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Energy Minister Phillip Paulwell’s “improper facilitation” of a bid from Hong Kong-based Energy World International (EWI) group, for the government’s 360-megawatt power plant.
Updates
jamaica-gleaner.com/gleaner/20130918/
In one of the reports, tabled in the House of Representatives yesterday, Harrison characterised as improper, the intervention of Minister of Science, Technology, Energy and Mining Phillip Paulwell into the tender process for the construction of the 360-megawatt power plant and the acceptance of one of the bidders after the deadline that had been set.
Dismissing the contractor general's findings, Paulwell declared: "I am fighting for Jamaica's very future, and I will not be derailed from my objective.
Thursday, October 03, 2013
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TODAY is the deadline for Azurest-Cambridge Joint Venture Association with Waller Marine Inc, the highest-ranked bidder in the project for the procurement of base load capacity to the national grid, to come up with the one per cent bid security (US$6.9 million) required by the Office of Utilities Regulation (OUR).
However, there have been some dark clouds circling the completion of the process following Azurest's denial that it promised a bottom-line US$0.1390 per kilowatt hour energy price, as well as questions about its ability to raise the US$690 million needed to complete the project which have heightened with the release earlier this week of consultant Mott MacDonald's executive summary of the bid evaluation reports for
the project.
Yesterday, both the Private Sector Organisation of Jamaica (PSOJ) and the civil society organisation, the Jamaica Civil Society Coalition (JCSC), raised concern about the situation and rejected the possibility of Energy World International (EWI) — the Hong Kong firm allowed to enter a bid after the March 15 deadline — being allowed to become the preferred bidder
The decision to allow EWI entry was strongly condemned by Contractor General Dirk Harrison in his recent report to Parliament on the issue.
In its release yesterday, the PSOJ said that it was concerned that the release of consultant Mott McDonald's executive summary of the process has only helped to create more questions than answers, "and has, in fact, heightened concerns about the entire bid process".
The PSOJ said that, in the interest of transparency, it was again calling
for full disclosure to the public of all reports relating to the bid process.
"The organisation is also reminding the OUR and the public that tomorrow, October 3, is the deadline for Azurest Cambridge to provide the appropriate one per cent bid security bond to the Office of Utilities Regulation (OUR), and should they fail to do so,
the PSOJ is strongly urging that they be disqualified from the process.
"In this event, the PSOJ is also strongly urging the OUR to adopt the two main recommendations outlined by the Office of the Contractor General (OCG) in his recently released report, which are [to] exclude EWI from the current process, and commence immediate negotiations with the prospective investors that submitted proposals by the previously established March 15, 2013 deadline date," the PSOJ said.
Meanwhile, the JCSC called for the recommendations included in the OCG's report on the project to be adhered to by the OUR and the Government to "exclude" EWI.
The coalition also urged the public to take careful note of the advice given to the Government and the OUR that "in the event of selecting the preferred bidder, Mott MacDonald would expect further investigation/due diligence of the bidder before contractual negotiations are undertaken".
The OUR named the Azurest-Cambridge Joint Venture Association with Waller Marine Inc as the highest ranked bidder in the project on September 18.
Making the announcement at a media briefing, Ansord Hewitt, OUR's director
of regulation, policy, monitoring and enforcement, stated that the selection of a preferred bidder came down to the ranking of the technical proposal on offer and the lowest price. He said all entities received passing grades on their technical proposals, and the prices proposed by the bidders varied significantly from a high of US$0.2203 to a low of US$0.1390 per kWh.
He said given the results of the assessment, the OUR had determined Azurest to be the highest ranked bidder, followed by EWI;
Energise Jamaica Ltd (incorporating) Amourview Holdings Limited, Tankweld Limited and Seaboard Jamaica Corporation, and Optimal Energy.
Azurest-Cambridge was then required to provide the OUR with its bid security representing one per cent of the total investment cost of the proposed project within 15 days, that is, by today.
Should they fail to post this bond, the OUR said it would proceed to offer the opportunity to provide the facility to the next highest ranked entity.
Read more: jamaicaobserver.com/news/Azurest-faces-first-hurdle-today_15182961#ixzz2ggXrdrQJ
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Anastasia Cunningham, News Coordinator The Office of Utilities Regulation (OUR) is likely to reject a request for a 15-day extension to Azurest Cambridge Power to pay over the one per cent security bond as the preferred bidder to construct the US$690 million 360-megawatt barge-mounted power plant, sources have told The Gleaner. Azurest has reportedly asked for the extension, citing that their investors were uncomfortable with the negative response following the company being named the preferred bidder. Yesterday was the deadline to make the US$6.9 million deposit to the OUR. According to a reliable source, "Azurest has told the OUR that a combination of factors has led to them asking for the extension. They said their financiers were uncomfortable with the series of negative events that arose out of the awarding of the contract." The source further told The Gleaner, "some of the negative factors include the fact that the major private-sector groups did not attend the OUR announcement of the preferred bidder and the negative response to them winning the bid. All of this has really made the financiers very uncomfortable." The source said the principals have asked the OUR to give them time to do their due diligence in Jamaica before they made a commitment to the project. But Gleaner sources close to the negotiations said the OUR would likely, not be granting that request. On September 18, the consortium of five firms - Azurest Partners, Cambridge Project Development, Inergix Corp, Waller Marine and Wartsila - was named the preferred bidder of the four companies which submitted proposals to supply half of Jamaica's energy needs to the national grid. They were given 15 days to make the deposit to secure the contract and to provide evidence of their ability to execute the project. Failure to pay the security bond would force the OUR to proceed to offer the opportunity to the next ranked entity, the Hong Kong based Energy World International (EWI), which Contractor General Dirk Harrison had ruled should be excluded from the list of entities to be considered. The Gleaner has learnt that EWI has indicated that it would be willing to come to Jamaica next week to meet with the OUR and to put up its bid bond immediately. A day after Azurest Cambridge Power was announced as the preferred bidder to build the liquefied natural gas plant, Kenneth Allen, founder and managing director of Azurest Partners, told the gathering at a press conference that they had adequate investors to fund the project. Allen disclosed that they had commitments from International Finance Corporation, Inter-American Development Bank, Royal Bank of Canada, other global lenders as well as Jamaica-based partners. However, controversy followed the announcement that the United States-based company was the preferred bidder to construct the 360-megawatt power plant, a critical component of the Government's plans to slash energy cost from the current rate of US$0.42 cents per kilowatt-hour. Azurest Cambridge Power reportedly proposed to provide energy to the national grid at US$0.1390 cents per kilowatt-hour. Following Harrison's tabling in Parliament of a report that questioned the procurement process, stating that it was handled inappropriately, the Jamaica Chamber of Commerce, Jamaica Manufacturers' Association and the Private Sector