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Lights out for EWI - Firm to lose 381-megawatt power plant licence, project likely to be yanked from Paulwell

Published:Tuesday | May 6, 2014 | 12:00 AM
Energy Minister Phillip Paulwel
Prime Minister Portia Simpson Miller.

Gary Spaulding, Senior Staff Reporter

Energy World International (EWI) yesterday suffered the same fate as Azurest when a decision was taken that the -contract to construct a 381-megawatt plant will be snatched from its grasp, almost a week after it was revealed that the Inter-American Development Bank (IDB) refused to grant a loan to finance the project.

Word came late yesterday from a source within the Cabinet that "EWI could not go ahead".

At the same time, The Gleaner understands Phillip Paulwell, the beleaguered energy minister, is likely to be separated from the multibillion-dollar project he has been accused of mismanaging.

Promises to private sector

Highly placed sources told The Gleaner that Prime Minister Portia Simpson Miller carried out promises she made last Friday to disgruntled members of the private sector and civil-society groups who had pulled out of the Energy Monitoring Committee unless EWI was scratched.

As Paulwell reeled under pressure, the Government buckled, promising that the recommendations from the Jamaica Chamber of Commerce, the Jamaica Manufacturers' Association and the Private Sector Organisation of Jamaica would be taken on board.

This meant that EWI had until 10 o'clock yesterday morning to fulfil its requirement, but failed, forcing Paulwell's hand.

Simpson Miller has reportedly also promised to take on board recommendations that Paulwell be "distanced" from the multibillion project.

To this end, Paulwell is expected to announce in Parliament today the establishment of an oversightenterprise committee to ensure transparency in the processes going forward.

It is understood that Paulwell and his ministry would, therefore, not be reposed with direct responsibility for the project.

The private-sector groups had specifically recommended that the current process be aborted and the licence be rescinded by the Cabinet. They also called for the disbandment of the EMC, and in its place a public-private energy enterprise team be appointed by Simpson Miller, reporting administratively to the Office of the Cabinet through the Cabinet secretary.

The Gleaner understands that other stakeholders have been energised into action, with the Jamaica Public Service Company (JPS) and Energise Jamaica ready to make their move.

In response to queries from The Gleaner, the JPS proffered: "We await official word from the Office of Utilities Regulation (OUR) and/or the Ministry of Energy regarding the situation with EWI."

The light and power company stated that, like the rest of Jamaica, JPS was anxious for the replacement of existing oil-dependent power generation, as this would assist in reducing the cost of electricity for its customers.

"We, therefore, remain committed and stand ready to facilitate the construction of new generating plants as soon as possible," the JPS said.

More competitive bids

Earlier yesterday, Opposition Leader Andrew Holness said he had received "unofficial" word that other bidders were emerging with more competitive bids as Paulwell issued a seven-day ultimatum to EWI to sort itself out.

EWI's bid had been set at US$0.1288 and, when the JPS was in the running in direct negotiations with the OUR, the company had proposed around US$0.17.

It is understood that the JPS is now proposing US$0.14 and has on the table a 240-megawatt project to cost US$500 million.

There is the suggestion of a Floating Storage Regasification Unit and that the JPS could go down to US$0.135.

However, it is understood that Energise Jamaica is offering liquefied natural gas-generated electricity at US$0.16 but also floating the idea of going down to US$0.145.

The parliamentary Opposition yesterday signalled that there would be no ease-up on Paulwell until Simpson Miller takes over the project.

Among Paulwell's alleged follies, Holness characterised as "most devastating" the minister's decision to ignore procedures because "by some dint of his imagination, it is patriotic".

To make matters worse, Holness suggested that Paulwell, an attorney by profession, applied "undue influence on an independent commissioner and, in so doing, overstepping his ministerial bounds".

Said Holness: "Projects fail when we don't follow well-established procedures ... . It is not in the breaking of rules that we are patriotic, it is in the upholding of rules that we guarantee success and patriotism."

He added: "The speedy conclusion of the project is now compromised and I have written to the prime minister to express our grave concern ... . It is apparent that at this stage, the project is uncertain and the credibility of the process has been challenged."

Exercise good judgement

Holness was quick to qualify his comment when questions were raised about the competence at Jamaica House to take on such project.

"The prime minister must exercise her good judgement ... . It may very well mean that she brings in other people who are less involved and connected and who can impartially adjudicate the matters that are there," he said.

Added Holness: "It may mean that she assign another minister to carry it through, or it may mean that she herself take it over. It is such a nationally important project. All we are saying is that the authority of the prime minister must be brought to bear in rescuing this project."