IDB withholds $$ for Jamaica power project over procurement flaw

(Jamaica Observer) The country was still waiting for a response from the Government, up to press time Monday, to news reports that the Inter-American Development Bank (IDB) has raised concerns about the bidding process for the proposed 381-megawatt plant which could affect financing of the project by the contractor, Energy World International (EWI).

Radio and television reports said that the IDB flatly told EWI last Friday that it was not prepared to help finance the US$740-million project because the selection process was not in keeping with Jamaica’s procurement procedures.

EWI should have posted a US$37-million performance bond last Friday but failed to do so, raising a red flag about its ability to proceed with the project.

Nationwide Radio, Radio Jamaica and its sister station Television Jamaica quoted from an e-mail, dated April 25, from the IDB’s infrastructure division head to EWI’s chief financial officer, raising concerns about the process by which EWI was selected.

According to reports, the IDB executive said that the bidding process and the ultimate selection of EWI were undertaken in a manner which is inconsistent with IDB internal procedures and policies. As such, the IDB was reported as stating that it would not be able to participate in the project financing.

However, the multilateral agency cautioned that its decision has no bearing on the capacity of EWI, but is driven solely by the procurement procedure utilised by the Office of Utilities Regulation (OUR).

The OUR said Friday that it was reviewing changes to the implementation schedule and licence granted to EWI by Energy Minister Phillip Paulwell. However, the OUR has insisted that it was not in a position to indicate whether the Hong Kong-based EWI had breached its licence by failing to post the US$37-million performance bond which was due by midnight Friday.

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