Organisation of Jamaica (PSOJ) boycotted OUR's press conference to announce the preferred bidder, calling on the utilities regulation company to fully addressed the concerns highlighted in the OCG's report before making any announcement. Concerns further mounted about the process used to select the bidder following Tuesday's release of a summary of the Mott MacDonald report. The international independent consultant, which was hired by the OUR to evaluate the proposals, revealed that none of the bidders achieved the minimum 75 per cent score in the category "ability to finance the project" which they needed to qualify for selection. Yesterday the PSOJ strongly urged that if Azurest Cambridge failed to meet the deadline, they should be disqualified from the process. On Wednesday, Opposition Spokesperson on Energy, Gregory Mair declared that the OUR must be prepared to answer questions today at the meeting of the Energy Council, noting that the full Mott MacDonald report needs to be made available, given concerns about how the OUR's decision to select Azurest was arrived at. He said a lack of transparency is the major problem still plaguing the process. Up to press time, there was still no official word from the OUR on the matter. anastasia.cunningham@gleanerjm.com
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Azurest says OUR's refusal to extend deadline robs J'cans of best energy solution Published: Saturday | October 5, 2013 Comments 0 Anastasia Cunningham, News Coordinator Energy World International/Pacific LNG (EWI) has moved up to the preferred-bidder position to construct the 360-megawatt power plant that Jamaica desperately needs to slash its energy bill. Yesterday, the Office of Utilities Regulation (OUR) announced that the previously announced preferred bidder, Azurest Cambridge Power, failed to meet Thursday's deadline to make a one per cent deposit to secure the contract, which forced the OUR to move to the next bidder. In a letter to the OUR, Azurest Cambridge asked for an extension of 15 working days; however, in keeping with the requirements of OUR's instructions for final proposals, the request was denied. In a statement yesterday, Azurest Cambridge Power said it regrets the decision by the OUR not to grant the extension, noting that "being denied this crucial extension, Jamaican consumers may have been subsequently robbed of the most viable solution to their energy needs". STILL SOURCING FUNDS The principals said they remained resolute in their commitment to providing a cheaper energy solution for Jamaica, and would continue their efforts to secure the investment capital in order to do so. EWI now has 15 days to pay a security bond, which would take them to October 19. However, Gleaner sources had said representatives of the Hong Kong-based company was willing to travel to Jamaica as early as next week to meet with the OUR and make the deposit. EWI, which had proposed to use natural gas from its own gas fields in Indonesia, made an offer price of US$0.14.56 per kilowatt-hour. EWI's inclusion among the list of four bidders for the major project has been clouded in controversy. Contractor General Dirk Harrison had ruled that they be excluded from the list, because their bid was facilitated after the cut-off date of March 15, 2013. Harrison chided the OUR, stating that this was unfair and irregular and a clear breach of the Contractor General Act. REFUTING HARRISON'S FINDINGS The OUR responded that the contractor general's findings were "patently incorrect and unsupported by the requirements of government policy and the law", and that the conclusion that the March 15 deadline was a strict termination date for a formal procurement process "is completely erroneous and is predicated on the unlawful application of a procurement procedure applicable to consulting services". The OUR said based on the informal nature of the process, it could lawfully accept and consider EWI's bid. In a statement yesterday, the OUR said: "Conclusion of a formal arrangement with EWI is conditional on the completion of aspects of due diligence on the company and its principals by the Financial Investigation Division, which had been requested to carry out this exercise for all bidders." The OUR's ranking of the bidders in the project to provide baseload capacity to the national grid had Azurest Cambridge in first place, followed by EWI, then Energise Jamaica Ltd, then Optimal Energy. The 360-megawatt plant is expected to supply half of Jamaica's energy needs. anastasia.cunningham@gleanerjm.com
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The Great Energy Debate
Published: Sunday | October 6, 2013 0 Comments
With rumblings continuing about the provision of 360 megawatts of power to the national grid, the Office of Utilities Regulation (OUR) last Friday sought to clear the air with a release on its actions so far and its next moves. Here is an edited version of that release.
Why not the preferred bidder?
Azurest-Cambridge Joint Venture Association with Waller Marine Inc (Azurest-Cambridge) failed to make the required posting of a security bid bond, the final date for which was October 3, 2013.
The bid bond represented one per cent of the total investment cost of the proposed project. The consortium had been given 15 days to furnish the OUR with the bond, after it was named highest-ranked bidder in the bid evaluation exercise.
In a letter to the OUR (dated Thursday, October 3), Azurest-Cambridge requested an additional 15 working days to post the bid security.
However, in keeping with the requirements of the OUR's Instructions for Final Proposals, the request was denied.
Savings for Jamaica
Notably, the OUR's calculations show that every US$0.01 reduction in the price of electricity translates to just under J$3 billion in savings annually to consumers at the current exchange rate.
Why defy the Office of the Contractor General?
The contractor general has not answered the OUR's position that he applied the wrong procurement procedure, which is the fundamental issue and the basis on which he arrived at all his conclusions.
The OUR maintains that no authority that properly considers the facts and applies the relevant provisions of law and policy would have arrived at the contractor general's conclusions.
Therefore, the OUR maintains that EWI's inclusion in the list of selected entities invited to submit bids on August 8, 2013 was lawful and in accordance with Condition 18 of the Amended and Restated All Island Electric Licence 2011 and the Government's procurement guidelines and was based on the adoption of a process that afforded all the entities to compete fairly, on the same basis and subject to the same rules.
In the pursuit of the national imperative to reduce the real cost of electricity to Jamaican consumers while meeting the need to secure capacity in the shortest possible time, the OUR has, at every relevant point in the procurement process, been diligent in ensuring that the process is conducted fairly and equitably.
The OUR has been and will continue to be committed to the rule of law, and the transparency and integrity of the procurement process while it strives to achieve the required generation capacity at affordable prices for all Jamaicans.
OUR moves to next-ranked bidder
The OUR will proceed to offer the opportunity to provide baseload-generating capacity to the national grid to the second-highest-ranked bidder as ranked by international consultant, Mott MacDonald.
The OUR will now inform the next-ranked entity, Energy World International/Pacific LNG (EWI), that it has 15 days as of October 4, 2013, to provide its bid bond.
As with Azurest-Cambridge, conclusion of a formal arrangement with EWI is conditional on the completion of aspects of due diligence on the company and its principals by the Financial Investigation Division, which had been requested to carry out this exercise for all bidders.
The basis for the decision
To better inform public discussion and to further clarify the reason for its decision, the OUR considers it important to furnish the following information with respect to its computation of the comparative rates that were offered by the selected entities.
The economic rankings were done in a standardised manner based on the impact of the proposed tariff schedule of each bidder on the system over the expected 20-year contract period.
