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Azurest was best option for 360MW project - consultants
2013-10-01 10:17:30 | (0 Comments)
Arthur Hall, Senior News Editor
None of the four entities which submitted proposals to provide 360 megawatts (MW) of base energy to Jamaica were able to convince the consultants that they could source the money to finance the project.
The international company, Mott MacDonald, which was employed by the Office of Utilities Regulation (OUR) to evaluate the proposals is reporting that none of the bidders even achieved the minimum 75 per cent score in the category “ability to finance the project” which they needed to qualify for selection.
This forced the consultant, on the advice of the OUR, to use the economic and technical evaluation to arrive at a preferred bidder.
Against that background Mott MacDonald has recommended to the OUR to ensure it sees the money before finalising any agreement.
“In the event of selecting the preferred bidder, Mott MacDonald would expect further investigation/due diligence of the bidder before contractual negotiations are undertaken.
“It should be noted that such due diligence will help to mitigate the exposure to possible high levels of risk associated with proceeding with any of the bidders based on the results of the financial evaluation,” said the consultant in its report to the OUR.
According to Mott MacDonald, the Hong Kong based Energy World International (EWI) submitted the most technically sound bid, however, the eventually preferred bidder Azurest/Cambridge was the most economically advantageous of the proposals received.
Details of the Mott MacDonald recommendations are contained in the executive summary of its evaluation released by the OUR in the wake of speculation that the announced preferred bidder was not the one selected by the consultants.
Opposition spokesman on energy Gregory Mair, last week claimed the Azurest/Cambridge was given the nod at the last minute only because Contractor General Girk Harrison had released a damning report on the decision to include EWI in the process.
However, Mott MacDonald said: “The rankings show that the best option is the Cambridge – Azurest LNG option followed by EWI’s options and then, surprisingly, by Cambridge – Azurest HFO option”.
The consultant further stated that while the natural gas fired proposal from Azurest/Cambridge was the most economically advantageous of the proposals received there were some serious concerns.
“Cambridge-Azurest has achieved a high score in the Technical Evaluation but has failed to meet the required minimum 75 per cent score in the evaluation of ‘Ability to Implement’, “ said Mott MacDonald.
“Further study of the financial strength of Cambridge-Azurest is, therefore, recommended,” added the consultant.
In terms of EWI, Mott MacDonald said its bid had some uncertainties as the fuel costs were not calculated correctly while the heat rates and the capacity were not adjusted for ambient.
“EWI score highest in the technical evaluation at 90 per cent while Azurest/Cambridge are at 87.6 per cent. The remaining two bidders, Energise Jamaica (Seabord) and Optimal are level at approximately 76 per cent.”
The OUR gave Azurest/Cambridge 15 days (October 3) to submit a security bond representing one per cent of the total investment cost of the project and to provide evidence of its ability to execute the project.
If it fails to post this bond, the OUR will proceed to offer the opportunity to offer the next ranked entity, EWI, which Contractor General Dirk Harrison had ruled should be excluded from the list of entities to be considered.
Principals of Azurest have said they are confident that they will meet the deadline.
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Source: The Gleaner/Power 106 News
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