied, “We made a mistake. We learned from our lesson, and we’re not going to do it again.”

However, he stood firm on CUC’s decision to hire Aggreko despite offers of emergency power from Telesource CNMI, which is running the power system on Tinian. Senators Paul A. Manglona and Jude Hofschneider both said CUC should have given due consideration to Telesource’s proposal before it signed a contract with Aggreko.

“I think you’re right. We probably could have done it differently. But we’re looking at someone who can bring us reliable temporary power at the soonest time possible. I feel we minimized the possibility of errors when we chose a globally recognized company,” Muna said.

He also maintained that CUC got a good deal with Aggreko, which will charge the local utility 5 cents per kWh. Aggreko’s rate includes the generators, lube oil, personnel costs, and maintenance. Telesource had proposed 7 cents per kWh.

Further, Muna said Telesource’s plan to transfer generators from Tinian to Saipan entails more permanence. “We are looking for a temporary solution, not to acquire more assets,” he said.

He also argued that it may be in Tinian’s interest to keep the engines where they are, given the population growth that is expected to happen on the island with the military buildup and opening of new casinos.

It remains unsure where CUC will get the money to pay Aggreko. Under the contract, CUC must make a partial payment of $1.5 million before Aggreko ships the containerized generators.

Muna over the weekend has asked the Marianas Public Land Trust to provide the money. MPLT, which invests funds collected from the use of public lands, was scheduled to make a decision Monday evening.