Marubeni seeks legislative intervention

A conglomerate initially selected to build the new 80-megawatt power plant on Saipan is seeking intervention of the CNMI Legislature to resolve mounting protests that have stalled the $120 million project for the last six months.

Japanese industrial giant Marubeni Corp. and its U.S. partner Sithe Energies, Inc. also accused a close competitor opposing its deal with Commonwealth Utilities Corporation of delaying the project, saying its protests were “baseless.”

The consortium of Alsons, Tomen, Singapore Power and Tan Holdings Corp., whose protests are pending with the Office of the Public Auditor, denied the charges as it reiterated its call for independent review on various offers submitted for the proposed plant.

But Marubeni-Sithe, in a statement sent to news media yesterday, warned that failure to resolve the dispute now would throw Saipan into crippling outages and cost the government millions of dollars in lost revenues as well as legal fees.

Citing that the CUC Board of Directors — appointed by the governor and confirmed by the Senate — has done its job “fairly” on the power plant contract, the firm called for a legislative intervention to decide on the legal snag.

“The legislature… was elected by the voters of the CNMI. Let them do their job and resolve this matter through appropriate legislative action,” Marubeni-Sithe said.

The statement followed a proposal from Senate Vice President Thomas P. Villagomez, chair of the Public Utilities, Transportation and Communications committee, to settle the issue by way of resolution adopted by legislators.

A representative of the multinational consortium, however, said the move is “unconstitutional, a travesty and cruel joke” in light of the CUC decision to conduct another round of deliberation through an private engineering firm.

“Who would, in his right mind, be voting to award a $120 million contract to somebody who was not even the lowest bidder,” asked Robert J. O’Connor, lawyer for the consortium.

To refute accusations by Marubeni-Sithe, the legal counsel maintained its protests were lodged with the government-owned utility firm since early last year and CUC failed to expedite resolution of their initial challenge.

“We filed our protests in February and March last year. CUC could have decided in two weeks and we could have filed our appeals earlier and not in June (1998). CUC has been dragging its feet,” O’Connor explained in an interview.

“Our protests have not delayed anything,” he added.

Baseless

In the statement, Marubeni-Sithe also claimed the consortium failed to provide basis for its complaint against the deal forged with CUC in June last year.

The protests questioned competence of the in-house selection committee that recommended awarding the contract to Marubeni-Sithe despite the consortium having a lower bid.

According to Marubeni-Sithe, the procurement process adopted by CUC was fair and that their offer will result to savings of at least $1.3 million each year for Saipan’s power consumers.

“If the consortium’s protests and legal actions continue (to be) unchecked, the construction of the power plant will be delayed at least one year at the cost of millions of dollars in consultant fees and lost revenues to CUC,” they pointed out.

O’Connor said: “CUC has shown single-minded determination to award the contract to Marubeni-Sithe no matter what its bid is.”

Initially scheduled to start construction by late last year, the Saipan plant is designed to meet projected increase in power demand on the island by the end of the decade.

OPA has suspended action on the protests of the Alsons consortium and Enron, which trailed behind Marubeni-Sithe, pending results of the review in the next few weeks which will determine the winning bid in what is touted to be the largest deal ever in the Northern Marianas history.

“All we’ve ever wanted is an independent agency to re-evaluate the proposals,’ O’Connor said.