Rank BidderBid Price Fuel Type
(US c/kWh)
1 Azurest /Cambridge13.90Natural gas
2 EWI14.56Natural gas
3 Azurest /Cambridge 16.35 HFO
4 Energise Jamaica 18.27 Natural gas
5 Optimal 18.30 Natural gas
6 Energise Jamaica21.54 HFO
Background
On September 18, 2013, the OUR and its international consultants, Mott MacDonald ranked the bidders in the project for the procurement of baseload capacity to the national grid as follows:
Highest-ranked bidder: Azurest-Cambridge Joint Venture Association with Waller Marine Inc
Second-highest-ranked bidder: Energy World International Ltd
Third-highest-ranked bidder: Energise Jamaica Ltd (incorporating Amourview Holdings Limited, Tank-Weld Limited and Seaboard Jamaica Corporation)
Fourth-highest-ranked bidder: Optimal Energy
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Monitoring committee proposed for 360-megawatt project
Monday, October 07, 2013
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The island's three main private sector groups yesterday urged Prime Minister Portia Simpson Miller to establish a monitoring committee for the 360 Megawatt project, arguing that it would ensure transparency and credibility in the process.
According to the Jamaica Chamber of Commerce, Jamaica Manufacturers' Association, and the Private Sector Organisation of Jamaica, the committee should be similar in structure and methodology to the Economic Programme Oversight Committee (EPOC), comprising representatives from the Office of Utilities Regulation (OUR), private sector and other stakeholders.
The committee, the groups added, would also be mandated with the task of ensuring that the
360-megawatt project "meets its ultimate goal of significantly lower energy costs for both residential and business customers".
The call comes in the wake of recent controversial developments in the bidding process for the proposed power plant.
Last Friday, the OUR cancelled the preferred bidder status it had granted to United States-based consortium Azurest-Cambridge after the firm failed to meet its deadline to produce a bid security of one per cent of its proposed US$690-million investment
in the energy facility, which was required by midnight October 3.
The OUR then promoted Hong Kong firm Energy World International (EWI) to the position, further fuelling controversy over EWI's entry to the process more than a month after the bids had closed
The OUR had confirmed that Azurest-Cambridge, which was chosen as the preferred bidder based on an assessment done by consultant Mott MacDonald, had requested an additional 15 working days, as of October 4, to furnish the bond. The request was, however, denied.
Last month, Contractor General Dirk Harrison criticised Energy Minister Phillip Paulwell for accommodating EWI's late entry and recommended that the firm be excluded from the bid process as the intervention was improper. Harrison also said that the consequent acceptance of the proposal by the OUR was unfair and compromised the integrity of the process.
Harrison recommended, among other things, that the Parliament implement legislation to preserve the independence of Independent Regulators and Regulating Bodies, and sanctions for those who interfere with their authority.
Paulwell, however, has since explained that the decision to admit EWI was that of the Cabinet and not his.
Yesterday, the groups said they will outline their request in a letter this week to the prime minister and request "an urgent meeting to discuss the developments in the project over the last few months and the way forward".
The Economic Programme Oversight Committee, which comprises stakeholder representatives from the private sector, trade unions and government, was established to monitor the compliance and progress of government ministries, departments and agencies with regard to the implementation of the IMF agreement.
The committee has authority to inform the public of its findings.
Read more: jamaicaobserver.com/news/Monitoring-committee-proposed-for-360-megawatt-project
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360MW PROJECT: Contractor General mum on Energy World International as preferred bidder
jamaica-gleaner.com
Published: Monday October 7, 2013 | 6:00 pm 0 Comments
KINGSTON, Jamaica:
Jerome Reynolds, Staff Reporter
Contractor General Dirk Harrison is remaining mum on the emergence of Hong Kong-based Energy World International (EWI) as the preferred bidder for the project to provide 360 megawatts of power to the national grid.
EWI was selected after Azurest Cambrige Power failed to meet last Friday’s deadline to come up with the US$6.9 million project bond.
The Contractor General had objected to the company’s inclusion in the bidding process as he said his special investigation found that EWI benefited from what he called the irregular and improper intervention of Energy Minister Phillip Paulwell.
Harrison insisted that the acceptance of EWI’s bid by the Office of Utilities Regulations (OUR) was unfair and compromised the integrity of the bidding process.
The OUR and Paulwell have dismissed the claims and have maintained that the 360 megawatt project bidding process was above board.
Harrison declined to comment when contacted this afternoon by our news centre about the fact that EWI is now the preferred bidder
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Energised - 360MW third-ranked bidder questions OUR's due diligence, claims it has cash ready for bond
Livern Barrett and Anastasia Cunningham, Gleaner Writers
The Jamaican consortium still clinging to hopes that it will get the nod to build the island's much needed 360-megawatt power plant has blasted local regulators, charging that they have been "less than vigorous" in the due diligence required for a project of this size.
The sharp criticism from Energise Jamaica Limited (the third-ranked bidder) comes days before Stewart Elliot, the executive chairman of Energy World International (EWI) - the company that is now the preferred bidder for the project - is scheduled to arrive in the island to sign off on the project.
Citing one example, Energise Jamaica made reference to the assertion by EWI, in its bid, that it was prepared to start operations using liquefied natural gas (LNG) from its own gas fields in Indonesia at an offer price of US$0.14.56 per kilowatt hour.
"We challenge the OUR [Office of Utilities Regulation] to disclose whether any bidder submitted valid and legally binding supply contracts for LNG," the consortium said in a statement yesterday.
Further, the company challenged the OUR to tell the country the price at which EWI would sell energy to the national grid if the new 360-megawatt plant is to operate on non-LNG fuel.
"This is, potentially, an extremely dangerous and costly shortcoming," Energise Jamaica warned.
Quoted source
The consortium, which was seeking to clarify aspects of its bid for the project, said it quoted a price of approximately US$0.16.7 per kilowatt hour using LNG and approximately US$0.19.9 per kilowatt hour using heavy fuel oil (HFO). The company said in both cases it provided the OUR with a source of supply.
However, an OUR release said Energise quoted US$0.18.27 to provide natural gas and US$0.21.54 for HFO.
Energise principals, led by businessman Christopher Bicknell, noted: "Our HFO price uses one per cent sulphur fuel, a more expensive form of HFO. We have been reliably informed by multilateral debt financiers, during our extensive due diligence, that they are unlikely to support cheaper, less clean and more polluting form of HFO for a plant the size of a 360MW."
The statement continued: "It is possible that ... the authorities are unaware of this reality."
The company said it proposed a limited period of no less than 24 months to run the plant on HFO before switching to LNG.
Touting its own bid, Energise Jamaica said it would have no difficulty coming up with the one per cent bid bond to secure the contract. The company said it already has US$100 million of committed equity capital earmarked for the project.
"We believe no other bidder has anything remotely close to this amount of capital that can be dedicated to this project," the statement said.
