By Moneth G. Deposa
& Gemma Q. Casas
Variety News Staff

REPRESENTATIVE Stanley Torres Jr. yesterday questioned the fees being charged by the Commonwealth Utilities Corp. for the processing of proposals to privatize power operations.
In a letter to CUC Executive Director Anthony C. Guerrero yesterday, Torres said the general concept of soliciting requests for proposals, or RFPs, is to encourage broad participation from a variety of service providers.
He said he is “more than a little puzzled that this common sense approach” is not being followed in the multi-million-dollar effort to privatize CUC’s power operations.
“While I understand the need to have an application fee that is sufficient to discourage nuisance proposals, a $76,000 fee is a bit beyond that, and in turn becomes a nuisance itself,” said Torres, Ind.-Saipan.
He said a firm is expected to pay an initial $1,000 fee as a prerequisite for the submission of a pre-qualification proposal and subsequently pay an additional $25,000 as a pre-qualification fee as a condition of “CUC acceptance.” None is refundable.
“Moreover, if a firm is selected to be considered in the final round, it is then expected to ante up an additional $50,000 to submit its final proposal. What are the true purposes of these grossly exorbitant fees and who established them?” the lawmaker asked Guerrero.
Torres said bid documents should be written well enough to “describe exactly what the qualifications and performance and price criteria are, but also stringent enough to keep out the riff-raff.”
“So what are the extra monetary hurdles for?” he asked. “Is this another example of plain greed, which has damaged our islands in the past and kept legitimate business enterprises from doing business with another bloated government agency?”
Torres said for more than 20 years, “the people have been aware of the weaknesses in the government’s management of power operations and now need to ensure that future economic growth, which is heavily dependent on the power supply, will be better guaranteed by having the best proposals possible for privatizing power generation.”
He added, “Charging high application fees is not the way to maximize interest in this important endeavor.”
Torres said that there is still time to extend the deadline for prequalification proposals and reduce the fees in order to encourage greater participation in the privatization process.
He raised the same concerns to Public Auditor Mike Sablan and asked for “immediate action.”
“There is enough time to reduce the required fees, extend the deadline for submission, and foster a true spirit of all working together in the public interest,” Torres said. “Not to do so is to invite the same stench that hung over the previous effort to privatize CUC power operations… One extension has already been issued, and another will not hurt, especially since the overriding interest is to get the best proposals for the privatization of power in the CNMI.”
CUC spokeswoman Pamela Mathis, in an interview yesterday, said this is not the first time that the agency has imposed fees for prequalification bids.
She admitted, however, that this is the first time that such a high fee has been imposed.
The deadline for the prequalification proposals was originally set for March 12 but CUC delayed it until April 2.
A dozen firms have already submitted proposals.
In a phone interview, Mathis said the prequalification invitation is just the first phase of the privatization project.
She said the fees will cover expenses for “technicalities,” among other things.
She added that CUC also wants an assurance that the prequalified firms are technically and financially capable of running CNMI power plants.