Mon | Jan 21, 2019

EDITORIAL - Shouldn't OUR reconsider?

Published:Thursday | September 25, 2014 | 12:00 AM

We appreciate fully the primacy of the courts to arbitrate on behaviour that is regulated by statute, as well as the right of institutions whose interests or authority may have been compromised to seek jurisprudential redress.

So, notwithstanding any unease there may be over government agencies challenging each other in the courts, we respect the legitimacy of the Office of Utilities Regulation (OUR) questioning the contractor general's interpretation of the Government's procurement rules and, by extension, the powers of that office. It would be hardly logical, and would probably be detrimental to the perception of the independence of these agencies, if they engaged, as some would have them do, in bilateral talks to resolve their differences.

Nonetheless, like many Jamaicans, we question whether, in the current circumstances, the action of the OUR is timely and, in the long run, in the best interest of Jamaican taxpayers.


Several months ago, a report by Dirk Harrison, the contractor general, concluded that the OUR had breached the Government's procurement rules in the ill-fated tender for a gas-fired power plant for which Hong Kong-based Energy World International (EWI) was, ultimately, declared the preferred bidder. Mr Harrison's argument was that EWI was allowed to bid after the process should have been closed because of the intervention of energy minister, Phillip Paulwell. In other words, EWI gained preferential treatment.

The OUR rejects these arguments, insisting they represent a profound misreading of the procurement mechanism, including what constitutes unsolicited bids and where an informal process ends and a formal one begins.

This, on the face of it, is a prime matter for the courts. Except that two significant issues come into play. The first, and potentially significant to the pocket of taxpayers, is who will benefit most if the court rules in favour of the OUR. Most likely EWI!

EWI was displaced as the preferred bidder, having failed to post the required performance bond, after its capital-raising power was weakened, as was made clear by the retreat of the Inter-American Development Bank from a potential deal, by Mr Harrison's report. If EWI harbours prospects of suing the Jamaican Government for loss of business, its position would be strengthened by any decision in favour of the OUR.

We, of course, do not belittle the value of and clarity that a decision, either way, would afford the contending parties, any other government agency involved in procurement, or private businesses offering their services to the State. But there is the issue of timing.

Even as this matter is awaiting a decision of whether it will be heard, a new procurement law is before Parliament, aimed at bringing statutory clarity to the processes by which the state acquires its goods and services. This law would provide a public procurement commission to police the system for its integrity.

The proposed law also calls for the establishment of an office of public procurement in the finance ministry, with "responsibility for the development of the public procurement policy", and to provide "policy implementation guidance", including the review of procurement methods.

It seems that any mischief that may have crept into the EWI deal can be easily remedied in this arrangement. Perhaps the OUR, in the circumstances, would wish to reconsider its options.

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