Report on power project due out today

Posted on Mar 08 1999

The Commonwealth Utilities Corporation is set to receive today a preliminary report from a private engineering firm hired to reevaluate proposals on the controversial power project on Saipan after more than a month of review.

Board director of the government-owned utility firm will review the draft report in a meeting tomorrow to decide whether to conduct another round of review for final determination of the contractor to build the new 80-megawatt power plant, according to CUC officials.

There is no indication, however, of which proposal among 13 companies has emerged on the top in a statement sent to news agencies on Friday.

Board chair Juan S. Dela Cruz expressed hope the results, based on a “blind” evaluation of all offers initially submitted for the project in 1997, will satisfy any remaining concerns on the awarding of the $120 million contract.

Kansas-based engineering firm Burns & McDonnell was hired by CUC in January to do the independent reevaluation following mounting protests on its decision to forge an agreement with Marubeni Corp. of Japan and its U.S. partner Sithe Energies, Inc.

The project, aimed to address serious power shortage on Saipan, has stalled in the last seven months due to legal snag disputing the initial choice from other companies bidding for the plant, prompting the public auditor to step in and order the fresh round of review.

“It is critical that we begin construction at the earliest possible date,” Dela Cruz said in a statement. “Further delay may put us in a situation like Guam was in a few years ago with daily power rationing and frequent outages.”

Burns & McDonnell, which received $49,000 in payment of its services, is expected to complete its initial review “as soon as possible” to expedite resolution of the problems, said Kay Delafield, a CUC officer handling the review.

Under the agreement, the U.S. engineering firm would establish a “competitive range” among the various proposals and a second round may be optioned by CUC if board members decide to conduct a final determination of the project contractor.

There is no specific time frame, however, as to when the contract will be awarded. The deal with Marubeni-Sithe, forged last June after an in-house committee selected the company, was called off pending results of the independent review.

The power plant, initially scheduled to start construction by last December through the build-operate-transfer scheme, is designed to meet increasing power demand on the island by the end of the decade.

Touted to be the largest deal ever undertaken in the CNMI, there has been attempt from the legislature in the past few months to resolve the snafu by backing the Marubeni-Sithe proposal.

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