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Gov't heat on EWI - Paulwell gives energy firm days to get house in order

Published:Monday | May 5, 2014 | 12:00 AM
Embattled Energy Minister Phillip Paulwell (in sunglasses) abandoned his vehicle and joined placard-bearing supporters on Mona Road in St Andrew as they walked to the University of the West Indies for a People's National Party (PNP) National Executive Council meeting yesterday. More than 100 PNP supporters lined the road to show support for Paulwell and the controversial licence granted to Energy World International. - Norman Grindley/Chief Photographer

Livern Barrett, Gleaner Writer

FACING A growing backlash for his handling of the 381-megawatt baseload project, Energy Minister Phillip Paulwell has signalled that he is ready to get tough on Energy World International (EWI), the company selected to build the power plant.

Amid calls from some of the country's most powerful private-sector leaders for the Government to abort the process and rescind the licence granted to EWI, Paulwell all but confirmed reports reaching The Gleaner that the company has been given one week to get its house in order.

"Something like that," was all the embattled minister was prepared to say yesterday, as he left a meeting of the National Executive Council of the governing People's National Party at the Mona campus of the University of the West Indies in St Andrew.

"You will hear more from me when I speak in Parliament on Tuesday [in the Sectoral Debate]," Paulwell added.

After failing to pay over the US$37-million performance bond for the project and faced with mounting pressure to demonstrate its ability to finance the construction of the 381-megawatt power plant, government sources told The Gleaner on the weekend that the Hong Kong-based company has been given one week to come up with the bond payment and demonstrate how it intends to finance the project.

IDB PLAN CRIPPLED

EWI's plan to approach the Inter-American Development Bank (IDB) for non-equity financing appears to have been crippled on the weekend with Contractor General Dirk Harrison insisting he would not change his position against the manner in which the company was included in the process.

The contractor general's criticism of the procurement process was cited by the IDB as it initially refused to provide EWI with a loan.

"The contractor general stands by that statement and will not budge. For me to do so would be unethical and dishonest," said Harrison as he addressed a ceremony hosted by the Clarendon Chapter of the Lay Magistrates' Association on Saturday.

But having learnt of Harrison's comments, the minister told journalists that he has abandoned plans to hold discussions with Harrison to modify his position.

One government source told The Gleaner that if EWI failed to meet the seven-day deadline, the project would be offered to the Jamaica Public Service Company (JPS), which has proposed a price of US$0.14 per kilowatt-hour, shades above EWI's bid price of US$0.1288.

ENERGISE JAMAICA WANTS CHANCE

However, sources close to Energise Jamaica, the group that is next in line for the project, insisted yesterday it should be selected if EWI's bid falls through and hinted at possible legal action to ensure that this happens.

"Just like how it went from Azurest (the group that was initially selected as the preferred bidder) to EWI, … it was a legal procedure that dictated that action and consistent with that and logical to that is that EWI has defaulted on its commitment, so the legal procedure is to go to the number three bidder," the source explained.

"Obviously, if the law is breached, there is recourse," the source added.

The Energise Jamaica source insisted that the company stands ready to deliver electricity to the JPS at US$0.16 using LNG, as was outlined in its bid, and reiterated that it has all the financing in place to undertake the project.

The 381MW project, which is critical to the Government's plan to significantly slash energy costs, is to provide new baseload capacity that will replace approximately 292MW of power generated at inefficient and aged plants in Old Harbour.