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OUR gets contractor general support on EWI licence delay

Friday, March 07, 2014    

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THE contractor general yesterday said it supported a decision by the Office of Utilities Regulation (OUR) not to recommend a licence, at this time, for Energy World International (EWI), the company selected to build a 360-megawatt power plant to supply the national grid.

Hong Kong-based EWI, which was selected after the first preferred bidder, Azurest, was unable to satisfy the initial requirements, has failed to supply additional documentation required to secure the contract.

Consequently, the OUR has not recommended that the minister issue a licence to the company, which was allowed into the bid process under controversial circumstances.

In a statement yesterday, the Office of the Contractor General (OCG) said it was keenly monitoring the execution of the project, which is currently being undertaken by the Government of Jamaica through the OUR.

"The OCG is cognisant of the value and importance of the successful completion of this project and its implications for national development. In this regard, the OCG remains committed to providing the necessary scrutiny and oversight in accordance with its mandate, to ensure that, as best as possible, the process undertaken is void of irregularity and impropriety and adheres to the principle of value for money," Contractor General Dirk Harrison said.

He said as a result, the OCG "commends the direction now being pursued by the current director general of the OUR, Albert Gordon, specifically with respect to the decision taken by the OUR to request and await from EWI, documents critical to the progress of the project".

At the same time, the OCG expressed concern that its request for EWI to produce audited financial statements, dating back three years, is yet to be met.

"Instructively, the OCG notes that by way of letter, which was dated January 31, 2014, the OCG wrote to the OUR and made reference to the instructions for final proposals, dated May 27, 2013, in which it was a requirement that all bidders submit audited financial statements for the past three years, supported by the parent entity's or equity partner's audited financial statements," said the contractor general.

"In the foregoing regard, the OCG cautions that this apparent delay on the part of EWI has serious implications for the due diligence process currently being undertaken by the OUR and, by extension, the timely and successful execution of the project," Harrison stated.

He added that the long-term fiscal implications cannot be ignored, as the OUR acts, not on its own behalf but on that of the people of Jamaica, who will ultimately bear all expenses related to this critical and necessary undertaking.

"It is on this premise that the OCG commends the OUR and supports the stance taken in not providing a recommendation to the minister of science, technology, energy and mining, for the issuance of a licence to supply electricity generating capacity to the Jamaica Public Service (JPS), until the EWI has fulfilled its obligations in providing the relevant documentation required as a part of the due diligence exercise," Harrison added.

Meanwhile, the OCG said it has, since September 2013, concluded five special investigations, all of which have been prepared and submitted to Parliament. The reports included the energy supply project, the complaint regarding the award of contract(s) to construct/repair and rent shops at the Spalding Market; contracts awarded to contractors allegedly selected by Government member of parliament Derrick Kellier in February 2014; allegations regarding the contract termination and award practices at the National Solid Waste Management Authority in February 2014; and the circumstances surrounding the entering into of an agreement for the operation of the Braco Resort Hotel (formerly Breezes Rio Bueno, Trelawny) between the commissioner of lands (by virtue of trust on behalf of National Insurance Fund), the accountant general and Blue Diamond Hotels and Resorts in February 2014.

The OCG currently monitors, on a sustained basis, approximately 988 Government of Jamaica contracts, 618 of which are non-construction contracts and 370 which are construction-related.

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