Political decisions for select few and not island community

The recent letter submitted to the Tribune by Mr. Richard Reddy, CEO of Pacific Petroleum, divulged the important particulars that demonstrate how the politics exercised by the CUC board and Juan Babauta since the inauguration in January 2002 are responsible for the rolling black outs and the serious dilemma regarding power for the island community.

The Request for Proposals for the CUC contract for fuel went out at the onset of 2005 because Mobil Oil of Marianas contract was due to expire on April 30, 2005. Approximately one month after the RFP’s went out; the Tribune ran a story discussing how Mobil Oil asked CUC to make changes to the fuel supply RFP. Apparently, those changes were made by CUC and specifically for Mobil Oil.

In Mr. Reddy’s letter, he indicated that Pacific Petroleum bid for the fuel supply in 2002 prior to the signing of the two-year contract by Mobil that expired on April 30, 2005, but the bid was “not considered” because it was deemed “unresponsive” due to a technicality in the manner it was written. The bid was apparently $1 million lower than the competition.

What is interesting to note is that approximately seven companies picked up the RFP for the fuel contract with Mobil, and only one bid was submitted. Is looking at just one bid considered a bid process for a government and/or one of its agencies?

According to Mr. Reddy, his company did not bid simply because it was “totally one-sided” and only the current supplier could have won the bid.” This appears to defeat the whole purpose of a bid process. Typically, a governmental bid process involves several and the contract generally goes to the lowest qualified bidder.

Three weeks after the April 30, 2005 contract with Mobil Oil expired; Juan Babauta declared a state of emergency and superceded the authority of the Board for CUC. The state of emergency declaration included water and sewer, as well.

Approximately one week later, the media was told bargaining talks with Mobil Oil would commence. Exactly one week after the talks began, a formal fuel contract retroactive from May 1, 2005 until May 1, 2007 was signed that gave Mobil the exclusive right as fuel provider.

Ramon “Kumoi” Guerrero recently told the Legislature that the rolling blackouts were staged. It appears that the push and ultimate signing of the contract with Mobil Oil was also staged by Babauta.

In Mr. Reddy’s letter to the media, he computed the cost savings CUC would have realized had they gone with his company. A review of how much would have been saved follows: $6 million a year using LSWR; $9.6 million ($800,000) using new generators using 50 percent less fuel than the present generators; $500,000 a year in gas for government fleet automobiles. If we add up all of the savings, we come up with a grand total of $15,650,000 per year.

Had the CUC gone with Mr. Reddy’s organization in lieu of Mobil Oil when Mobil signed their two-year contract with CUC in May 2003, then there would have been a total savings of $31.3 million. The actual total savings would be after the cost of new generators was deducted.

If the abovementioned savings were realized, then the overall situation involving the multi-million dollar debt to Mobil Oil and issues surrounding the ailing generators would be resolved and not be a major issue.

In July 2003, the CUC board approved of the privatization of power plants in the Lower Base. The Senate Committee on Utilities, Transportation, and Communication subsequently voiced their backing for the CUC decision.

Immediately following the 30-day state of the emergency declaration, Babauta requested an extension on taking charge of CUC. Shortly thereafter, a presentation by was made by Dennis Swann, a consultant CUC, to substantiate the “privatization.” The question now is, “Will Babauta handle the privatization issue like he handled the Mobil Oil contract for fuel? The answer to this question is: More than likely.

According to Mr. Reddy, since CUC has to purchase fuel from the Mobil Oil regardless of whether or not they privatize, they are bound by the pricing formula CUC agreed to.

Since Babauta became governor, the CUC has been marred with controversy from not being consistent with paying Mobil $8.5 million for the fuel to run the generators and, as a result, there have been numerous blackouts island wide. Had Babauta opted for what was presented by Mr. Reddy and Pacific Petroleum, then the situation would be totally different simply the amount of money saved over the past several years would have kept CUC from being in a hole too deep for them to climb out.

Timothy Villagomez, House Vice Chair, and running for Lt. Governor on the Covenant Party ticket, mentioned to the media that prior to his departure at CUC, there was a surplus of roughly $20 million. Since the CUC is a public agency, the Office of the Public Auditor should investigate to ascertain whether or not there were improprieties in terms of the handling of the funds, as well as where did the funds go?

The “politics” exercised by Babauta involving CUC are responsible for the rolling blackouts and not saving the residents of the island community millions of dollars in terms of fuel and generators.

The decisions made by Babauta regarding fuel contracts and privatization of CUC, as well as the questionable contract given to the company of a Water Task Force member, have all been political and it is evident that those who are benefiting from these decisions are only a select few and not for the entire island community.

The electorate must remind themselves when they go to the polls in November 2005 that gubernatorial leadership supporting all is mandatory and expected. When gubernatorial leadership supports only a select few and turns a blind eye to the people they are obligated to serve faithfully, then it is time for a change that will be more in tuned to the needs and best interests of the entire island community.

Dr. Jesus D. Camacho
Delano, California