Company with Jamaican connection offers to bail out EWI
A Chinese company based here has approached the Government's investment company, Jamaica Promotions Corporation (Jampro), with a view to assist with the fallout arising from Energy World International's (EWI's) failed bid to meet all the requirements to construct a booster energy plant on the island.
A usually reliable source told the Jamaica Observer that officials of the Chinese company met with executives of Jampro in New Kingston yesterday and offered to work with the island to get the project off the ground.
"During the meeting with Jampro, the Chinese suggested that they were willing to work with EWI, and vowed that they could secure the necessary financing from China's Ex-Im Bank to get the 381-megawatt project going," the source said.
"The Chinese have said that they were also willing to meet with the Ministry of Science, Technology, Energy, and Mining as early as tomorrow (today) to get things started," the impeccable source said.
Hong Kong-based EWI missed its deadline to pay a performance bond of US$37 million last Thursday.
The total cost of financing the project is US$737 million, of which one per cent -- US$7.37 million -- had been paid over as part of the bond arrangement.
However, EWI was pushed against the wall after it emerged that the Inter-American Development Bank, upon which EWI was relying to provide non-equity financing for the project, had opted against doing so, citing breaches of Jamaica's procurement procedures in the award of the contract.
EWI was the preferred bidder to build a power plant that would bolster the national grid by supplying it with 381 megawatts of generating capacity.
The implementation of the natural gas-fuelled project would result in Jamaicans paying less for electricity, the cost of which is prohibitive to some, and has led to widespread stealing of the commodity. Jamaicans pay 42 US cents per kilowatt hour for electricity, and it is believed that when the project is fully implemented the cost will be reduced by approximately 30 per cent.
EWI has committed to deliver electricity to the grid at 12.88 US cents per kilowatt hour.
The latest move by the Chinese company would serve as the fillip that the embattled EWI needs, following countless calls for the company to be rejected as the preferred choice of generating capacity supplier.
The Office of the Contractor General (OCG) had said in a report last year that Energy Minister Phillip Paulwell intervened improperly in the bidding process by including EWI's proposal after the closure of the bid acceptance period.
Based on that, the OCG said that the bidding process had been compromised and described the Office of Utilities Regulation's (OUR's) acceptance of EWI's proposal as unfair.
Paulwell has been under fire in recent days, with the Opposition Jamaica Labour Party calling on Prime Minister Portia Simpson Miller to relieve him of portfolio responsibility for energy over the EWI affair.
Another source said that Simpson Miller met yesterday with members of the Private Sector Organisation of Jamaica, who suggested that she abandon the entire process of selection and allow a special monitoring committee to handle affairs relating to the matter.
Simpson Miller, the source said, had already laid down some conditionalities to EWI and expects the company to respond to her by Monday.
EWI, the energy arm of Energy World Corporation, is engaged in the production and sale of power and natural gas in several countries.
The company was the second preferred bidder behind United States-based consortium Azurest-Cambridge, but was upgraded last October when Azurest was disqualified after it failed to meet a 15-day deadline to produce a one per cent security bid for the project, which it projected would cost US$690 million to build.