Sun | Mar 24, 2019

Gov't plea for EWI - State considers approach to IDB as loan rejected for 381MW project

Published:Tuesday | April 29, 2014 | 12:00 AM
Audley Shaw - FILE
Phillip Paulwell - FILE
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THE JAMAICAN Government is contemplating making an approach to the Inter-American Development Bank (IDB) to ask that it respond favourably to a loan request from Energy World International (EWI).

The loan being sought by EWI is to provide non-equity financing that would enable it to build a power plant and supply 381 megawatts of generating capacity to the national grid, using natural gas as the fuel source.

As news emerged yesterday that the IDB did not intend to grant financing to the EWI, it was not clear on what basis the Government would be approaching the multilateral to secure a loan for the private entity.

The IDB has reportedly stalled on the loan because of concerns raised in a September 2013 special report of the Office of the Contractor General, which said EWI was unfairly included in the bidding process to provide baseload capacity to the grid. Checks by The Gleaner yesterday revealed that the IDB was last week asked by EWI to respond to the loan request.

The Hong Kong-originated EWI has missed its deadline to pay over a performance bond of US$37 million within 10 days, which expired last Thursday night.

It has already paid over a US$7.37-million bond, which represents one per cent of the total cost of the US$737 million project, and is relying on the IDB to provide loan financing to undertake the project.

In the report of its special investigation, the OCG said it was unable to concur with the OUR that the process used to include EWI in the bidding process was in keeping with the treatment of unsolicited proposals allowed for in the procurement guidelines.

It said the decision of the regulator to facilitate the acceptance of the EWI proposal was unfair and irregular and a clear breach of the law.

It said the acceptance of EWI's proposal following the conclusion of an evaluation process, and not subjecting its proposal to the same rigours of that were brought to bear on the other proposals, was irregular and unfair.

The report stated that the improper intervention of Energy Minister Phillip Paulwell, and the consequent acceptance of the EWI proposal by the OUR, was unfair and compromised the integrity of the process.

The OUR, however, countered, saying the process used to include EWI in the bidding was lawful and in accordance with the procurement guidelines. The company was listed second on the list of preferred bidders, and was elevated to preferred-bidder status after Azurest-Cambridge, the highest-ranked bidder, failed to make the required posting of a security bid bond by October 3, 2013.

Last week, Audley Shaw, the opposition spokesman on finance, called for the Government to give all the support the company needs to make it possible.

"The LNG (liquefied natural gas) 381-megawatt project must be given national priority to ensure that the financing is put in place expeditiously to make it happen," Shaw said during his contribution to the Budget Debate in Parliament last week.

"The Government should help to target funding from the multilaterals as part of the drive to get the project on a fast track once it is satisfied with the technical capabilities of the winning bidder," Shaw said.

OUR'S POSITION

The OUR is set to reveal its position on the licences given to EWI by Paulwell today.

Contacted yesterday, Paulwell refused to speak to the matter, saying he was scheduled to meet with the Energy Monitoring Committee this morning, after which he would break his silence.

In the interim, civil-society groups National Integrity Action (NIA), Jamaica Civil Society Coalition (JCSC) and Jamaica United for Sustainable Development have called for the Government to shed light on the matter.

"To date, the public is yet to be notified as to what changes were made to the licence, the safeguards included in the licence, and the reason behind these changes. This is wholly unsatisfactory and entirely inconsistent with the Government's stated commitment to transparency and accountability," the Trevor Munroe-led NIA and the JCSC said in a joint release.

The NIA and the JCSC, in an open letter to Paulwell, said, "The lack of transparency and, in fact, secrecy, with which the bidding and licensing of EWI has been handled thus far, contribute to an unnecessary suspicion and lack of faith in the process surrounding this project."

The baseload project is a central plank of the Government's push to lower energy prices on the island from US$0.41 per kilowatt-hour.