Fitial asks OIA for $3.8M to fund CUC repairs

Gov. Benigno Fitial has written to Office of Insular Affairs director Nikolao Pula requesting $3.8 million to rehabilitate engines at the Commonwealth Utilities Corp’s main power plant.

In the letter Fitial details the plan and process CUC will undergo to fix the engines and why more funding is necessary. In September Pula had written Fitial asking for a more detailed plan on the use of funds.

“To clarify, CUC’s request for additional $3.8 million to fund continuing rehabilitation efforts for Saipan Power Plant 1 engines is prompted by CUC’s inability to fund major repairs of PP1 engines from its own limited working capital resources,” Fitial wrote.

Fitial notes that CUC did enter into a contract with DCM to repair six of the eight engines at Power Plant 1, but that on July 10, 2008, the contract was terminated because the engines were not repaired. Only $410,000 was paid out of the $5.4 million contract at the time of the termination, he said.

“As stated earlier, in that CUC’s working capital resources were insufficient to have funded for any major repairs, CUC would have required financial assistance to pay for the balance of the contract if [the] contractor’s performance was unsatisfactory,” Fitial wrote.

In January 2007, Fitial wrote to then U.S. deputy assistant secretary for Insular Affairs David Cohen proposing that the utility company would be able to make the necessary repairs with the $6.4 million that OIA had previously given CUC. But in his most recent letter, Fitial said, “working capital resources were insufficient to allow for funding any major repairs.”

CUC executive director Antonio Muña said the $3.8 million, along with leftover money, would total $5.4 million, enough for the necessary engines to be repaired.

Fitial said that during the next 10 months CUC would focus on repairing engines 1, 5 and 7, which if fully rehabilitated, will provide 26 megawatts of power.

In his letter to Pula, Fitial also attached an earlier job announcement and description for the position of deputy director for Utilities Systems Rehabilitation, who will focus on power generation and distribution during the rehabilitation process.

Wallon Young is listed as the employee on the job announcement and description sent to OIA. Muna is listed as the immediate supervisor and executive director. CUC could not comment on the hiring until details were worked out.

Off-island media have reported that CUC hired Young, as part of the Quantum Pacific, in January 2007 to develop short-, medium- and long-terms goals to the power problems. Top officials of Quantum Pacific are all former employees of the American Samoa Power Authority. The $250,000 contract was initially for three months, according to reports that quoted company official Gerhard Sword.