"That requires no further due diligence," the company boasted, noting that it has a commitment from US Fortune 500 company, Seaboard Corporation.
On Friday, following the failure of the highest ranked preferred bidder, Azurest Cambridge Power, to meet the deadline to pay the one per cent security bond to secure the contract, the OUR named EWI as the next preferred bidder. The OUR refused to grant Azurest Cambridge the 15-working-day extension it requested.
EWI now has 15 days to pay a security bond, which would take them to October 19.
Money secure
Elliot told The Sunday Gleaner in an article published yesterday, that the process was already in place to secure the US$7.4 million bond to meet the deadline.
If EWI is unsuccessful, the contract would then be offered to Energise Jamaica.
Despite being sidelined, the principals of Azurest Cambridge said they would not be knocked out of the game and have vowed to continue their efforts to secure the investment capital needed to build the 360-megawatt power plant.
OUR's ranking of the bidders in the project to provide baseload capacity to the national grid had Azurest Cambridge in first place, followed by EWI, then Energise Jamaica Ltd, then Optimal Energy.
The 360-megawatt plant, which is expected to supply half of Jamaica's energy needs to the national grid, is desperately needed to slash Jamaica's high energy bill.
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360MW rankings revealed too early
Published: Monday | October 14, 2013 5 Comments The Office of Utilities Regulation (OUR) appears to have named the now-sidelined Azurest-Cambridge Power consortium as its preferred bidder for a new 360-megawatt electricity generating facility more than a week before its consultants confirmed that the consortium had proposed the best deal. This according to documents obtained by The Gleaner. The publicly released version of the final summary report from the Ireland-based consultants, Mott MacDonald, is dated September 26, eight days after Ansord Hewitt, the OUR's director of regulation, policy, monitoring and enforcement, told journalists in Kingston that Azurest-Cambridge was selected the top bidder. When contacted for comment yesterday, Yvonne Nicholson, the OUR's director of consumer and public affairs, said the entity would seek to verify the accuracy of the allegation. While the final document appears not to have affected Azurest-Cambridge's top ranking, compared to its position in a version of the final report dated 13 days earlier, this revelation is likely to deepen the controversy over the OUR's management of the bids for the energy facility, including its involvement of the Hong Kong-based Energy World International (EWI) in the exercise. Questions are likely to include how could Hewitt, on September 18, formally declare EWI - now the preferred bidder after Azurest-Cambridge failed to meet a 15-day deadline to make a US$6.9 million security deposit - as the second-ranked bidder, eight days before Mott MacDonald's report that confirmed EWI as being rightfully in the frame. Absence of critical info Although on the face of it EWI had the best project, Mott MacDonald, in a September 13 version of the final report, had exempted EWI from a rank because the absence of critical technical information prevented the consultants from completing a full economic comparison of its project against that of the other bidders. Azurest-Cambridge, in that September 13 document, was at the top of the list, but Mott MacDonald conceded that "the above ranking may change if the required information from EWI is received". It is not clear when the consultants received the additional information, but at the September 18 press conference Hewitt declared: "If Azurest-Cambridge (the preferred bidder) fails to post this bond (one per cent of the project cost), the OUR will proceed to offer the opportunity to provide the facility to the next ranked entity (EWI)." In the final document, the consultants concluded that despite all the bidders having failed to meet the benchmark for project financing, Azurest-Cambridge's bid, offering a gas-fired power plant, was the "best option". According to an OUR report, the now-sidelined project was supposed to produce electricity at US13.90 cents per kilowatt hour (kWh), cheaper than EWI's US14.56 cents. With that price, EWI, based on its proposal, would generate electricity near seven cents, or approximately a fifth cheaper than what Energize Ltd - a consortium that includes the Jamaican firms Tankweld and Mussons Jamaica - say they would do for two years, burning heavy fuels until natural gas becomes available. EWI remains controversial At that time, Energize would reduce the price of its generating cost by US3.27 cents, or 15 per cent, by converting to gas. But even at that, Energize's electricity would be nearly US1.8 cents, or more than 12 per cent more expensive than what EWI says it can do. Yet, EWI remains controversial. Critics say that little is known about the company, whose main operating vehicle, Energy World Corporation is listed on the stock exchange in Australia, where it runs a power plant and has small natural gas facilities. This is compounded by the manner in which it was brought into the bidding process. It was a late entry, which those who oppose it insist compromised the Government's procurement rules - an argument with which Contractor General Dirk Harrison agreed in a recent report. EWI was brought to the table by the energy ministry after the OUR's initial date had passed for the receipt of unsolicited bids for the energy project. Officials argued that, given Jamaica's need to lower high and commerce-crippling electricity prices, it would be foolish to ignore a potentially good proposal. jamaica-gleaner.com/gleaner/20131014/lead/lead3.html
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360MW plant bidders object to calls to scrap process Published: Wednesday | October 16, 2013 0 Comments Livern Barrett, Gleaner Writer The third- and fourth-ranked bidders for the proposed 360-megawatt power plant have indicated that they are not in support of a call by influential private-sector and civil-society stakeholder groups to scrap the entire bid process. Persons close to Energize Jamaica and Optimal Limited told The Gleaner last night that while they understand the position taken by the stakeholder groups, "we don't see why we should be at fault for a weak process". "It is not necessary to restart the process if you negotiate with the credible bidders," explained one person close to both entities, after they outlined their position in a joint statement sent to The Gleaner late yesterday. The statement came hours after the stakeholder groups, led by the Private Sector Organisation of Jamaica and the Jamaica Civil Society Coalition, declared they have lost confidence in the bidding process for the power plant, which is a critical part of the Government's plan to reduce the country's energy cost. As a result, the groups, which also include the Jamaica Exporters' Association and the Jamaica Manufacturers' Association (JMA), want the bid process aborted and restarted from scratch. They conceded that this would further delay the project, but argued that it would be better to "make the tough call now" rather than wait to find out that it cannot be completed or will not deliver the promised electricity savings. "We just don't have the confidence in the process," insisted JMA President Brian Pengelley. "Every day we are seeing more and more information that raises more and more questions," he said. It was the same argument advanced in a joint statement issued yesterday by the stakeholder groups, which also included the Micro Small and Medium-sized Enterprises Alliance. CAUSE FOR CONCERN At the centre of their concerns, the groups said, were the issues raised by the Office of the Contractor General about the bidding process and reports this week that the Office of Utilities Regulation (OUR) announced the final bid ranking eight days before receiving the final evaluation report from consultants Mott McDonald. "The groups concluded that very little substance has been offered by the OUR to satisfactorily address both the raft of questions surrounding the management of the tender exercise and the reputational issues now facing the preferred bidder," the stakeholders asserted in their statement. "We consider this the tipping point, which can lead us to take no other position than to call for the process to be aborted," the statement continued. While disagreeing with the stakeholder groups, Energize Jamaica and Optical Limited said they remained concerned about the "less-than-smooth administration of the selection process to date". "We believe that the evaluation process has fallen short on critical analysis and underweighted an assessment of the credibility of the claims of bidders," both bidders asserted. "We have submitted credible, bankable bids," they insisted. Last month, the OUR selected the consortium of Azurest-Cambridge as the preferred bidder for the project. However, the failure by the consortium to come up with the bid bond of US$6.9 million caused the OUR to move to the next bidder in line, Energy World International (EWI). In a report released last month, the Office of the Contractor General raised several concerns about EWI's inclusion on the process. Last night, The Gleaner was unable to reach representatives of either Azurest-Cambridge or EWI for comment. livern.barrett@gleanerjm.comMore Sharing ServicesShare | Share on facebook Share on myspace Share on google Share on twitter
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Energy World provides OUR evidence 360MW bid bond in hand Published: Thursday | October 17, 2013 Comments 0 The Gleaner understands that Energy World International (EWI) has provided the Office of Utilities Regulation (OUR) with evidence it has secured US$7.4-million to cover the required bid bond for the 360-megawatt project. However, sources say the funds are with a financial institution located in Hong Kong, with which Jamaican financial entities have never done business. The OUR reportedly wants to have the funds in hand before making any announcement on whether EWI has secured the US$6.9-million bond. EWI was named the preferred bidder for the project after Azurest-Cambridge failed to meet its given deadline to present its bid bond on October 3. The deadline for EWI to hand over its bid bond is tomorrow.
