Joint statement from Jamaica private sector re 360MW Project

Joint Statement on the 360 Megawatt Project by the Jamaica Chamber of Commerce (JCC), the Jamaica Manufacturers Association (JMA), and the Private Sector Organisation of Jamaica (PSOJ)

Kingston, Jamaica – 2 May 2014: The Energy Monitoring Committee (EMC) is a joint public/private oversight group which was established arising out of concerns with the lack of transparency and credibility surrounding the 360 Megawatt Project. These concerns were expressed by the JCC, JMA, and PSOJ in a letter to the Hon. Prime Minister on October 8^th 2013, following the disqualification of Azurest Cambridge, the preferred bidder at the time, and the subsequent elevation of EWI to preferred bidder, despite our supporting the view of the Contractor General that the process was flawed. This position was supported by the Jamaica Civil Society Coalition (JCSC), which also asked for the EMC to be formed.

We wish to make it clear up front, that while we have serious concerns around the process that has been followed with the award of the contract to EWI and subsequent events, we are appreciative of the partnership that has been developed between the Government, under the leadership of the Hon. Prime Minister, and the private sector, and we will continue to work to preserve this relationship.

On April 13^th this year, in two separate releases, the JCC, JMA, and PSOJ, strongly supported the continuation of the EMC and pointed to the fact that its disbanding would not serve the country's best interests, and would lead to a further deterioration of the credibility and lack of transparency in this critical national project.

Sadly, we have to announce today a change in this position.

The EMC has to this point done the best job possible in the absence of adequate information, and under the constraints of confidentiality agreements, and for this we commend the members, in particular the Co-Chairmen. However, recent events have led us to question the ability of the EMC to function in a viable way as a valued partner of the Government, and serve the public's interest rather than being a bystander to the process.

In particular we refer to the fact that, due to the courageous action of the OUR in posting the original April 4^th and restated April 14^th Licenses granted to EWI on its website, we learned only on April 30^th that the Minister of Energy, the Hon. Phillip Paulwell had substantially amended, and in our opinion seriously weakened, the original License he had signed.

The original April 4^th License had been recommended to the Minister by the OUR in consultation with stakeholders, including the EMC. We have since learned from our representatives on the EMC that they were first able to see the terms of the restated April 14th license on Thursday, April 24th and were unable to share the details with us due to strict confidentiality requirements. In discussions with our representatives since yesterday, they have confirmed that no discussions were held with them regarding the changes to the original license prior to the new restated license being signed on April 14^th, and they have also confirmed that they are seriously concerned by a number of changes in the new license.

This development, when coupled with the facts that:

·       EWI has failed to post their US$37 Million performance bond within the time frame required ;

·       EWI has been granted an indefinite extension by the Minister without reference to the OUR or the EMC;

·       The original US$7 Million bid bond posted by EWI has now expired and therefore no longer protects the country; and

·       The stated position of the IDB that they will not finance the project due to the flawed procurement process,

have all led us to the view that the entire project has reached a point of crisis, has lost all credibility, and that further participation in the EMC oversight process is ineffective under the current structure and falls short of the mandate given to the committee.

Therefore effective today, our three organizations, the JCC, JMA, and PSOJ, have decided to suspend our support for the EMC, and have instructed our representatives to no longer participate in its activities.

However we are mindful that the provision of new generation capacity is very important to all of us in Jamaica and we are prepared to re-engage and support a new and transparent process dedicated to finally bringing new generation online.

We would like to state what we see as the fundamental changes required for us to once again support and re-engage in the 360 Megawatt generation project:

1. The current process be aborted and the License rescinded by the Cabinet.
2. The EMC be disbanded and replaced by a joint public/private Energy Enterprise Team which would oversee and advise on the granting of a new 360 Megawatt License, and which would operate under the Government's current Public/Private Partnership (PPP) policy administered by the Development Bank of Jamaica, and operating in a similar way to the teams currently divesting the Port of Kingston and the Normal Manley Airport.
3. The Energy Enterprise Team should be appointed by the Hon. Prime Minister in consultation with her partners at the Partnership for Jamaica, and report administratively to the Office of the Cabinet through the Cabinet Secretary.
4. The Enterprise Team would be immediately tasked with recommending the next steps in this process to the Cabinet as soon as is possible.

Signed:

Francis Kennedy, President JCC
Brian Pengelley, President JMA
Chris Zacca, President PSOJ

May 2, 2014