EDITORIAL - Sensible move by Paulwell

Though tempted, Phillip Paulwell, the energy minister, didn't accede to folly. The Energy Monitoring Committee (EMC) continues to exist.

By this demonstration of good sense, Mr Paulwell has afforded himself greater odds in the bet on which he has staked a substantial part of the fate of the Jamaican economy and his own political future.

As is now known, last week Mr Paulwell formally granted to Hong Kong-based Energy World International (EWI) a licence allowing it to build and operate a 381-megawatt, gas-fired power plant, which is to generate electricity at no more than 12.88 US cents per kilowatt-hour.

However, there are many who are sceptical of EWI's ability to deliver the project by the end of 2015 as promised, and if it does, to generate electricity at the agreed cost. Questions linger about EWI's capacity to raise the more than US$700 million for the project, and there is no bankable assurance that it will able to deliver liquefied natural gas.

As part of the effort to address these doubts, the licence granted to EWI contains performance timelines and penalties for failing to adhere to these criteria, including the possibility of forfeiting more than US$43 million in bonds lodged with the Government.

This is where the EMC is important. Neither the Office of Utilities Regulation nor Mr Paulwell has, at present, the trust of the Jamaican people that either will forcefully hold EWI to the performance timelines. There is, in this regard, far greater faith in the EMC, which is made up of officials from the private and public sectors.

But last week, it emerged that Mr Paulwell, or perhaps others in his ministry, were interpreting the EMC's mandate as having come to an end with the award to EWI of its operating licence. They have since retreated - happily.

For this project is critical. Lowering the cost of electricity - Mr Paulwell has promised by as much as a third from the present US$0.42 per kWh - is important to enhancing the competitiveness of Jamaican firms. It has a greater chance of achievement with the EMC's oversight.

A spin-off for Mr Paulwell of its success is that he will be able to bask in it.

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