More questions than answers

Posted on Jan 14 2000

It was the moment of truth. And as expected, most of those in the audience did not like what they had heard.

But board members of the Commonwealth Utilities Corporation, while not all of them, voted on the most crucial decision on a project that has come under a storm of protests since its procurement began almost three years ago.

Dozens of lawmakers, representatives of bidders and laymen attended yesterday’s board meeting which decided the fate of Saipan’s 80-megawatt plant, most of them leaving the conference room aghast — to say the least.

The discussion ended with more questions than answers on the controversial power project, which has attracted close scrutiny and aggressive lobbying by some of the bidders.

Gov. Pedro P. Tenorio, when informed about the decision to scrap the initial plan and build instead a 60-MW plant, declined to comment, saying he would await the official word from the government-owned utility corporation.

But not all the CUC directors agreed with the decision. Board member Jesus Guerrero expressed opposition to the plan to scale down the project and allow for a new round of bidding.

“I am one board member that does not want to allow this to happen. This has gone through thorough review. I have an obligation to answer to the public,” he told the meeting.

But CUC legal counsel Bill Ohle raised potential risks of more protests and litigation if the board would not cancel the initial request for proposal as new specifications on the project are not covered by its procurement regulations.

Another board member, Edward Sablan, asked about the next step after invalidating the RFP, to which he received no clear response.


A barrage of questions also came from Senate Floor Leader Pete P. Reyes, who is one of the most vocal critics of CUC’s handling of the project. At some point, he asked Board Chair Rosario M. Elameto to allow public comments before coming out with a decision.

But Ms. Elameto stood her ground — and received some of the harshest accusations from one of those attending the meeting.

Opposition to the board decision argued that undertaking another round of bidding would entail additional costs and could push the proposed bids up due to rising inflation and currency fluctuation.

According to Mr. Reyes, the study conducted by Burns & McDonnell — the basis of the board’s decision — failed to assess the impact of re-bidding the entire project as opposed to keeping the initial RFP.

“No one has expressed interest from CUC to work with us,” he told the board.

Senate Vice President Thomas P. Villagomez, who chairs the Committee on Public Utilities, Transportation and Communications, echoed his concern over the failure to meet with other government officials.

So did Rep. David M. Apatang, who used to head the House PUTC committee as he urged the board to reconsider cancellation of the RFP.

David B. Howe, vice president of top bidder Enron, maintained the decision was not in the best interest of the Commonwealth, noting that “the delay will cause more uncertainties.”

Wrong signal

Aside from risking a reliable power supply on the island, the cancellation will also send a wrong signal to outside investors who may want to come in and do business here, according to incoming Saipan Chamber of Commerce President Lynn Knight.

“We’re very concerned about the general investment climate and the delay will continue to hurt the investment climate,” she said.

Attending the meeting, Henry M. Sablan lambasted the board. “Shame on you. It’s a low day for us. It’s a low day for our businesses,” he said.

Another attendee raised accusations of corruption and not considering public interests. “CNMI has one of the highest power rates. I’m tired of paying high rates,” he said.

Sen. Ramon S. Guerrero, a former CUC executive director, said the board should have met with the Legislature before coming up with a decision and allowed public comments.

“[The meeting] is totally out of line. The chairperson doesn’t know what she’s doing,” he told reporters.

In a statement, Ms. Elameto dismissed the criticisms, saying that the costs of the project will be paid by the people for the next few years.

“It is natural that the bidders would be unhappy and we understand that the public is concerned about the cost of the project and the time it will take, but that is why we hired we hired Burns & McDonnell,” she said.

She also debunked claims that the new project will cost more and result in rate increase. “We relied on the independent evaluation of costs, not the statements of bidders trying to get a multi-million dollar project,” added Ms. Elameto.

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