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The 381-megawatt energy project should be put back to tender
PhillipPaulwell
Columns
Grace Virtue  
May 18, 2014

The 381-megawatt energy project should be put back to tender

THE best solution to the problems around the 381- megawatt project that have many people calling for the resignation of Science, Technology, Energy, and Mining Minister Phillip Paulwell, is to put it back to tender, that is, if the licence can , in fact, be withdrawn. Time is critical, but a few months’ delay is better than another mistake and if the process is handled efficiently, delays can be minimised.

Most importantly, inviting new proposals would ensure the process is transparent and that bidders have the expertise needed and are not just fly-by–nights trying to profit on the backs of the people. The Government would also be able to select the most competitive bid rather than settle for one offer.

In response to some readers’ comments last week, let me say two things: First, I would not describe myself as a Paulwell supporter and I do not think in those absolute terms when it comes to human behaviour, mine or others, so support in one instance would not necessarily mean the same in another.

In this case, I will say the uproar made me want to understand what happened and I have not heard so far that Paulwell sought to benefit improperly or that his actions caused harm to anyone. Rather, he seemed to have been trying to fix a process that was not serving its intended purpose: to secure a competent vendor to execute a largescale project to reduce the cost of energy to the country. Second, I am not an expert on everything, but I am at some things, including how to research, interpret, analyse and present qualitative data especially, and I have hired contractors before.

Though the size of those projects pale by comparison, the principles are much the same. If I were to apply those principles to this case, I would have targeted industry leaders like Bechtel, Siemens, and Fluor, which are executing with competence and integrity, projects like ours, and many times larger. Our request for proposal, if it weren’t, should have been presented to companies like these, either directly or through advertisements in medium like The Washington Post or The Washington Business Journal. Siemens’s reported worldwide revenue exceeding $100 billion in 2013 and Fluor, just over $27 billion.

Bechtel reported over $37 billion in 2012. They would not have difficulty posting their performance bond, but whether or not they would risk their reputations to work for us is another matter. Bechtel, for the 16th consecutive year, ranked first among 400 contractors by Engineering News- Record (ENR), a leading industry publication; Fluor ranked second. At 116 years old, Bechtel says on its website, it has worked on more than 25,000 projects, including fossil and nuclear plants, renewable energy, refineries, and petrochemical facilities in 160 countries.

It has 53,000 employees, nine offices in the United States, four in China and others over several continents. Siemens, aged 165 years, has 362,000 employees in 190 countries and revenue exceeding $100 billion in 2013. Fluor, at 100, has 40,000 employees and is a leader in solar, wind, and geothermal power. Compared to these companies, EWI is a toddler and Azurest- Cambridge and Energise Jamaica, barely embryonic.

The EWI website says the company was incorporated in 1985 and has worked on, or is currently engaged in projects in Australia, The Philippines, Indonesia, Papua New Guinea and Sri Lanka. Both Azurest- Cambridge and Energise Jamaica are new consortiums. Consortiums are workable, but they can be problematic, particularly when they are coming together for the first time and required expertise are obviously missing.

Faced with only these scrappy pickings, EWI’s late bid and better price must have seemed much better by comparison. The ensuing situation reminded me again of former Contractor General Greg Christie’s comment that many of our institutions are dysfunctional, whether by reason of flawed constructs, structural deficiencies, inadequate resources, poorly trained staff or nonaggressive leadership.

The OUR somehow fell short by what it did or did not do, resulting in only low level bids. The Office of the Contractor General did its job by observing strictly the letter of the law but ignoring the spirit of it, which should be the best interest of the country, and the minister tries to move the project by using authority that he does not have. Projects like these should not be awarded to small start-ups, and there must be no appearance that the Government is giving in to corporate strong arming. In the meantime, disparity is widening and the balance of economic power extremely unhealthy for the country.

This should mean something to the Inter-American Development Bank (IADB), whose withdrawal of funding doomed EWI as the selected vendor, since development organisations everywhere are increasingly concerned about it and Jamaica ranks among the worst.

It would be helpful too, if responses to problems such as encountered with the project, are better contextualised: that, for example, if a numerative value of 100 is ascribed to the status of being developed and Jamaica is only at 50, it means that we will make mistakes, not always because we are corrupt, but because we are often inept and must contend with a dysfunctional cultural and political elements.

Grace Virtue, PhD, is a social justice advocate.

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