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Shaw presents policy framework, weighs in on 360 megawatt controversy
6:27 pm, Thu October 17, 2013 RJR news online Audley Shaw, Jamaica Labour Party leadership aspirant, has weighed in on the controversy surrounding the 360 megawatt energy project, calling it a fiasco. The outgoing JLP Deputy Leader who spoke at a news conference on Thursday, said if elected leader, his primary focus will be on finding an energy solution for residential and commercial users. This, he said, includes separating the two so that there is a lower rate for consumers who use less than 200 kilowatt hours per month. Mr. Shaw who used the news conference to present his policy framework, outlined his five areas of focus which are education, energy, employment, the economy and empowerment. In his presentation dealing with the economy, he called for the continuance of the Junior Stock Market along with examining tax reform while expressing concern about the low growth being experienced by the economy. “The economy is just not growing and many Jamaicans are out of work and are feeling very frustrated. It has not escaped our attention that for the past six consecutive quarters since the present government has come to power here has been decline in the economy; there has been no growth in the economy,” said Mr. Shaw. His manifesto continued to outline his plans for the education sector with his focus on the early childhood level being fully integrated into the formal education system. Mr. Shaw also added that there needs to be a push for skills training to fit areas of need in the job market so as to reduce the high levels of unemployment.
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Aborting 360 megawatt bidding process not good for Jamaica – JPS 7:10 am, Wed October 16, 2013 rjrnewsonline.com/local Kelly Tomblin The country's main supplier of electricity, the Jamaica Public Service Company (JPS), has expressed reservations about growing calls for the bidding process for the 360 megawatt project to be aborted. On Tuesday several private sector bodies and civil society groups called for the exercise to be scrapped, given the controversy swirling around the project. However, Kelly Tomblin, President and CEO of JPS, does not believe this is a good idea. She told RJR News Tuesday night that the energy project needs to go ahead immediately as her company is struggling to keep up with its aging infrastructure. Ms. Tomblin argued that, in any event, there needs to be a good reason to discard the companies in the bidding process. “If we are going to go over the process again I'm really gonna need compelling evidence that the bidders we have in front of us are not good for the country,” said Ms. Tomblin. She said time is of the essence for her company as it has been having difficulties with some of its plants. The JPS CEO added that, before taking any drastic step, consideration should also be given to whether the decision benefits the country. Meanwhile, the challenges facing the JPS were highlighted Tuesday night when the company had to carry out load shedding, due to a shortfall in generating capacity. JPS reported that several of its units, along with those of independent power producers, were off-line because of problems that developed over the last 24 hours. The units went off-line at the same time others were down for planned maintenance. As a result, there was insufficient generating capacity to meet the increase in demand from 6 to 10 pm. The areas affected were in Kingston and St. Andrew, St. James, St. Mary, St. Catherine and Trelawny. Opposition intensifies calls for scrapping of bid process in 360 megawatt project 6:49 am, Thu October 17, 2013 Gregory Mair The Parliamentary Opposition is intensifying its push for the scrapping of the bid process for the 360 megawatt project. According to Gregory Mair, Spokesman on Energy, the present state of the tender, managed by the Office of Utilities Regulation (OUR), is untenable. In a statement, Mr. Mair noted that from inception the process has been marred by controversy as well as lack of transparency. He also pointed out that the OUR is yet to release the Mott McDonald report. In light of the growing lack of confidence expressed by various civil society and private sector groups, Mr. Mair said the process has lost credibility and is not worth pursuing. The Opposition is again calling for the Jamaica Energy Council or a similar grouping as suggested by the private sector and civil society groups to be appointed and mandated with the task of exploring and recommending the best path for the Government to take.
