OUR delays 480MW-project bids by one month
Published:Wednesday | March 23, 2011 | 12:00 AM
The Office of Utilities Regulation (OUR) has extended the bid deadline on its 480MW-power-generating project to April 29, but gave no reason for the extension.
Prospective investors, however, had asked for more time to configure their bids.
The project is expected to replace 292MW of generating capacity now provided by ageing plants, while adding a net 188MW of new generating capacity to the current 820MW grid.
Bids for the project, to be done on a build-own-operate basis, was originally set for the end of March.
The OUR's invitation to bid for the project comes at the same time that the Government is pushing to add liquefied natural gas (LNG) to the energy grid. The regulator has said its points system would favour gas fuelled plants in selecting the winning bid.
However, there have been concerns among some of the 28 local and international companies the OUR asked to tender docu-ments that they have not been provided with the indicative price at which LNG is to be sourced, and as a result fear they may not be able to produce competitive offers.
An executive at one of the firms, who spoke on condition that he not be identified, said he believed there was a mismatch between the Government's gas strategy and the request for proposal (RFP).
"The RFP predicates the use of gas as the base case," said the executive. "I don't think the Government is anywhere in the procurement of gas in the short term to realise harnessing capacity that can burn gas."
Along with the required processing fee of J$100,000, each bidder must also pay one per cent of the total capital cost of the project on each set of proposals and alternative documents.
"It, therefore, means that if my proposal has a suggested cost of $500 million, my bid bond will be $5 million," said the executive. "And already there are concerns in the market that the bid is structured to certain players, which has caused a reluctance by some to participate."
The project represents the largest block of generating capacity ever sought by the Jamaican regulators and is expected to grow the grid's current 820MW of capacity by about 23 per cent, net of the replacement capacity.
Installation of the new generating capacity is scheduled to be commissioned in two phases: 360 megawatts to be installed by 2014, and the remaining 120 megawatts by 2016.