RIGHT ON schedule, Energy World International/Pacific LNG (EWI) posted its bid security as a condition of its selection as the preferred bidder to construct Jamaica's much-needed 360-megawatt power plant.
The US$7.37 million bond, which was due yesterday, represents one per cent of the total cost of the baseload generating capacity project, which is US$737 million.
"This is an important step for Jamaica, as this 360-megawatt plant will deliver a long-awaited reduction in the cost of energy, which is crippling businesses and households alike," Energy Minister Phillip Paulwell said in a statement yesterday.
"I now encourage the OUR [Office of Utilities Regulation] to ensure that all future timelines are agreed and adhered to, and that Jamaica secures the lowest price possible for energy."
CHEAPER ENERGY A PRIORITY
The minister added: "Jamaica needs cheaper energy, and we need it urgently. The Government has made this a priority, and we will not be deterred from our pursuit of this critical objective. This development represents a small step along the path to that goal, and my ministry will be closely monitoring the ensuing activities and playing a facilitatory role, where appropriate, to ensure that progress is made without undue delay."
Paulwell is currently in Geneva, Switzerland, attending the inaugural meeting of the International Telecommunication Union's Smart Sustainable Development Model Advisory Board.
The OUR named EWI as the preferred bidder on October 4, after the highest-ranked bidder, Azurest-Cambridge Power, failed to meet the 15-day deadline to pay its security deposit.
EWI's inclusion among the list of four bidders has been shrouded in controversy, with Contractor General Dirk Harrison asking that it be excluded from the list, because its bid was facilitated after the cut-off date of March 15, 2013. However, the OUR hit back, saying that based on the informal nature of the process, it could lawfully accept and consider EWI's bid.
The Hong Kong-based company had proposed to use natural gas from its own gas fields in Indonesia and made an offer price of US$0.14.56 per kilowatt-hour.
EWI will now have to commence negotiations with the Jamaica Public Service for a power-purchase agreement, finalise a fuel-supply agreement for the project, as well as meet and present all the statutory requirements needed to achieve financial closure to allow for the commencement of construction. The company will also be setting up local offices.
According to the OUR, the submission of a bid bond is a security to indicate the preferred bidder's interest in pursuing the project. The bond is forfeitable if the bidder fails to proceed with the project, and refundable upon the successful completion of the project.
The next upcoming phase of the project is the posting of the five per cent performance bond, which will be due prior to construction. This is a guarantee against the entity's performance and, like the bid bond, is returnable and forfeitable.