CUC genset plan raises red flags

A Commonwealth Utilities Corp. plan to buy a diesel generator is raising red flags for two minority lawmakers.

Minority leader Edmund S. Villagomez (Ind-Saipan) and Rep. Edwin K. Propst (Ind-Saipan) are blasting the CUC board’s action, saying the whole process did not go through proper bidding.

Propst obtained a letter by CUC executive director Gary Camacho to Amelia R. Toelkes, president of General Pacific Services Marianas Inc., detailing CUC’s intention to buy a diesel generator. The letter states that CUC notified GPSM on Feb. 17 about the plan to procure the machine.

Camacho stated in the letter CUC’s decision to procure one 8- to 10-megawatt generator, based on the quotation of GPSM and its partner, Fairbanks Morse.

“Thereafter, CUC met with GPSM’s team over several days to discuss contract terms and financing. These discussions included presentations and discussions with CUC’s board of directors,” Camacho’s letter states. “I am pleased to inform you that the board of directors has decided that CUC will continue with its plans to proceed with the procurement of this engine. This includes the turnkey supply, installation, and commissioning.”

Saipan Tribune tried to obtain comments from Camacho, for the details of the contract, along with the procurement and bidding process that took place, but he has yet to answer as of press time.

A source at CUC said the process did not go through the corporation’s Procurement and Supply Division; rather it was “upper management” that handled the project.

Propst and Villagomez questioned why the CUC board decided to go ahead and put together the emergency purchase for the generator unit. They also questioned the Toelkes’ company’s credibility since it has been in operation in the CNMI for less than a year.

Amelia R. Toelkes is the wife of Robert Toelkes, whose company, International Bridge Corp., filed for bankruptcy last year and failed to finish its project at the JFK High School in Guam.

Robert Toelkes is also implicated in the M/V Luta controversy, being one of the defendants in the case filed by Japanese investor Takahisa Yamamoto.

IBC, according to Pacific Daily News, owes the Internal Revenue Service $9.2 million in federal taxes and another $4.8 million in business taxes to the government of Guam.

“There are a lot of issues concerning JFK High School. They have problems with their project at the school and it was never finished. [GPSM] started its operations in June 2016 and they partnered with Fairbanks Moores but they are not an actual partner, more like a salesperson or a middleman. There’s a huge concern for this that needs to be looked into and find out if they [FM] is the seller or a partner. If there’s a middleman, the generator would definitely cost higher,” said Propst.

Villagomez asked for the reason behind the emergency purchase. “Why don’t they [CUC] just go straight to the supplier? There’s no proper procedure in the emergency procurement. Why is it an emergency purchase?”

Propst also questioned why the CUC board moved quickly with the emergency purchase, despite the fact that Saipan is not experiencing any rolling blackouts and power outages.

“They [board] should have secured a consultant since this person is needed to address the reliability, efficiency, and technology of the generator,” he said. “The board must make sure they are putting together the best plan in purchasing the generator. They are moving this expeditiously without carefully scrutinizing the contract. Another problem is the board held a closed-door meeting on March 13 to discuss the negotiations of the contract with GPSM. We know nothing about the meeting. Why are they already negotiating with [GPSM]?”

Propst said they want to know Toelkes’ background, whether she’s an engineer or a long-time contractor with experience in dealing with generators. “This is very sketchy and I don’t think any taxpayer would like this. If a [request for proposal] was done, it would make more sense. They are already negotiating with the terms as if they already purchased it.”

Villagomez said this is an issue that the House Public Utilities and Communication Committee, chaired by Rep. Francisco Dela Cruz (R-Saipan), should look into. Rep. Blas Jonathan Attao (Ind-Saipan) is the lone minority member that is also part of the PUC committee.

Since it’s almost budget season, the Legislature, through the House Ways and Means Committee, could ask CUC about this project, Villagomez said.

“This is how corruption happens. They should have opened that to the public. It is okay to have an executive session to discuss certain issues, but in terms for them to move forward with this decision, that should be made public based on the Open Government Act.”