Panel sets hearing on power project

Posted on Mar 03 1999

The House committee on Public Utilities, Transportation and Communications is set to conduct a public hearing on the new 80-megawatt power plant on Saipan to determine whether the government should back up the project that has been mired in controversy.

PUTC chair Rep. David M. Apatang yesterday said the town meeting is likely to be held this month as part of the committee’s review of a proposed legislation seeking full faith and credit guarantee on the $120 million plant.

So far, the bill has met unfavorable response from some government agencies, including the Office of the Public Auditor and the Commonwealth Development Authority, due to its possible negative implication on the government action.

“Most of the opinions of government agencies are not in favor,” Apatang said in an interview, “that is why we need a public opinion on this bill.”

The proposed measure, initiated by Sen. Thomas P. Villagomez who chairs PUTC in the upper house, seeks support for the bid of a conglomerate chosen by the Commonwealth Utilities Corporation and requires CNMI government to assume all financial liabilities should CUC fails to meet its obligations.

Marubeni Corp. of Japan and its U.S. partner Sithe Energies, Inc. were awarded the contract in June last year to build the new power plant — a decision that has drawn protests from other competing companies.

Under the controversial deal, the contractors will operate and maintain the Saipan plant to produce electricity for purchase by CUC for the next 25 years, after which the government-owned utility firm will assume ownership.

The government guaranty is necessary as part of the build-operate-transfer scheme of the project touted to be the largest deal ever in the Northern Marianas.

“Because they are asking for government backing for the power plant, we need to get the public opinion before acting on the bill,” Apatang said, adding his committee is expected to deliberate the merits of the proposal by April.

While CUC has hired an independent engineering firm to reevaluate all proposals of the 13 companies offered for the project, the legislature has opted to intervene and resolve problems facing the crucial project.

The plant, designed to address increasing power demand on Saipan by the next year, has been stalled for the last seven months due to mounting opposition lodged by other bidders.

OPA has held off action on the protests of close competitors Enron and the consortium of Alsons, Tomen, Singapore Power and Tan Holdings Corp. pending result of the fresh round of review which began last January.

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