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EWI delivers - Energy minister welcomes bid bond Published: Saturday | October 19, 2013 0 Comments Phillip Paulwell Phillip Paulwell RIGHT ON schedule, Energy World International/Pacific LNG (EWI) posted its bid security as a condition of its selection as the preferred bidder to construct Jamaica's much-needed 360-megawatt power plant. The US$7.37 million bond, which was due yesterday, represents one per cent of the total cost of the baseload generating capacity project, which is US$737 million. "This is an important step for Jamaica, as this 360-megawatt plant will deliver a long-awaited reduction in the cost of energy, which is crippling businesses and households alike," Energy Minister Phillip Paulwell said in a statement yesterday. "I now encourage the OUR [Office of Utilities Regulation] to ensure that all future timelines are agreed and adhered to, and that Jamaica secures the lowest price possible for energy." CHEAPER ENERGY A PRIORITY The minister added: "Jamaica needs cheaper energy, and we need it urgently. The Government has made this a priority, and we will not be deterred from our pursuit of this critical objective. This development represents a small step along the path to that goal, and my ministry will be closely monitoring the ensuing activities and playing a facilitatory role, where appropriate, to ensure that progress is made without undue delay." Paulwell is currently in Geneva, Switzerland, attending the inaugural meeting of the International Telecommunication Union's Smart Sustainable Development Model Advisory Board. The OUR named EWI as the preferred bidder on October 4, after the highest-ranked bidder, Azurest-Cambridge Power, failed to meet the 15-day deadline to pay its security deposit. CONTROVERSY EWI's inclusion among the list of four bidders has been shrouded in controversy, with Contractor General Dirk Harrison asking that it be excluded from the list, because its bid was facilitated after the cut-off date of March 15, 2013. However, the OUR hit back, saying that based on the informal nature of the process, it could lawfully accept and consider EWI's bid. The Hong Kong-based company had proposed to use natural gas from its own gas fields in Indonesia and made an offer price of US$0.14.56 per kilowatt-hour. EWI will now have to commence negotiations with the Jamaica Public Service for 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 company will also be setting up local offices. According to the OUR, the submission of a bid bond is a security to indicate the preferred bidder's interest in pursuing the project. The bond is forfeitable if the bidder fails to proceed with the project, and refundable upon the successful completion of the project. The next upcoming phase of the project is the posting of the five per cent performance bond, which will be due prior to construction. This is a guarantee against the entity's performance and, like the bid bond, is returnable and forfeitable. anastasia.cunningham@gleanerjm.com
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Can the new electricity generating capacity return big savings? 360MW: Real or hype? BY CAMILO THAME Business co-ordinator thamec@jamaicaobserver.comWednesday, October 23, 2013 Print this page Email A Friend! THE fuel rate on electricity bills climbed by 6.1 per cent this month. What's more, at $27.17 (26.1 US cents) a kilowatt-hour (kWh), the rate Jamaica Public Service (JPS) charges for the cost of generating and buying electricity from independent power providers is 21.5 per cent higher in October than it started the year. And that doesn't include the non-fuel rates and demand charges, which were increased by 10 per cent across-the-board to adjust for inflation following approval by the Office of Utilities Regulation (OUR) in June. Certainly for foreign exhange earners, the rise in electricity cost may seem less daunting, given that the Jamaican dollar lost 13 per cent of its value since the start of the year. And promises of cheaper electricity to come by 2015 may seem like a beacon of light for most, now that the preferred bidder for the 360 megawatt generation plant — Energy World International/Pacific LNG (EWI) — has ponied up its US$7.4 million bid bond. The company, which plans to build a natural gas-fired plant for US$737 million, is supposed to commence negotiations with JPS 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", according to the OUR. Ground is scheduled to be broken by next January. But Business Observer calculations show that EWI's proposed price is not likely to result in a significant reduction in electricity cost. Indeed, 14.56 cents per kWh is less than the fuel rate now, but residential customers pay an additional 15.3 US cents per kWh (after the first 100 kWh), while commerical customers pay 13 US cents. Industrial customers pay a far lower non-fuel rate of 3.5-3.7 US cents a kWh, but they also pay a demand charge (applied to consumers with heavy loads such as industrial motors) — in 2012, JPS collected $5.2 billion from demand charge compared to $4.6 billion from the energy charge. All the same, come 2015 when old plants rated at 292 MW are taken off line and 68 MW is added to the grid (not including 78 MW to be added by renewable energy sources), the new generating plant will represent approximately 36 per cent of total installed capacity. In other words, 64 per cent of the fuel rate will still be based on what exists now. So if EWI is able to deliver at its proposed price, the fuel and IPP rate may decline to 21 US cents across the board. Assuming the price paid for electricity for the additional 58 MW of wind energy and 20 MW of solar-powered generation that has been approved is just as low as EWI's bid, the fuel rate may even fall below 20 US cents. Of course, further depreciation of the Jamaica dollar can go a far way towards making electricity even cheaper for exporters, but for most a higher valued greenback means pricier energy. In any case, the OUR said that EWI's proposal may be "less attractive in reality than they appear in the modelling exercise as the provided heat rates and capacities are quoted in ISO conditions unadjusted for the ambient conditions of Jamaica". "The average temperature in Jamaica is higher than the ISO temperature and it is established that gas turbines are affected more adversely from high temperatures than gas engines," said the OUR in its evaluation. The regulator calculated that the penalty to the efficiency of the plants could reach two percentage points and capacity could be reduced by 10 per cent of the stated ISO net capacity. Another factor to consider is the five-year annual tariff review, which is due in 2014. In 2009, the last time the periodic review was done, the OUR approved rate increases ranging from eight to 51 per cent, depending on the type of custome Read more: jamaicaobserver.com/business/360MW--REAL-OR-HYPE
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PIOJ dialogue for development lecture - Attacking crime with capital Published: Friday | November 29, 2013 0 Comments Medium-term growth could be spurred by concluding projects in energy and investing in security, says the president and CEO of Sagicor Life Jamaica Limited. The planned 360MW plant and a capital investment in technology and the needs of the security forces would have a positive impact on other sectors, Byles said. "We must try to make way in our capital budget for this investment. The payback is enormous," he asserted while delivering the 2013 PIOJ Dialogue for Development Lecture on Tuesday. Byles itemised the cost of crime as including security expenses incurred by companies, business and investment foregone; prices discounted; health-care costs; as well as the impact on tourism. "If Jamaica could earn an additional US$50 per room per night because it didn't have the level of crime we do have, that would mean US$275 million more per year in gross earnings. That would change the economics of the hotel business considerably," he said. "New rooms would be constructed, foreigners would buy villas, timeshares and more linkages would be created, with positive effects for employment and foreign exchange earnings." Violent crime has been on an upward trajectory for the last 40 years. It's been estimated that the security forces need about US$200 million (J$21b) over four years for technology, plant and equipment, said Byles. "We need to find the room in our capital budget to fund this investment," he said, adding that long-term crime prevention would also "involve major investments in our inner cities/informal communities in the areas of housing, health, education, sanitation services and infrastructure". As to Jamaica's energy conundrum, Byles said execution of the 360MW liquefied natural gas (LNG) plant project could alleviate a portion of the cost of electricity, which he equates to a "tax" on business. "The project is impatient of debate," he declared. "The latest data suggest electricity costs Jamaicans US$0.38-US$0.42 per kilowatt hour. Electricity accounts for 30 per cent of the total fuel bill of US$2.6 billion or approximately US$780 million. If we assume the saving from the new 360MW plant will be at a minimum 20 per cent, that translates to US$0.30 per kWh and removes a 'tax' on business - freeing up money for investment." That amount of savings would reduce US-dollar consumption by more than US$156 million and increase consumer purchasing power; and, were JPS to press ahead with plans to fuel its Bogue plant with LNG, there could be further savings of US$40 million, he adds. Neither project is expected to be finalised before 2016. But when they are commissioned, "Both these projects should have a massive positive impact on our balance of payments," Byles said. He noted, as well, that the responsible authorities should be planning a coal plant predicated on a revival of the bauxite sector. ("Coal can produce power at about US$0.12 per kWh. We should be making decisions on this now," he said.) Bad idea avia.collinder@gleanerjm.com
