Azurest Cambridge Power wins the Bid for 360MW Power Plant - Minister Paulwell caught in OCG Corruption Probe

The News is out and about, dear readers!

Azurest Cambridge Power has won the bid to supply the 360MW of Electricity to be added to the JPS Co (Jamaica Public Service Company) Grid as stated in “Azurest wins bid”, Published Wednesday September 18, 2013 1:53 pm, The Jamaica Gleaner and “IT'S AZUREST!”, published Thursday, September 19, 2013 BY BALFORD HENRY Senior staff reporter, The Jamaica Observer.

They were one of Five (5) preferred bidders for the project who’d submitted proposals to the OUR (Office of Utilities Regulation) as listed in my blog article entitled “OUR opens 360MW LNG Power Plant Bids as JPS Co forms Energize Jamaica with 3 of the bidders - Friday August 9th 2013 is Jamaica's Power Emancipation Day “. 

Hong Kong based Energy World International held the No. 2 spot and Energise Jamaica, the JPS Co, Tank Weld Limited and Mussons Jamaica Limited consortium came in Third after the lengthy Bidding Process. Azurest Cambridge Power now has fifteen (15) day to submit the US$6.9-million ($703m) Security Bond or Bank Draft and thus seal their claim on the Project.

Azurest Cambridge Power will also have to provide a Security Bond or Bank Draft for at least 50% of the US$690 million to show that they have the required money to undertake the project. Clearly Azurest Cambridge Power will have a problem here…as they don’t have all the money yet!

Otherwise Azurest Cambridge Power  will default to the Second place winner as stated in the article “Azurest to pay US$6.9m deposit for 360mw Energy project”, published Friday, September 20, 2013 BY STEVEN JACKSON Business writer, The Jamaica Observer.

Interestingly they don’t have the full money or even all of the Bid Bond upfront. They plan to raise the money via the floatation of a US$ Denominated International Bond issue via Sterling Asset Management from the local and International Bond market. In essence, we Jamaicans will have to fund their project to the tune of US$690 million, which would explain the OUR’s argument that none of the Bidders could demonstrate that they had the funds to undertake their respective project ideas!

The 411 on Azurest Cambridge Power – Power to the People via a Bond Flotation

Azurest Cambridge Power, which plans to invest a total of US$690 Million over the next five (5) years, is actually a consortium of what may represent the best of Power Engineering in the United States of America:

1.      Cambridge Project Development Corporation, a US-based engineering and Energy and environmental consultancy

2.      Inergix Corp, a US-based Energy sector-focused project management consultancy

3.      Waller Marine, a US-based ship engineering company

Azurest Cambridge Power is confident that they can deliver on the 30% reduction in electricity rates from a high of US$0.42 per KWh to US$0.20 KWh or possibly close to US$0.10 per KWh as they’ve stated in “Azurest: We Are Confident That We Can Cut Power Cost”, published Friday September 20, 2013, by Anastasia Cunningham, News Coordinator, The Jamaica Gleaner.

According to this report, they’ve begun negotiations for the IPP (Independent Power Purchase) Agreement necessary to supply power to the JPS Co Grid from their soon-to-come-online system, which consist of Power Barges running on LNG, not much different from the Jamaica Energy Partners who currently rent the Doctor Bird I and Doctor Bird II Power Barges in Old Harbour Bay!

As a quick reminder Azurest Cambridge Power is proposing the following:

1.      Generator Type: 3-4 Power Barges running Reciprocating Generators supplied by Wartsila Caribbean

2.      Fuel: HFO or LNG (Liquid Natural Gas)

3.      Cost: US$690 million

I’m ok with all of this, even raising the money locally, as I’ve often felt that as Jamaicans, we need to put out money where our mouths are! We are an independent sovereign nation and we desire the trappings of the First World in terms of what they have as it relates to Telecommunications and cheaper Energy to make our Business and Manufacturing successful.

Since it’s what we want, we must be willing to pay the Gold price, Game of Thrones Style, for what we want. Otherwise we’ll forever be a vassal state to investors who’ll do as they please in their interest and not necessarily in the interest of Jamaica, as these multi-nationals are really here to make money.

So albeit due diligence may be undertaken by the GOJ into the OUR’s decision, realistically the Power Barge solution and Azurest Cambridge Power means of financing the Project makes sense, despite the howls of protest from the JLP’s Audley Shaw as stated in the article “Shaw concerned about selection of bidder for power plant”, published Sun September 22, 2013, RJR News.

This is because the LNG Power Barges do not need to be purchased but rented by Azurest Cambridge Power, with the only construction outlay being the building of the on-land substation and other facilities to step down the power produced by the LNG Barge to lower levels to go into JPS Co Grid.

That Sub-station would cost roughly about US$100 million, with the remaining US$560 being raised on the International and Local market via the flotation of a US$ Denominated International Bond Instrument by Sterling Asset Management on Azurest Cambridge Power behalf. This would give potential Venture Capital Investors interested in the development of Jamaica and willing to bet on our success as an up and coming manufacturing giant fifteen (15) days to demonstrate their faith in Jamaica by achieving at least US$345 million or half of the US$690 Project Cost as projected by Azurest Cambridge Power and required by the OUR and the Ministry of Science, Technology Energy and Mining!

While Renting the Power Barges to be anchored off the coast, Azurest Cambridge Power can cover their operating costs by the money they make from the deal with JPS Co. As they go along, not only are they earning money from the Rented LNG Power Barges but they will also be raising more money via the US$ Denominated International Bonds Instrument floated by Sterling Asset Management on their behalf. Eventually they’ll not only achieve the money they need to purchase the LNG Barges outright but also expand their fleet to include an additional LNG Power Barge, doubling the power up to the eventual total of 360MW as per requirements by their Proposed Bid.

