Investor says govt should get 2 fuel suppliers

A business representative questioned the CNMI government’s decision to award a fuel contract for the Commonwealth Utilities Corp. to only one supplier.

Richard Reddy, chief executive officer of Pacific Petroleum Corp., said it is in the best interest of the government to secure two suppliers to ensure competitive pricing and uninterrupted supply.

“It just doesn’t make economic sense if you limit yourself to only one supplier, especially if you’re a public utility. If you have two, you have the bargaining power and it works to your benefit. Now, I don’t understand why the government continues to refuse other suppliers like us,” said Reddy in a recent interview.

CUC gets its fuel supply from Mobil Oil Marianas.

PPC had lost the CUC fuel supply contract to Mobil over two years ago. This year, PPC said it did not submit an RFP to CUC, alleging that the contract terms were weighed in favor of Mobil.

Reddy, at the same time, said that it had submitted different proposals to CUC over the past three years “to save them money through lower cost of fuel and even plans on how to buy new generators that use 50 percent less fuel than the existing CUC plants.”

Reddy located his business office on Saipan in 2001.

Over these years, he said that he had approached all government officials, from the Legislature to the Governor’s Office and CUC, to show how the government could save on its fuel purchases.

“I’ve presented my proposals to them, the speaker, the Senate president, the Lt. Governor, the governor but I never heard from them again,” he said.

Recently, he said that he met with Lt. Gov. Diego T. Benavente after the governor declared a state of emergency.

Reddy said his proposal two years ago was $1 million cheaper than Mobil but he lost. This year, he said that he could save CUC $200,000 to $400,000 a month in fuel costs.

“We have many suppliers in Australia and the Orient and can select for a given delivery wherever we get the best availability or price,” he said.

CUC had said that Reddy’s company proposal two years ago was “non-responsive” to CUC’s Request for Proposal and was therefore “not susceptible to evaluation.”

CUC, in particular, said that the company did not provide for delivery to Tinian and Rota and the price for such service, nor did it accept CUC’s payment terms.

Reddy said he has relocated to China after spending unproductive years in the CNMI. He still comes to Saipan and keeps his business office here “because I consider it my home.”

Reddy said he first knew about the CNMI when he was a mechanic engineer for Mobil Oil Marianas (Guam) from 1984 to 1989.

“I have personal knowledge of how things operate here on the islands,” he said.

Reddy said he holds a degree in chemical engineering.