Sun | Mar 24, 2019

Break silence, EWI - Energy consultant urges Hong Kong-based company to show public its ability to implement project

Published:Friday | May 2, 2014 | 12:00 AM
Energy Minister Phillip Paulwel

Daraine Luton, Senior Staff Reporter

Stephen Wedderburn, the man who coordinated the liquefied natural gas (LNG) project which was aborted by the Portia Simpson Miller-led Government, has declared that Energy World International (EWI) must break its silence on the baseload energy project, which appears to be on life support.

At the same time, Wedderburn, an energy consultant, said yesterday that Energy Minister Phillip Paulwell should release the implementation agreement signed with EWI to reveal whether it contains sufficient safeguards.

"What I would hope to see EWI doing is defending the project and their ability to implement it," he told The Gleaner.

"EWI really needs to win over the heart of the Jamaican people if they want to proceed."

PREFERRED BIDDER

The Hong Kong-based company has been selected as the preferred bidder to supply 381 megawatts of power to the national grid but, up to yesterday, had not paid over its performance bond required under the agreement.

The company, which is to build a US$737 million natural gas-fired power plant, has been shut out by the Inter-American Development Bank (IDB) after it approached the body for a loan to fund the non-equity side of the project.

The IDB has cited concerns raised by Contractor General Dirk Harrison that EWI was unfairly included in the bidding process as its reason for denying them funding.

Jamaica's private-sector leaders have called a meeting for this morning to speak on the developments surrounding the project.

Communication expert Dr Marcia Forbes said on Twitter yesterday, "the Inter-American Development Bank's rejection of EWI based on a marred process is perhaps more damaging to Jamaica than the Dudus Debacle".

Forbes' was comparing the current controversy to the 2010 extradition matter involving then fugitive Christopher Coke, which ultimately led to Prime Minister Bruce Golding's resignation.

The Jamaica Civil Society Coalition (JCSC) yesterday announced its withdrawal from the Energy Monitoring Committee, pending a satisfactory overhaul of the process and called for the rescinding of the licence issued to EWI, "given the company's failure to meet the deadline for paying the performance bond, and in light of the minister's own assurances that this requirement would have been the determining factor in going forward".

The coalition has also called for Paulwell's resignation.

Meanwhile, the OUR has released the proposed licence it gave to Paulwell for issue to EWI as well as the one which was amended by the minister and issued. The licence reveals several omissions, which some persons have argued represents a removal of safeguards that were built in by the OUR.

Paulwell has said that some of the things taken out of the licence proposed to him by the OUR have been placed in an implementation agreement.

Under the new licence granted by Paulwell, the rights of the Government to enter and take over the project apply only after the plant is built and is selling power to JPS.

The OUR had proposed that the Government be able to take over the project from the construction phase but that recommendation has been excluded from the new licence.

"The effect of the new licence is to tie the hands of the OUR from taking any action against EWI in the construction phase. Under this licence, it is only the minister who will have any right to move against EWI in the construction phase. Even then, there are no significant targets laid down in the licence so it will be extremely difficult for the minister to claim any licence breach in the construction period. There is not even a deadline for how long the construction should take," Wedderburn said, while arguing that Paulwell "has given EWI a free pass for the construction phase".

He said Paulwell should publish, post haste, the implementation agreement so that Jamaicans can see that the safe-guards are there.

Meanwhile, Wedderburn has parted company with those who have suggested that the current process be aborted and started anew.

He noted that this was the third time the OUR has gone to the market to get new generating capacity to replace the aged plants at Old Harbour, St Catherine. This new capacity is to be baseload and was intended to replace approximately 292MW of inefficient, aged plants with the remainder to provide for load growth.

"Every time we break a tender or stop it we actually reduce our credibility in the market," Wedderburn said.

He said with this credibility issue, there would be no guarantee that there would be real interest.

He has suggested that the OUR use the direct-tender method and dust off a proposal from the JPS and seek to have that project implemented if the EWI project suffers stillbirth.

The OUR last February terminated the request for proposal (RFP) process with JPS in relation to the 360MW project after the company missed a third deadline, which was granted to facilitate the provision of project agreements, identify the supplier of natural gas and provide a renewed bid security. JPS was two years earlier awarded the right to construct the 360MW combined cycle plant.