Reyes presses CUC to award Saipan power plant contract

The Commonwealth Utilities Corporation must immediately award the controversial Saipan power project to a top bidder as a review by independent experts is sufficient to assure the government of getting the best proposal, according to a legislator.

Senate Floor Leader Pete P. Reyes urged CUC board to cut short a three-month extension it sought for further review of the recommendations by Burns & McDonnell, to begin laying down the groundwork for the construction of the 80-megawatt plant.

“A winner has been declared, so let’s bite the bullet and get on with the award,” he wrote in a three-page letter to Board Chair Rosario M. Elameto.

The board, CUC’s policy-making body, is scheduled to meet tomorrow where the long-stalled project is the only item on the agenda.

While relieved by the report from the private engineering hired by CUC to re-evaluate all proposals, Reyes expressed concern on the decision to hold off selection of a final contractor.

“I’m sure that such extension has no hidden motive and agenda,” he explained. “It is my personal opinion, however, that no further evaluation is required, otherwise why spent thousands of dollars to hire evaluators and then subjectively reevaluate its work once again?”

Last month, the Kansas City-based firm made public its findings of a months-long review of various bids which has countered an earlier CUC’s choice to award the $120 million contract to Marubeni-Sithe.

Enron, the Tomen consortium and SPP/HEI joint venture edged out Japan’s Marubeni Corp. and its U.S. partner Sithe, Energies, Inc. based on the scores of Burns & McDonnell, but utility officials delayed selection of a contractor pending further review of the project.

Credible and fair

Reyes believed the independent evaluation gave the procurement “credibility and fairness” as opposed to the job conducted by CUC’s in-house selection committee last year. He said the evaluation is enough to safeguard the interest of power consumers.

Saying he is not supporting any particular company or joint venture, the senator explained the top bidder should be awarded the contract as it is best responsive to the criteria, such as technical requirements and financing.

“It makes a lot of sense that the top rated company be awarded the contract as soon as possible so that the preparatory efforts required for the long-term construction of the power plant could be started at the earliest possible time,” said Reyes.

He also underscored the need for such a decision now in fear of another delay that may “permanently frustrate” any contractor from accepting the award in view of long procurement process.

Likewise, Saipan may face serious power outages without guarantee of efficient source of electricity, according to the senator. The board, however, has hinted at scaling back the project due to the economic crisis confronting the island that has reduced demand in recent months.

“The award of the power plant contract will be in the long term interest of the CNMI, and must be exercised at the earliest time to prove that the CNMI is a responsible government which honors its commitment for fairness in the exercise of its procurement practices,” added Reyes.

Designed to meet power demand on Saipan by the next millennium, the project — touted to be the largest ever on the island’s history — has stalled for more than a year in the wake of mounting opposition against the choice of Marubeni-Sithe in June 1998.

The board’s meeting on Friday will determine the fate of the project whether it will stay as it had been initially planned, and whether it would undertake final negotiations with the top bidders prior to an award.