THE Government, after more than 10 years trying to divest the Petroleum Company of Jamaica Limited (Petcom), has set up an enterprise team for the privatisation of the entity.
“Mr Erwin Jones, chairman of Petrojam, will lead this team. We are currently having a valuation of the company’s assets done and we will announce more as information becomes available,” Energy Minister Phillip Paulwell told Parliament yesterday during his contribution to the 2013/14 Budget Debate at Gordon House in Kingston.
Petcom has a service station network of some 28 stations in Jamaica
Paulwell, arguing that Petcom has been a strategic asset in the petroleum marketing sector, said he hoped that the entity would remain a strong player in the market. “Again, I encourage local investors to participate in the ownership of this important Jamaican asset,” the minister told the House.
THE EDITOR, Sir:
Twin armoured cables are made up of a minimum of five layers of insulation, the individual insulation of the two conductors, an overall insulation of these two, then comes the armour rap which in the low cost cables is normally made from aluminium and finally the outer insulation.
Steel armoured cables are considered the best. The 16mm steel armoured cables come in at about US$600 per 100 metres.
I know that there are many Jamaicans who are very ingenious at theft – and not much else – but unless one calls the Grim Reaper and asks him to stay away, it would be a very brave person, or possibly a fool, who tries to make a connection to an armoured cable without first switching the power off and using the correct tools.
You can’t connect to an armoured cable by throwing up a hook! Yes, I know that future legal connections to such a line will take longer and cost more, but it is a one-off payment. This will, in the end, cost less than going to and fro to remove illegal connections or throwing up hands and saying, “We don’t know what else to do.” We can’t go on like this!
JPS does not (I stand corrected) have any means of determining the difference between line loss which varies and theft, but as it is allowed to charge you and me for that which is guessed theft, why bother to go to the expense of putting up armoured cables in predominantly theft areas.
The local oil refinery Petrojam, which has served Jamaica for a generation, should be shut down unless negotiations with the new Venezuelan government result in expansion plans, according to Energy Minister Phillip Paulwell.
The plant expansion has been delayed for eight years.
“In relation to Petrojam, this is a project that is well delayed. If Petrojam is not upgraded and expanded, we will have to shut it down. It is as simple as that,” Paulwell said at a press briefing at the Office of the Prime Minister on Thursday in Kingston.
“So we are awaiting the settling in of the new government and we were promised that as soon as that occurs, there will be a very important meeting with the players.”
Petrojam, the company, was incorporated 31 years ago. Government owns 51 per cent of the plant and Venezuela has the remaining 49 per cent since 2006.
Petrojam is projected to earn US$21.2 million net profit for this fiscal year ending April 2014 on US$1.9 billion of revenues. The capital expenditure for the year is projected at US$26.9 million.
Jamalco Refinery, the alumina joint venture between the Jamaican Government and Alcoa, aims to build the island’s first major coal plant in order to lower the cost of alumina production, Mining Minister Phillip Paulwell indicated on Thursday.
The plant will lower the high cost of energy that currently threatens the viability of the bauxite/alumina sector, which earns the third-highest levels of foreign exchange for Jamaica.
Majority owner and managing partner Alcoa has signed a memorandum of understanding (MOU) on the matter with the Government, said Paulwell at his post-Budget presentation press conference.
Paulwell laid out his ministry’s plans to lawmakers on Wednesday.
“For Jamalco, we are going to have an energy solution that is different from what we have now. The Cabinet has signed off and I have signed an MOU with Alcoa for them to pursue a coal option, and they are pursuing a bidding arrangement where they are seeking investors who will establish the plant and will do a take-or-pay contract with them,” he told journalists at the Office of Prime Minister in Kingston on Thursday. “So that is a part of the mix and it is a requirement going forward,” he said.
Tackle high costs
THE Office of Utilities Regulations (OUR) is to partner with the National Contracts Commission to negotiate actively with four interested bidders for the building of a new power plant and present a recommendation to the Government in 30 days.
Minister of Science, Technology, Energy and Mining Phillip Paulwell, who made the announcement during his contribution to the 2013/14 Budget Debate at Gordon House in Kingston yesterday, said the OUR is to get additional powers of monitoring, evaluation and enforcement, similar to those it has over the telecommunications sector. “Legislation will be brought to Parliament during this year to amend the current Act,” he said.
Minister of Science, Technology, Energy, and Mining Phillip Paulwell makes his contribution to the 2013/14 Budget Debate at Gordon House in Kingston, Turn to POWER on Page 4 yesterday. (PHOTO: LIONEL ROOKWOOD)
In 2010, the OUR went to tender for 480 megawatts (MW) of generating capacity, and the Jamaica Public Service (JPS) was the sole bidder at the time and was awarded the right to construct a 360 MW combined cycle plant. It was contemplated that the Government
would be responsible for securing the supply LNG of fuel for the new plant, through the Liquefied Natural Gas project.
However, the OUR, on February 1 this year, informed the JPS and its shareholders that it had terminated the request for proposal (RFP) process in relation to the 360-MW project. The OUR said it ended the process after JPS missed a third deadline on January 30 to complete the requirements under the RFP for the 360-MW project and had requested a 30-day extension.
The JPS said the project scope changed significantly since 2011, when it was granted approval to proceed with construction of the plant saying its role initially was simply to construct the plant, but late last year the company was asked to take on the additional responsibility of identifying a supplier and managing the process of procuring the LNG.
A subsequent decision by the OUR to accept unsolicited proposals from the JPS and other companies, this year,
saw five entities presenting unsolicited proposals for 14 discrete projects.
Yesterday, Paulwell said this development was “a big turnaround from 2010, when there was a sole bidder, signifying confidence in this administration, its policies and regulatory framework”.
He said that following evaluations by international consultants Mott McDonald, which contemplated among other factors the firmness of the proposal, the overall price and expected impact on retail electricity rates of the 14 projects submitted, four were rejected because the information was incomplete.
The energy minister said, although 10 were screened for detailed technical and comparative economic analysis, of the 10, the OUR determined that three entities made the pitch. Those include Amorview/Tankweld, which presented a
232-MW project proposed for Old Harbour and a 122.4-MW project proposed for Caymanas; JPS, which presented proposals for a 323-MW and a 350-MW combined cycle plant, both proposed for Old Harbour; and Azurest/ Cambridge, which presented a proposal for a 388-MW plant mounted on a barge.
Paulwell said all three proposed the use of natural gas.
In the meantime, he said subsequent to the OUR receiving and assessing those proposals, the Government has since received another unsolicited proposal from a Hong Kong company, proposing to build an LNG receiving terminal and power plant and to supply LNG from its own gas fields. That company has proposed a combined cycle gas-fired 360-MW power plant adjacent to the LNG hub terminal.
“After several stops and starts, today I can speak with certainty that a positive change is about to come to the supply of electricity in Jamaica. It is essential that we begin construction of new generating capacity this year; there have been too many delays, and we can no longer live with these high electricity prices,” Paulwell told the House.