THE Office of Utilities Regulation (OUR) has confirmed that Energy World International/Pacific LNG (EWI) yesterday posted its bid security as a condition of its selection as the preferred bidder in the base load 360-megawatt generating capacity project.
The US$7.37-million bond, which was due yesterday, represents one per cent of the total cost of the project, which is US$737 million.
The OUR explained that submission of the bid bond was a security to indicate the preferred bidder's interest in pursuing the project. It is forfeitable if the bidder fails to proceed with the project and refundable upon the successful completion of the project, the OUR explained.
On September 18, OUR had named Azurest-Cambridge Joint Venture Association with Waller Marine Inc as its first choice to construct the energy project plant. This was a day after Contractor General Dirk Harrison tabled a report in Parliament painting a disagreeable picture of ministerial missteps and regulatory lethargy in relationship to the role of Energy Minister Phillip Paulwell and the OUR in the controversial bidding process.
However, Azurest was unable to meet the October 3 deadline to post its US$6.9-million bid security, resulting in EWI, the OUR's second choice, stepping up to the preferred-bidder position to construct the power plant. Yet, the project continues to be haunted by controversy, as the contractor general had recommended that EWI be excluded from the process since its proposal was not submitted "within the timeframe as publicly established by the OUR", and because representatives of the firm met with Paulwell during the "ongoing process".
But yesterday, the OUR indicated that it was determined to proceed with the project, stating that the next phase is the posting of the five per cent performance bond that will become due prior to construction.
The OUR said that this instrument is a guarantee against the entity's performance and, like the bid bond, is returnable and forfeitable. In accordance with international best practices, apart from initial checks carried out as part of the evaluation process, the OUR says it will continue to conduct further due diligence. This includes an investigation by the Revenue Protection Division of the Ministry of Finance and Planning.
"EWI will now have to commence negotiations with the Jamaica Public Service Company Limited with a view to signing a Power Purchase Agreement, finalise a fuel supply agreement for the project, as well as meet and present all the statutory requirements needed to achieve financial closure to allow for the commencement of construction," the OUR said.
"The company will also be setting up local offices. The OUR will continue to provide updates on all projects it executes, as it continues its commitment to perform in a fair and transparent manner," the OUR added.