‘Audit bidders for power plant privatization’

The administration has requested that the two bidders in the power plant privatization project be subject to financial audits.

Gov. Juan N. Babauta said the audits should be conducted immediately “to protect the interests integrity of the competitive bidding, evaluation, and selection process.

Babauta also reported that the administration—which has control of the Commonwealth Utilities Corp. pursuant to the governor’s May 19 declaration of state of emergency—had approved CUC’s request to hire a law firm to work the utility and the Harris Group to negotiate the terms of a final contract with the independent power producer that would be taking over Power Plant 1 in Lower Base.

The Harris Group is CUC’s consultant for the privatization project.

“This will provide additional safeguards to ensure that the final agreement for the privatization of Power Plant 1 is in compliance with the established competitive bidding, evaluation, selection process and is in the best interests of CUC and the people of the CNMI,” said Babauta.

Contrary to an earlier report that the power plant privatization might take place sooner than the October 2005 target, the governor said the evaluation and selection process for the final IPP was behind schedule.

“The administration, therefore, has asked CUC to expedite the evaluation and selection process,” said Babauta.

A request for proposal for the privatization project has been in place since 2003.

Currently, the Harris Group is assisting CUC in evaluating the two qualified IPPs that submitted bids for the privatization project.

Babauta said the Harris Group had sent letters to the two bidders—Rolls Royce Power Ventures and Telesource CNMI—setting forth a specific time-frame and agenda for reviewing all questionnaires, clarifications, and responses, and holding the meetings that are necessary to enable CUC to complete the selection process.

“The privatization of Power Plant I at Lower Base is essential to increasing the efficiency and reliability of this vital power facility in Saipan. The increased efficiency and reliability will not only significantly reduce the danger to the public posed by uncontrolled load-shedding, it will lead to a much needed reduction in the overall cost of fuel consumption,” Babauta said.