Davies says China won't buy energy at 40 cents per KWh

Sunday, March 02, 2014    

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MINISTER of Transport, Works and Housing, Dr Omar Davies, has said that the Chinese government's proposal to build a coal-fired energy plant to support its proposed US$1.5-billion investment in the Goat Islands, was a consequence of Jamaica's energy costs.

He said that China Harbour Engineering Company (CHEC), the government-owned company handling the proposed investment, has one generic problem -- Jamaica's energy costs -- for which they must seek solutions.

"They have indicated that there is no new manufacturing activity that they could attract to Jamaica at a (energy) cost of 40 cents per kilowatt hour, and that is a fact," Davies told the House of Representatives Tuesday in response to a question from Opposition spokesman on the Environment, Dr Andrew Wheatley.

"I said to them, what would be feasible to you, and they said anything between eight cents and 15 cents, they could live with that. And I said, what could lead to that, and they indicated the coal plant," Dr Davies explained.

"If we were able to offer them power at an appropriate price rate, I don't think they would set about building a (coal) plant. But they are saying that they would be unable to attract investors into manufacturing, if we are going to offer them (energy at) 40 cents".

Asked by the Leader of the Opposition, Andrew Holness, whether the 360-megawatt plant, being promoted by Minister of Science, Technology, Energy and Mining, Phillip Paulwell, as the answer to Jamaica's energy problems, would be attractive to the Chinese investors, Dr Davies said no.

"The reduction which would result would only be significant because of where it is now, but not in terms of where it should be and what a competitive industry would want," he stated.

Davies appealed to his colleagues in the House of Representatives to show more understanding for the Government's efforts to accommodate the Chinese investors.

"In much of what I have heard, in terms of discussing this proposed project, what is portrayed is that here we have a special prize and there are 50 people beating down the door, wanting to enter, therefore, it is our right to determine the conditions under which we open that door," the minister observed.

"I am not suggesting that we are just going to say, anything goes; but what I am saying, and I can speak with absolute knowledge, is that there are other countries which are offering them opportunities," he said.

Dr Davies also addressed what he identified as issues of concern, including that the Government and the Port Authority of Jamaica (PAJ) are seeking to bypass the environmental regulations.

"This is not so," he said. "Since my last address, there have been several town hall meetings with constituents in the Old Harbour area, as well as meetings with major stakeholders, including the environmental protection groups.

Davies said that CHEC, with the assistance of the PAJ, has applied for permission to bore holes on the proposed site, as a part of the technical study.

As soon as they have presented the preliminary designs, the PAJ will facilitate meetings with the National Environmental Planning Agency (NEPA) with a view to initiating the Environment Impact Assessment (EIA) process.





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