Firm wants to buy out power plants

Telesource CNMI, Inc. has proposed to buy out all of the cash-strapped government’s power plants and other power generation assets on Saipan and vowed to quickly solve the island’s power crisis.

Telesource chief executive officer and president Nidal Zayed said the power crisis is one that needs a quick solution since the fate of the CNMI’s economic recovery significantly relies on this.

The proposal, however, deviates from the government’s normal procurement procedures, which is usually a bidding process.

In a recent letter to Lt. Gov. Timothy Villagomez, a former executive director of the now defunct Commonwealth Utilities Corp., Zayed said his company is willing to sit down and negotiate with the government about the proposed buy-out.

“Telesource is prepared to undertake immediate due diligence and subsequent negotiations with you with the objective of purchasing all of your Saipan power plant facilities, i.e., Power Plants 1, 2, 3,and 4,” Zayed said.

“Our vision is to purchase all of the CUC power generation assets on Saipan and commit to deliver to you, reliably and efficiently, all the power the island requires up to 100 megawatts and beyond,” he added.

Zayed said the company’s interest stemmed from its confidence in the fiscal responsibility of the new administration and the latter’s plans for economic revitalization.

He made a commitment that his company will deliver reliable power in a cost-effective manner once the government agrees to sells its power generation assets on Saipan to the company.

Zayed said his company’s power plant on Tinian is the only such facility in the CNMI that is licensed to operate by the U.S. Environmental Protection Agency.

An affiliate of the SHBC Group of Companies that have business interests in different parts of the world, the company also manages 70MW power generation in Fiji and will soon take over the Labasa Power Station on Vanua Levu, the second largest island on Fiji.

On Saipan, Telesource has been involved in over $100 million worth of construction projects, including Saipan’s prison facility.

“We are not convinced that another long and possibly contested RFP [Request for Proposals] process to privatize Power Plant 1 would be in the best interest of the CNMI citizens. If the Saipan power plant suffers a tragic breakdown—a very possible outcome based on the current state of affairs—the entire CNMI will suffer immeasurably and the time to recover from such a tragedy will be long and extremely painful,” Zayed said.

“It is incumbent on every caring and thinking CNMI citizen to be focused on an immediate solution to this crisis, and Telesource is willing to do its part. Our interest stems from our commitment to the Commonwealth and from our strong belief that your new administration is in fact focused on finding solutions, not only for the power crisis, but for economic stagnation gripping the CNMI,” he said.

Zayed said Telesource will immediately draft a memorandum of understanding once the government considers the proposed buy-out.

The proposal came about as the government scrambles for more revenue amid an economic slowdown. The Fitial administration has revised revenue projection for the current fiscal year from $213 million to $198 million.

Despite its revenue shortfall, the CNMI government had to subsidize CUC so it could buy fuel for its engines. The government has given over $15 million to the CUC since former Gov. Juan N. Babauta placed the utility firm under his control through an emergency declaration.