EDITORIAL - Hands off EMC!

We don't presume Phillip Paulwell to be a fool, or that he is keen to prove us wrong.

In that event, it is unlikely that he intends to disband, or to fiddle with, the Energy Monitoring Committee (EMC) unless it is to strengthen its powers. But then again, even reasonable people, as Mr Paulwell would probably remind us, can sometimes, in their exuberance, even beyond their youth, do silly things.

That is why Mr Paulwell, the energy minister, should continue to declare, as he has done in today's edition, that the EMC will stay in place, and probably be vested with greater powers. Indeed, Prime Minister Portia Simpson Miller must insist upon it.

Perchance it is forgotten, the EMC, made up of people from the private and public sector, was a compromise by the Government to give credibility to the emergence of Energy World International (EWI) as the preferred bidder for a 381-megawatt, gas-fired power plant in the face of scepticism from several quarters, including the contractor general.

Hong Kong-based EWI was a latecomer to the process, whose tender, in the context of Jamaica's desperate need for cheaper electricity, was rightfully accommodated, this newspaper believes.

company's critics

Beyond the process by which privately held EWI was engaged, the company's critics have raised questions and floated innuendos about how it, and its subsidiaries, including listed ones, do business.

They have doubts, too, about whether it (a) can finance a project costing more than US$700 million; (b) will have the LNG to power the plant; and (c) can deliver electricity at the promised 12.88 US cents per kilowatt-hour.

The EMC was to provide oversight, helping to keep all parties honest.

Our sense is that the committee was not happy with the robustness with which the Office of Utilities Regulation (OUR) attended a due diligence into EWI, or the transparency with which that organisation subsequently managed its findings. The committee does not believe it has a full picture.

But to be fair to the EWI, it did pay an initial US$5.7-million security bond after it was named the preferred bidder. It will put up another $37.5-million performance bond after it receives an electricity licence from Mr Paulwell, which should be anytime now, assuming it has not yet happened.

draft licence

Further, the draft licence, to which this newspaper was privy, contained significant performance criteria and penalties, which could compensate for, and help to, assuage some of the doubts that linger about EWI. If it can't perform, it forfeits the cash it has put up and would have to accept a price of half of the value of whatever work it has completed at the time of the project takeover.

So, against that backdrop, we say, get on with it. But with a proviso.

The truth is that people don't trust Mr Paulwell and the OUR to either aggressively, or effectively, enforce the criteria to which EWI is to be subjected. That's why there is serious disquiet, captured in the statements of the Private Sector Organisation of Jamaica, the Jamaica Chamber of Commerce, and the Jamaica Manufacturers' Association, that Mr Paulwell plans to be rid of the EWC. It supposedly has done its work.

Not so! Its real work is just beginning: telling us whether the project is on track and at the price we were promised.

The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.