CUC approves a 2nd look at bids

The Commonwealth Utilities Corporation agreed yesterday to conduct a second round of reevaluation on the new 80-megawatt power plant on Saipan in a move to muffle protests that have dogged the project for the last eight months.

CUC officials also hope to forge an agreement with an independent power producer by June, exactly a year after they chose Japan’s Marubeni Corp. and its US partner Sithe Energies, Inc. to build the $120 million project in a decision opposed by other bidders.

In a brief meeting, the board of the government-owned utility voted to extend to the next step the services of Burns & McDonnell, a private engineering firm hired by CUC last January to undertake the independent review following protests against an in-house selection process.

“The intent here is to try to resolve some of those ongoing protests that are still with the public auditor basically so that we can move forward with this,” Executive Director Timothy P. Villagomez told reporters after the meeting.

Apparently under pressure to expedite the long-stalled project, board directors also prodded the evaluating firm to complete its task within six weeks, although Burns & McDonnell representative has said it could take about two months.

CUC Chair Juan S. Dela Cruz stressed eight weeks is “reasonable,” adding that “we don’t want to push them. We want to make sure that they really review in a proper manner in trying to get the best and final offers.”

Nine proposals on the list

Burns & McDonnell last week completed its initial reevaluation, narrowing down 13 original proposals to nine that fell within the “competitive range,” including PMIC-Ogden whose complaint over its exclusion during the CUC process was the basis of the fresh review.

In its report, the Kansas-based company said the second round will involve assistance in the preparation of a bid package, establishment of minimum technical requirements, developing pricing forms, review draft of power purchase agreement and evaluation of best and final offers.

CUC also will eliminate the proposals on water desalination facility which was included in the original request that was issued in 1997 due to a shift in the direction of the project to focus solely on the power plant.

Marubeni-Sithe, whose deal with CUC was canceled pending results of the independent review, topped the initial round, ahead of Enron, Hawaiian Electric and the Alsons consortium.

Utility officials have hailed the Burns & McDonnell’s findings as reaffirmation of the management’s decision to negotiate a final accord with Marubeni-Sithe in June last year.

But an Enron official maintained the first round was not an indication that their competitor has the best and final offers as the next phase covers proposals largely different from the initial submission.

“Obviously we think it provides depth to the people of Saipan to have a complete independent review for the entire bid process,” Enron Vice President David B. Howe told reporters.

He said the second phase “is the right step,” adding Enron is “simply asking that the playing field be leveled and that all the issues be reviewed properly.”

Yesterday’s board decision came amid mounting calls from Gov. Pedro P. Tenorio and other government agencies, such as the Attorney General’s Office, for a complete review, viewed as a means to deal with the protests.

Touted to be the largest deal ever in the CNMI, the power plant is projected to meet increasing power demand on Saipan. It will be constructed through the build-operate-transfer scheme under a 25-year accord.