The commission named by the Presidency to report on the 600-megawatt Punta Catalina power central, under construction by a consortium led by Odebrecht, recommends the completion of the Punta Catalina coal-fired thermo-electric under construction in Peravia province. After a six-month investigation, the members of the commission concluded that “for the most part”, the project has complied with Dominican law.
The power plant is the largest contract awarded by the Medina administration to Odebrecht, the Brazilian company whose representatives admitted in a New York Court of having paid US$92 million in bribes to Dominican officials. News reports have pointed to irregularities from the tender to overpricing in the construction of the Punta Catalina power plant.
The investigative commission convened by the President determined:
Regarding overpricing of the public work, the presidential commission concluded that the US$1,945 million price tag, is within a “reasonable range” and is 6% less than similar plants in Latin America, according to FTI Consulting that provided the technical expertise to the commission.
Regarding the tender, the commission reported that there should have been better controls of the process, and that the participation of Stanley Consultants was dominant. The commission recommended that the situation of a majority of the bidding firm members being part of the tender committee, as was the case of the Punta Catalina plant, not be repeated in order to ensure better supervisory capacity of the actions of the tender committee.
According to the commission, the technical advisory consultant, FTI, determined that although it was not a requirement, the tendering committee could have given other potential contractors the opportunity to submit their technical proposals to be evaluated so as not to end up with only one bidder to be considered for the financial offer evaluation, as was the case. The commission thus recommended amendments to the Procurement Law so that this cannot happen in the future. In the Punta Catalina power plant case, the consortium led by Odebrecht and also integrated by Ingeniería Estrella and Tecnimont ended up being the only one that obtained the score established in the technical requirements to continue with the next phase of the competition, the financial evaluation. The commission observed that the tender committee of Punta Catalina should have had greater control of the process, with a member of the Superintendency of Electricity and the National Energy Commission in addition to the representatives of Stanley Consultants that basically controlled the process.
Regarding the bids that were received by the tender participants, the commission said it was not able to open the credentials submitted by the companies that participating in the tender, and thus said it is not competent to determine if there were illegal payments made to secure contracts. The commission suggested the Attorney General carry out an investigation concerning accusations of bribes.
The commission reported that the tender did not include a representative of the Office of Free Access to Information as required by law. Furthermore, the commission revealed that engineer Ramón Flores and economist Isidoro Santana (later appointed Minister of Economy and Planning) resigned from the tender committee after not receiving sufficient technical details of the project.
The commission also reported that the government has paid in advance 13.69% of the contracted work.
The commission recommended that the government purchase and not lease the land from Compañía Anónima de Explotaciones Industriales, S.A of the Vicini family group.
The commission also recommended the government carry out efforts to be reimbursed for US$6.5 million paid to the Brazilian export promotion band, BNDES as commission for the approval of the financing of the power plant. Given the corruption scandal in Brazil, BNDES was not able to come forth with the US$600 million in financing.
The executive vice president of the Public Electricity Corporation (CDEEE) Ruben Jimenez Bichara expressed his satisfaction for the conclusions by the commission, as reported on the Presidency website. The Presidency note indicates that the power plant is 78% completed. Engineering works are 96% completed and 98% of principal equipment purchases have been made. The Presidency argues that the power plant will make it possible for the national grid to supply power at sustainable prices 24/7. The first unit of the power plant should be in operation in July 2018, with the second unit by December 2018.
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3 July 2017
