Rota engine’s $160K freight cost slammed

Rep. Edwin K. Propst (Ind-Saipan) described the $160,000 freight cost for a used 2-megawatt generator set for Rota as “unacceptable and unbelievable”—an amount that Sen. Paul A. Manglona (Ind-Rota) also called “just unbelievable.”

Speaking during a Commonwealth Utilities Corp. board meeting yesterday, Propst questioned the estimated freight cost for the emergency purchase of a used 1992 2-megawatt generator to provide reserve power on Rota.

Manglona urged the CUC board to take a step back with the emergency purchase because the electric power situation on Rota now is different from a month ago.

CUC chair Miranda V. Manglona assured Propst that what she had in mind as a representative of Rota was that CUC does not put a price tag on the community of the island.

Miranda Manglona said they want to procure that generator as soon as possible because Rota was then experiencing power outages and that it doesn’t matter who the vendor is.

“What we had in our mind is the community of Rota. We don’t want Rota continue to have all those outages,” she said, assuring Propst that they are going to diligently do their job with the guidance of the Office of the Attorney General.

As for Sen. Manglona’s comments, she said they are confident that the OAG will steer them in the right track.

CUC’s procurement officer Manny Sablan, power generator manager Richard Cano, and contracting officer John Mafnas explained to the board about how the quotations were made to the vendors for the emergency purchase of the generator and the $160,000 freight cost.

The $160,000 that is for unit and equipment freight cost and apparently includes logistics—not just for shipping.

CUC director Matthew Holley said he has a concern with the emergency purchase that he wants to discuss during their executive session.

When Saipan Tribune left the CUC conference room, the directors were still in executive session about the emergency purchase as well as about executive director Gary P. Camacho’s employment contract.

During the meeting’s public comments portion, Propst said the contract that is on the table right now is to purchase a used 2-megawatt generator in the amount of $690,000 to provide reserve power to Rota.

Propst said the breakdown of the cost includes several factors and there are a few where he has some concerns, but perhaps none as great as the cost for unit and equipment freight, which will cost CUC ratepayers $160,000.

“This is unacceptable and unbelievable,” he said. “And I say this because, if you have ever done any freight forwarding, or even if you talk of grocery stores that ship in containers from the [U.S.] mainland to Saipan, the cost is less than $10,000. That’s for frozen goods.”

Propst said they know that it doesn’t cost anywhere in the neighborhood of $160,000 and that was the first red flag.

He said the actual cost for a 40-foot container from the U.S. mainland to Saipan without refrigeration requirements is about $8,935. He said it will take 90 days together to bring a 40-foot container from the United States to the CNMI.

Propst said his understanding is that the reason why it’s going to cost $160,000 is because this includes the rental of a crane. The lawmaker said CUC ratepayers should not have to pay for the rental of the crane.

“No ratepayers should pay for that cost,” he said.

That cost should be borne by the Commonwealth Ports Authority if it refuses to ensure that Rota Terminal & Transfer, which operates stevedoring services on Rota, would pay for it, Propst said.

He pointed out that, based on Rota Terminal’s contract, they are required to provide that crane service. “However, they [could] not because [their crane is] broken. …Whatever their excuses,” he said.

“But this is not only impacting CUC. This is impacting the people of Rota, [who are] trying to get medical supplies, rice, and other things,” he said.

Propst said he certainly does not want to ever take a chance to see that the people go without power on Rota. “We understand the importance of getting reserve power. However, there are other options.”

One, Propst said, there is a 1.5-megawatt backup Caterpillar engine on Rota right now that just needs to be fixed. “From what we have been told, the parts and everything to fix this and rehabilitate this Caterpillar engine is already here on Saipan,” he added.

Once the parts are brought to Rota, CUC mechanics can work on it and get it operational again, Propst said.

“So, if the crane is working and if we can get a ship to bring this is in for a reasonable price, then we should do it,” he said.

Propst said a shipping operator that they talked to stated that they can bring a 40-foot container to the East Harbor on Rota for a mere $14,500. “A mere fraction of what we are talking about,” he pointed out.

The other concern, Propst said, is that there has been a notice-to-proceed to purchase a brand-new engine for Rota. He said the total cost for this brand-new engine is $315,000.

Propst said this engine was approved by the board at the end of January and that the contractor said it would take two to four months to bring here.

“Tthis brand-new engine that CUC has already procured…will be the main source for power of Rota, from what we have been told,” he said.

Propst suggested that CUC can perhaps call this company and tell them that there is a dire need for Rota to have power and request to get this new engine earlier. This is still going to save CUC a lot of money, he said.

“$690,000 for a reserve unit that’s a used unit…is a concern because, as we all know, we are faced with a $26-million deficit right now,” Propst said.

Citing past CUC deals, Propst said there are “bad actors” that are coming to CUC that have tried to make a fortune. Propst said CUC should have debarment rules and regulations to stop these “bad actors” from bidding on contracts.

“Please understand that I come here not to oppose you or to attack or demonize you. That’s not my point. I am actually here to plead with you,” he said.

Sen. Manglona said CPA executive director Christopher Tenorio informed him Monday that CPA has approved the opening of East Harbor for shallow draft shipping vessels to accommodate the shipping services needs of the people of Rota.

Manglona said Tenorio disclosed that CPA obtained the approval from Rota Mayor Efraim M. Atalig, who has jurisdiction over this harbor.

“That’s a significant development because these vessels can actually carry at least two 40-foot containers,” the senator said.

“This $160,000 is really just unbelievable. Even all the way from the East Coast, it is still too much for us to bear,” he said.

Manglona also discussed the repairs done on the generators on Rota.