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OUR had no place in energy-bid selection

Published:Friday | May 2, 2014 | 12:00 AM
Dr Carlton Davis

Daraine Luton, Senior Staff Reporter

Energy expert Dr Carlton Davis has joined former head of the Office of Utilities Regulation (OUR) Winston Hay, in saying the regulator should never have been involved in the selection of the bidder for the baseload energy project.

The comments, which were made during separate interviews yesterday, are in line with the position expressed by embattled Energy Minister Phillip Paulwell.

Davies, a special adviser to Prime Minister Portia Simpson Miller on energy, describes the situation surrounding the project as "really unfortunate", saying matters such as a bidder's ability to finance the project, should have been addressed earlier.

"I believe that some of the issues which have arisen should have been dealt with much earlier in the process and I am one of those who believe that when we are dealing with strategic issues of such national importance, one has to try to use a much broader range of experiences to deal with these issues rather than anybody like the OUR," said Davies, who is co-chair of the Energy Monitoring Committee.

Hay, who headed the OUR from 1996 to 2002, told The Gleaner/Power106 news centre that based on his understanding of the OUR Act, the regulator has no role in any procurement process.

"The OUR should not have been responsible in selecting the bidder in this process. As I interpret the responsibility of the OUR, it would be to review what decisions are made, and that would be after government has made the decision on the company to be engaged for that service that the OUR would then express its opinion," Hay said.

The OUR had hired international consultant Mott McDonald to evaluate the four proposals submitted to provide 360 megawatts of electricity to the national grid.

KNIFE'S EDGE

But the project is now on a knife's edge after the Inter-American Development Bank (IDB) rejected a request for non-equity funding and its imprimatur to secure other loans, from the Hong Kong-based Energy World International (EWI), which now has the preferred bidder status.

The IDB's refusal to participate in the project was motivated by a September 2013 report of a special investigation by the Office of the Contractor General (OCG), which recommended that EWI be disqualified from the bidding process, claiming that Energy Minister Phillip Paulwell acted improperly when he facilitated the company's late inclusion.

The OCG said the improper intervention of the energy minister and the acceptance of the proposal by the OUR were unfair and compromised the integrity of the process.

OCG FINDINGS REJECTED

However, both the OUR and the energy minister rejected the OCG's findings.

Earlier this week, Paulwell said it was unfair for him to be asked to lower energy costs while he does not have any role in procurement.

"I now accept, and this is not to decry the OUR, but procurement has to be separated from the role and function of a regulator and the minister can no longer be a bystander in certain parts of the process," Paulwell said on Tuesday. "This ought to be driven by policy, and we are going to take steps to make sure that, as we procure in the future, it is done in a transparent way, the rules are properly defined, but the ministry must lead."

Opposition Leader Andrew Holness has condemned Paulwell for the comments and has written to Prime Minister Portia Simpson Miller on the matter. He wants her to take over the project.

"I can't take any interpretation other than that the minister is saying he wants political consideration to be brought into procurement. We object to this," Holness said.

daraine.luton@gleanerjm.com