In essence no different from the way Projects undertaken by Telecom Provider Digicel in 2000 and Telecom Provider CLARO in 2008; all their money was raised via US$ Denominated International Bonds. Both these Telecom Providers came to Jamaica and invested initial small amounts and based on their cash flow statements, were able to inspire confidence from International investors in their respective countries to raise more capital via the flotation of additional US$ Denominated International Bonds Instruments.

This is the same pathway that Azurest Cambridge Power is pursuing as their means of financing their project, no different from a Mobile Telecom Provider. Quite fitting too, that their LNG Power Barge idea can be in essence considered to be a form of Mobile Power! This is both in terms of the use of Power Barges and the fact that the LNG will be offloaded from a Regasification Gas Plant rather than one that located on Land as argued in my blog article entitled “Samsung C&T Corp of Korea secured for LNG Regasification Plant and Pipelines - Jamaican Contractors to Konshens Do Sup'm in National Project to Secure Jamaica Energy Future”.

Azurest Cambridge Power is thus presenting Jamaicans with a unique opportunity to OWN our Power as opposed to it being owned by uncaring foreigners and multi-Nationals. As is the case with JPS Co, currently owned by a partnership with Marubeni from Japan and EWP (East West Power) from South Korea with the GOJ owning only 19% of the company as stated in the article “Paulwell wants a bigger stake in 360MW plant”, published Wednesday April 25, 2012, The Jamaica Gleaner.

Not that they don’t mean well, but as cheaper Electricity and eventually Energy for everything else is important to Jamaica’s long term future, we should own it, not foreigners as was originally argue by Minister Phillip Paulwell as per my blog article entitled “Phillip Paulwell wants as bigger stake in the LNG Plant - Mr. Vegas Bruk it Down as Jamaica Courts Trinidad and Tobago for LNG”.

Thus a US$ Denominated International Bond of this size, while a very destabilizing procedure due to the amount of foreign currency it’ll take out of our Economy, is an indication of the level of investment required to achieve what we want. In other words, in Jamaican patios “If we waan good, we nose haffi run”!

Hydrogen Economy for Jamaica and Beyond – Corruption in Bid Process

As long as it has LNG involved, then Vision 2030 aims are assured. Whether they use Reciprocating Engines or CCGT (Combined Cycle Gas Turbines) is a non –issue, as Gas Turbine Engines can eventually be retrofitted to use Hydrogen Gas in the Future as argued in my blog article entitled “Senator Phillip Paulwell chooses LNG over Coal - Power Engineers in Steven King's Graveyard Shift”.

On the non-engineering side, however, there’s the whole business of what appears to be political interference by Minister Phillip Paulwell, Minister of Science, Technology Energy and Mining in giving preference to Energy World International Limited, one of the bidders in the bidding process as alleged by the OCG (Office of the Contractor General) Dirk Harrison as stated in the article “OCG Flays Paulwell Over Hong Kong Energy Project Bidder”, published Tuesday September 17, 2013 7:07 by Jerome Reynolds, Staff Reporter, The Jamaica Gleaner.

Apparently Energy World International Limited has submitted their bid too late and because of that, they’d been excluded from the bidding process. Apparently, the accusation is that Minister Phillip Paulwell has influenced the OUR to include Energy World International Limited despite breaking with protocol that forbids a Minister of Government to interfere with the internal working of a Public Sector Body. They work with the Ministry of Science, Technology Energy and Mining not for Minister Phillip Paulwell!

Still I hope all this doesn’t mean the GOJ has lost focus on its other Energy projects, as Minister Paulwell being relieved of his duties as Minister would jeopardize the following projects:

1.      Hydrogen to replace LPG Cooking Gas Cylinder importation as argued in my blog article entitled “UTECH partners with GOJ and UWI to develope Hydrogen Cooking Gas Cylinders - EU Funded 3 Year Project is Chasing Mavericks to push Jamaica into the Hydrogen-Electron Economy”

2.      Manufacture of Solar Panels in Jamaica in collaboration with the Cuban Government as stated in my blog article entitled “Jamaica and Cuba collaborate on Solar Panels Production in Jamaica to connect the last 3% - Jamaica's rebranding of the REP to the JESL started the Alternative Energy Hunger Games Catching Fire”

3.      Replacing the ageing fleet of Street lights in Jamaica with Energy efficient ones that ONLY turn on in the night-time as reported in my blog article entitled “Green Energy RG installing 5000 Solar Powered LED Streetlights in Jamaica - Local Government's the Gangster Squad West of Memphis towards a more Energy Efficient GOJ”

4.      Expansion of the WWFL (Wigton Wind Farm Limited) to encompass all of Jamaica in a bid to reduce our Oil importation bid as stated in my Geezam blog article entitled “Wigton Wind Farm: Origins and Future Development of Wind Energy in Jamaica

The procurement process had been mired in controversy, having take n a lot longer than before and thus resulting in Minister Phillip Paulwell having to intervene, which shouldn’t be so as the OUR is the GOJ Public Sector Entity responsible for Regulating Electricity, Sewage, Water and Telecoms.

Hopefully this business with the OUR will be sorted out soon but if Minister Paulwell has truly intervene in the Bidding Process by the OUR as claimed by the OCG, he needs to do the honourable thing and resign as Minister of Technology.

In the midst of all this controversy though, congratulations to Azurest Cambridge Power! I’m hoping to see the LNG Barges and Regasification Barge anchored off the Coast somewhere in Jamaica in five (5) years time!