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Paulwell signs EWI licence ... but Zacca wants to know more

Published:Wednesday | April 16, 2014 | 12:00 AM

 Richard Browne, Business Reporter

Energy World International (EWI) has been given the official green light to supply 381MW of generating capacity to the Jamaica Public Service, using natural gas as fuel source, with the signing of the licence by Energy Minister Phillip Paulwell.

Paulwell's Ministry of Science, Technology, Energy, and Mining (MSTEM) yesterday confirmed that the licence had been finalised and was issued on April 4 but was amended and restated on April 14 "to provide for some negotiated changes as well as to include a draft implementation agreement between the Government of Jamaica and EWI".

EWI has 10 days from the April 14 to pay US$37 million as a performance bond or risk losing the US$7 million that it previously posted as a bid bond. It also has 30 days from the signing to provide the Office of Utilities Regulation with a fuel-source plan and a further 10 days to indicate the price, The Gleaner reported in March.

The MSTEM announcement did not come soon enough to prevent the Private Sector Organisation of Jamaica (PSOJ) from raising questions about the project's status, however.

In a luncheon address to the Kiwanis Club of Kingston yesterday, Christopher Zacca, PSOJ president, said it was "unacceptable" that for "over two weeks now, we have heard nothing more on this licence".

QUESTIONS FOR PAULWELL

The project had been "mired in controversy and a lack of transparency," Zacca said.

He said he had three questions for Paulwell. While the first two questions on whether the licence had yet been signed and on what date, had been answered, the third had not.

Zacca wanted to know if the licence contained "critical safeguards", especially the five per cent performance bond.

The licence and the draft implementation agreement will be made public after Paulwell meets "very shortly" with the Energy Monitoring Committee (EMC), the MSTEM said in its statement yesterday.

The licence was to include safeguards on areas such as financing, construction timelines, and fuel arrangements, plus a five per cent bond within 10 days of the effective day of the licence, Zacca said.

The PSOJ views the safeguards as "essential and non-negotiable". Zacca said, "We want those safeguards in the licence to ensure those promises are kept."

The project is to be implemented over a period of 26 months so that "by mid-2016, customers of JPS will already be benefiting from reduced electricity cost", the statement said.

Other benefits include "fuel-source diversification to reduce the country's vulnerability to volatile oil prices; significant reduction in the country's carbon footprint towards a cleaner energy future, improved business competitiveness; and accelerated job creation," the release said.

The PSOJ president is happy that Paulwell has "assured us that the EMC will remain in place for the remainder of the project as it can provide more transparency".