CUC determines 2nd review of bids today

Amid mounting clamor for a complete review, the Commonwealth Utilities Corporation decides today whether to allow an independent evaluator to finish its task of selecting the “best and final offers” among various proposals for the new power project on Saipan.

The Attorney General’s Office has already recommended a second round on the review process being conducted by Burns & McDonnell, a private engineering firm hired by CUC in January to reevaluate all 13 proposals initially submitted for the project.

The board of directors of the government-owned utility firm is set to meet this morning to vote on whether they will allow the next evaluation phase or award the $120 million contract to Marubeni-Sithe which topped both a CUC selection process and the independent reevaluation.

But CUC Chairman Juan S. Dela Cruz said it is more likely that they would follow the AG’s recommendation and extend Burns & McDonnell’s services to complete its review.

“That’s a legal opinion and the board should comply with it to have a second round of evaluation,” he said in an interview.

The utility official also said the board is awaiting an opinion from the Office of the Public Auditor to guide their next action after the Kansas-based engineering company concurred with the earlier findings of CUC.

The Japanese industrial giant Marubeni Corp. and its US partner Sithe Energies, Inc. earned a superior rate from Burns & McDonnell in the first round that determined a “competive range,” ahead of Enron International and Hawaiian Electric.

Last June, an in-house selection committee chose Marubeni-Sithe over other proposals in a controversial decision that drew opposition from Enron and the Alsons consortium, alleging incompetence of the CUC management and technical deficiencies in the winning bid.

The utility firm has called off the deal while the independent evaluation is being undertaken as recommended by OPA. The public auditor has also withheld actions on protests lodged by competing offerors until the fresh review is completed.

“What CUC did is almost the same with the evaluation of the independent firm,” Dela Cruz said.

Shrugging off attempts by some quarters to undermine Burns & McDonnell’s work, the CUC chair said the board is satisfied with their performance.

The engineering company was paid $49,000 to reevaluate the project proposals and has an option to do the second round for additional $50,000 should the board decide to hire them again.

“We are still on the right track,” Dela Cruz explained. “Our main concern is to expedite this project and to make sure that we can make a decision for the second phase of this project. It’s better to do this so we will have less complaint from other companies.”

Designed to meet increasing power demand on Saipan by the end of the decade, the 80-megawatt power plant has been stalled in the last eight months due to the protests.

It is touted to be the largest deal ever in the CNMI, involving an independent power producer which will build and operate the plant under a 25-year agreement after which CUC will assume ownership.