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OUR power play: Regulator drags OCG to court over disputed report on 381MW project bid process

Published:Wednesday | September 17, 2014 | 9:00 AM
Harrison

Daraine Luton and Livern Barrett, Gleaner Writers

The Office of Utilities Regulation (OUR) has sought leave for a judicial review of a controversial report presented by the Office of the Contractor General (OCG) which, among other things, led to one multilateral agency refusing to provide non-equity funding to the company selected as the preferred bidder to undertake construction of a 381-megawatt power plant on the island.

"The report makes it appear as if the Office of Utilities Regulation is at least incompetent, if not corrupt," a source close to the case told The Gleaner.

Lawyers representing the OUR, which led the procurement process for the power plant, as well as counsel for the Dirk Harrison-led OCG, Energy Minister Phillip Paulwell, and Energy World International (EWI), appeared in the Supreme Court yesterday for a hearing into the matter.

Solicitor General Nicole Foster Pusey appeared on behalf of Paulwell and indicated that the minister would seek to join in the matter should the application for leave be granted.

The case has been adjourned until October 7. The OUR is seeking to have the report of the contractor general set aside.

The OUR is contending that there is no basis for most of the conclusions that have been reached by the contractor general. It is also contending that the contractor general improperly interpreted the procurement rules.

The contractor general's office yesterday said it would offer no comment on questions posed by The Gleaner "as the matter for which the questions relate is subject to adjudication by the court".

In its September 2013 report on the Right to Supply 360 Megawatts of Power to the National Grid, the OCG said the inclusion of EWI in the process was flawed.

"Based upon the documentary evidence which was reviewed, it is clear that the 'goalpost' kept moving to facilitate EWI's proposal, and that the process in its current form could not stand up to review, given, inter alia, that an extension was allowed after the expiration and the evaluation had already concluded," the OCG said in its report.

"In this regard, 'the playing field was not level', as preference was given to facilitating the receipt of one other proposal from EWI," the report added.

EWI LOOKING ON

Attorney-at-law Abe Dabdoub, who is representing the Hong Kong-based EWI, said his clients "heard about it (suit) and they asked me find out what's going on".

Added Dabdoub: "We are watching to see what is the position … . Remember, EWI was affected by the report of the OCG, as it caused the Inter-American Development Bank (IDB) to withdraw funding for the 381-megawatt project."

He said the outcome of the matter would have implications for EWI, but "what this is we don't know yet.

"We have to see what the application is and what it's based on," the attorney said.

Subsequent to the publication of the OCG's report, the OUR issued a point-by-point rebuttal of the claims that were made. The regulator said the OCG's adverse findings and conclusions regarding its actions "are patently incorrect and unsupported by the requirements of government policy and the law".

"The OCG, in this instance, has displayed, at best, a deficit of understanding of how the Government's procurement guidelines would apply to this process or apparently had a preconceived notion of process and, therefore, found it expedient to redefine an informal process into a formal one to make the case," the OUR had said in a response to the report.

EWI emerged second preferred bidder after Azurest-Cambridge failed to pay its bid bond for the project.

EWI's licence was eventually revoked by the Government after it, too, failed to come up with the US$37-million performance bond to undertake the US$737-million project.

Therese Turner-Jones, the IDB's representative to Jamaica, told The Gleaner in April that the contractor general's report had a bearing on its decision not to provide funding for the project.

"A country like Jamaica really needs to pay attention to trans-parency and good procurement practices. We have been giving advice on that area, and we would be hard-pressed to not follow our own advice," she said.

At the close of business on March 15, 2013, the deadline for submission of bids, the OUR had received five unsolicited proposals, with the exception of EWI, which was brought into the picture after Paulwell, upon the instructions of Cabinet, submitted a letter to the OUR, which was sent by EWI indicating its interest.

The OCG said the process which the OUR adopted after the established cut-off date of March 15, 2013, and the conclusion of the evaluation of proposals received prior to the cut-off date, to facilitate the acceptance of the EWI proposal, were "unfair and irregular and a clear breach" of Jamaican laws, including the Contractor General Act.

"The acceptance of EWI's proposal, following the conclusion of an evaluation process, and not subjecting its proposal to the same rigours of that which was brought to bear on the other proposals, is irregular and unfair," the OCG had said.