SAIPAN POWER PROJECT DELAY Reyes threatens to conduct oversight hearing

Posted on Oct 12 1999

Senate Floor Leader Pete P. Reyes has threatened to conduct an oversight hearing on the Commonwealth Utilities Corporation if the utility firm fails to award a contract for the $120 million Saipan power project by Oct. 16.

He reiterated the offers made by various power firms vying for the project have until Saturday to stay valid, as he warned CUC against changing the initial requirements when the request for proposals was issued two years ago.

Reyes lamented the apparent silence by the utility corporation on the status of the project — considered the largest undertaking ever by the government — which has fueled speculation of plans to downsize its capacity to less than 80 megawatts.

“What is so hush-hush about the project that is going to be funded by public money,” he asked, adding his Sept. 29 letter to CUC Chair Rosario M. Elameto merely raised these issues prompted by the delay.

“I am not accusing anybody of wrongdoing. I am just saying that it’s about time that they should address the problem and award the contract,” the senator said in an interview last Friday.

Responding to Reyes’ concerns, Elameto has assured him that an action from the board is expected by tomorrow when CUC directors meet for the first time in two months to tackle the recommendations from an independent evaluator.

She also maintained the board has taken this long to review the report made by Burns & McDonnell, which CUC hired in January to deal with protests against its procurement regulations, in a move to “carefully consider the benefits and risks” of this project.

But Reyes, who at that time of the interview was unaware of Elameto’s letter dated Oct. 8, underscored the need to come up with concrete plans before this Saturday deadline set out in the RFP.

“If it naturally dies out on Oct. 16 and they don’t act, I am going to strongly recommend an oversight hearing on this to be conducted by the Senate. I’m going to get to the bottom of it,” he said.

Although the senator could not be reached for comment on the latest assurance from CUC as yesterday was a national holiday, he stressed that he would call the oversight if the project still hangs in the balance.

“Anything that will change the ‘specs’ on the original bidding is going to be looked at as trying to avoid (the issue),” Reyes explained. “The 80 MW plant is a correct assessment of the power demand on Saipan, (CUC) has made that evaluation and I am convinced that that is correct.”

The government-owned utility firm has been under pressure to expedite resolution of legal questions that derailed the awarding of the contract and the construction of the plant for more than a year now.

To be constructed through the build-operate-transfer scheme, the new power plant was supposed to begin construction late last year under the initial schedule of its operations set by next year.

But mounting protests lodged by competing companies opposed to the board’s choice of Marubeni-Sithe as its contractor has pushed back the project as CUC was forced to hire independent experts to reevaluate all 13 proposals.

Burns & McDonnell will formally announce results of its second phase of review during tomorrow’s board meeting, which will form the basis of any decision from CUC’s policymaking body.

“Speed it up and let’s get our money’s worth,” said Reyes.

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