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Samuda calls for more info on progress of 360 MW plant BY BALFORD HENRY Senior staff reporter balfordh@jamaicaobserver.comThursday, January 09, 2014 2 Comments Print this page Email A Friend! SAMUDA… says information given is insufficient OPPOSITION Spokesman on Industry, Investment, Commerce, Mining and Energy Karl Samuda says the country needs more details on the progress of plans for the 360 megawatt energy plant. Speaking Tuesday at a Jamaica Labour Party (JLP) post shadow cabinet meeting press briefing at the party's headquarters, Belmont Road, Samuda described the information coming out of the Government on the process as "insufficient". He said that the country must recall that the Government still owns some 20 per cent of the shares in the Jamaica Public Service Company (JPS) and, therefore, must be aware of any financial involvement of the company in the process, and must have an impact on how it goes forward, as well. "We are calling on the Government and the JPS to bring forward more details on exactly what the proposal is, what we are looking for and what progress has been made with the terms of reference for the monitoring unit," he said. Last October, the island's three main private sector groups -- the Jamaica Chamber of Commerce, Jamaica Manufacturers' Association, and the Private Sector Organisation of Jamaica -- urged Prime Minister Portia Simpson Miller to establish a monitoring committee for the 360 Megawatt project, arguing that it would ensure transparency and credibility in the process. They suggested that it should be similar in structure and methodology to the Economic Programme Oversight Committee (EPOC), and comprise representatives from the Office of Utilities Regulation (OUR), private sector and other stakeholders. The committee would be mandated with the task of ensuring that the 360-megawatt project "meets its ultimate goal of significantly lower energy costs for both residential and business customers". The call followed the OUR's cancellation of the preferred bidder status it had granted to United States-based consortium Azurest-Cambridge, after the firm failed to meet its deadline to produce a bid security of one per cent of its proposed US$690-million investment.The OUR then promoted Hong Kong firm Energy World International (EWI) to the position, further fuelling controversy over EWI's entry to the process more than a month after the bids had closed Samuda said that since the announcement last year that EWI had been selected the preferred bidder, the country has heard very few details on the issue which, he said, is critically linked to the economy. Minister of Science, Technology, Energy and Mining Phillip Paulwell said recently that Jamaica has remained on track to reduce its energy bill by 2016, through several including the establishment of a 360-megawatt power plant. He said that the energy plant is a critical component of the Government's plans to reduce energy cost from the current rate of US$0.42 cents per kilowatt hour. "That project is on stream, it's on target; we are making sure that not a day slips and that come January 2016, we will see a significant reduction of more than 30 per cent in the price of electric power," Paulwell said
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Construction of 360 MW plant to commence early 2014, OPM says Wednesday, January 15, 2014 | 8:24 AM Print this page Email A Friend! KINGSTON, Jamaica – Cabinet on Tuesday (January 14) received assurances that a programme to install additional power generating capacity is on track with the construction of facilities for the 360 megawatt plant due to begin early this year. The assurance came during a special session to settle capital spending and Ministry priorities for the 2014/15 fiscal year with reports from remaining Ministries “in pursuit of its efforts to ensure effective fiscal management, foster stronger economic growth and increased employment,” a statement from the Office of the Prime Minister (OPM) said. In the Cabinet session special focus was given to implementing procedures to speed-up business registration and other administrative processes to make doing business easier. It was agreed that this should be a priority consideration of the Public Sector Transformation Unit, the OPM statement said. Prime Minister Portia Simpson Miller also emphasised the need to ensure social inclusion and protection of the vulnerable by strengthening the capacity and cooperation of the Ministries of Land and Housing to speed up the transfer of titles to land-owners and settle tenure issues, especially in poor communities, the statement said. Emphasis was also placed on securing adequate resources for the criminal justice system, including the strengthening of investigative resources, provision of greater mobility for the security forces, and a strengthening the court system to ensure the speedier settlement of cases. The Cabinet also agreed that road repairs and the protection and expansion of infrastructure including the ports and airports are essential to the growth agenda and must receive priority treatment in the 2014/15 Budget. Last month, Cabinet held a similar special session to settle the overall strategic priorities for the 2014/15 financial year “including the maintenance of fiscal stability, preservation of national security and justice, infrastructural and human resource development and social protection programmes, the OPM said.
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Lights out for EWI - Firm to lose 381-megawatt power plant licence, project likely to be yanked from Paulwell Published: Tuesday | May 6, 2014 28 Comments Gary Spaulding, Senior Staff Reporter Energy World International (EWI) yesterday suffered the same fate as Azurest when a decision was taken that the -contract to construct a 381-megawatt plant will be snatched from its grasp, almost a week after it was revealed that the Inter-American Development Bank (IDB) refused to grant a loan to finance the project. Word came late yesterday from a source within the Cabinet that "EWI could not go ahead". At the same time, The Gleaner understands Phillip Paulwell, the beleaguered energy minister, is likely to be separated from the multibillion-dollar project he has been accused of mismanaging. Promises to private sector Highly placed sources told The Gleaner that Prime Minister Portia Simpson Miller carried out promises she made last Friday to disgruntled members of the private sector and civil-society groups who had pulled out of the Energy Monitoring Committee unless EWI was scratched. As Paulwell reeled under pressure, the Government buckled, promising that the recommendations from the Jamaica Chamber of Commerce, the Jamaica Manufacturers' Association and the Private Sector Organisation of Jamaica would be taken on board. This meant that EWI had until 10 o'clock yesterday morning to fulfil its requirement, but failed, forcing Paulwell's hand. Simpson Miller has reportedly also promised to take on board recommendations that Paulwell be "distanced" from the multibillion project. To this end, Paulwell is expected to announce in Parliament today the establishment of an oversightenterprise committee to ensure transparency in the processes going forward. It is understood that Paulwell and his ministry would, therefore, not be reposed with direct responsibility for the project. The private-sector groups had specifically recommended that the current process be aborted and the licence be rescinded by the Cabinet. They also called for the disbandment of the EMC, and in its place a public-private energy enterprise team be appointed by Simpson Miller, reporting administratively to the Office of the Cabinet through the Cabinet secretary. The Gleaner understands that other stakeholders have been energised into action, with the Jamaica Public Service Company (JPS) and Energise Jamaica ready to make their move. In response to queries from The Gleaner, the JPS proffered: "We await official word from the Office of Utilities Regulation (OUR) and/or the Ministry of Energy regarding the situation with EWI." The light and power company stated that, like the rest of Jamaica, JPS was anxious for the replacement of existing oil-dependent power generation, as this would assist in reducing the cost of electricity for its customers. "We, therefore, remain committed and stand ready to facilitate the construction of new generating plants as soon as possible," the JPS said. More competitive bids Earlier yesterday, Opposition Leader Andrew Holness said he had received "unofficial" word that other bidders were emerging with more competitive bids as Paulwell issued a seven-day ultimatum to EWI to sort itself out. EWI's bid had been set at US$0.1288 and, when the JPS was in the running in direct negotiations with the OUR, the company had proposed around US$0.17. It is understood that the JPS is now proposing US$0.14 and has on the table a 240-megawatt project to cost US$500 million. There is the suggestion of a Floating Storage Regasification Unit and that the JPS could go down to US$0.135. However, it is understood that Energise Jamaica is offering liquefied natural gas-generated electricity at US$0.16 but also floating the idea of going down to US$0.145. The parliamentary Opposition yesterday signalled that there would be no ease-up on Paulwell until Simpson Miller takes over the project. Among Paulwell's alleged follies, Holness characterised as "most devastating" the minister's decision to ignore procedures because "by some dint of his imagination, it is patriotic". To make matters worse, Holness suggested that Paulwell, an attorney by profession, applied "undue influence on an independent commissioner and, in so doing, overstepping his ministerial bounds". Said Holness: "Projects fail when we don't follow well-established procedures ... . It is not in the breaking of rules that we are patriotic, it is in the upholding of rules that we guarantee success and patriotism." He added: "The speedy conclusion of the project is now compromised and I have written to the prime minister to express our grave concern ... . It is apparent that at this stage, the project is uncertain and the credibility of the process has been challenged." Exercise good judgement Holness was quick to qualify his comment when questions were raised about the competence at Jamaica House to take on such project. "The prime minister must exercise her good judgement ... . It may very well mean that she brings in other people who are less involved and connected and who can impartially adjudicate the matters that are there," he said. Added Holness: "It may mean that she assign another minister to carry it through, or it may mean that she herself take it over. It is such a nationally important project. All we are saying is that the authority of the prime minister must be brought to bear in rescuing this project." gary.spaulding @gleanerjm.com
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AUDIO: 'Poppy show' affair says business leaders on EWI licence process Published: Friday May 2, 2014 | 12:53 pm with audio | 17 Comments Christopher Zacca - File Christopher Zacca - File Jamaica’s most powerful business leaders have told the Government to scrap the current process to construct a major power plant in Jamaica and rescind a licence issued to contractors, Energy World International. The Private Sector Organisation of Jamaica, the Jamaica Manufacturers’ Association (JMA) and the Jamaica Chamber of Commerce told journalists this morning that they met with the Prime Minister Portia Simpson Miller yesterday and informed her of their position. Referring to the current process as a 'poppy show', PSOJ president, Christopher Zacca, says the project should be removed from Energy Ministry headed by embattled Energy Minister Phillip Paulwell. He also says the private sector groups have withdrawn their members from the Energy Monitoring Committee because it has been compromised by among other things, the inadequate supply of information. Zacca says Paulwell’s changes to the original licence recommended by the Office of Utilities Regulation is a fatal blow to the credibility of the process. Zacca says the Prime Minister gave no commitment on the recommendations proposed by the private sector groups. However, president of the Jamaica Manufacturers’ Association, Brian Pengelley says if their recommendations are not heeded they will not sit and watch the process continue along the current lines. Meanwhile, while steering clear from the calls that Energy Minister Phillip Paulwell should resign, the private sector groups say somebody should be held accountable for the foul up in the process surrounding the 360 megaWatt project. JMA president, Brian Pengelley says they private sector leaders are currently examining all documents to determine if any legal action can be brought against the changes made to the license issued to EWI by Minister Paulwell.
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Energy Path Set - Lawrence Announces Several Initiatives To Replace 381MW Project Published: Thursday | September 18, 2014 6 Comments A Dr Vin Lawrence-led team, charged with the responsibility of rebooting Jamaica's baseload energy plan, has revealed that the anticipated 30 per cent reduction in energy costs is to be achieved through the implementation of, not one, but several projects, beginning next year. The projects, to include new baseload generating plants constructed by several entities, including the Jamaica Public Service Company Ltd (JPS), Jamalco and Alpart, are expected to all be in place by 2018. During a press briefing at Jamaica House in St Andrew yesterday, Lawrence said JPS has proposed to convert, by 2015, the Bogue Power Station in Montego Bay, St James, to burn gas and replace the existing 292-megawatt (MW) heavy fuel oil (HFO) power plants at Old Harbour in St Catherine and Hunts Bay in St Andrew with a 190MW gas turbine plant, fuelled with liquid natural gas. The timelines put forward mean the project would miss the 2016 deadline for implementation promised by Energy Minister Phillip Paulwell when he announced the establishment of the Electricity Sector Enterprise Team (ESET) in May. "That timing is sacrosanct," Paulwell had declared while making his opening presentation in the 2014-2015 Sectoral Debate in Parliament. ESET was established shortly after Hong Kong-based Energy World International's (EWI) licence was revoked by the Government when it failed to come up with the US$37-million performance bond to undertake the US$737-million construction of a 381MW power generating plant. EWI had emerged the second preferred bidder after Azurest-Cambridge failed to pay its bid bond for the project. Yesterday, Lawrence, who leads the six-member ESET, said the proposals from Alpart include the development of a new gas facility in 2017. Earlier this year, Igor Dorofeev, who runs UC Rusal's operations in Jamaica, told The Gleaner that ethane was being considered to fire the Alpart plant. "We will also have to build all the transmission lines. A 138-kilovolt interconnection line will have to be built in that area to tie in to the system," he said. By the following year, Lawrence added, Jamalco is expected to be on stream with its coal-fired co-generation facility. "The plan is to bring coal from Colombia, which is low sulphur coal. The analysis shows that the emissions at the coal plant will be significantly less than the current emissions from the oil plant," he said. Lawrence said that during the construction of the power plants approximately 2,400 persons would be employed. He said the benefits to be derived from the projects include significant improvement to the voltage stability, grid security, and lower technical losses. "I think a lot of people in some areas may be quite happy about that because some people aren't experiencing the level of stability and grid security that they should be experiencing at this time," he added. Lawrence said the feedstocks of the new baseload power plants will result in lower plant stack emission levels than the current high sulphur HFO feedstock. He noted that that production cost at the alumina plants would be reduced, making the plants more competitive in the global market, and that people who work in the alumina industry would resume their jobs. ESET is to conduct further due diligence of the proposals, including more analysis of the credibility of the fuel sources, financial proposals and development plans within the framework of the least-cost expansion and integrated resource plans. "We also plan to commission independent appraisals... to ensure that Jamaica receives value for the money, and we want support of our team in negotiations with the project sponsors, including JPS and the co-generational developers," Lawrence said. He said coordination would be done with the Office of the Utilities Regulation in engaging the prospective developers and JPS to formalise the terms of the generating licences and power purchase agreement jamaica-gleaner.com/gleaner/20140918/lead/lead1.htm
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