Government pays US$4.8 million to Cogentrix in exchange for nothing
SD. The Dominican government is in the process of analyzing if they should continue paying US$4.8 million a month to the Cogentrix power plant although it has been shut down for eight years, or whether it accepts the conversion of the generator, which works on fuel oil, to natural gas, in order to be able to start it without its price being too expensive for the people.
“Those US$4.8 million were a minimum commitment for the investors to come in here and even not using it, you have to pay anyway,” he noted.
But the problem of this conversion for the state is that Cogentrix, in order to switch to natural gas is demanding a 20 year contract with the government, which could the eight years to go on the present contract or a guarantee for the natural gas supplier of US$4.0 billion.
This information was confirmed by the executive vice-president of the Dominican Corporation of State-owned Electricity Enterprises (CDEEE), Ruben Jimenez Bichara, who held a meeting with the editors of media outlets in order to deal with this issue. He said that the institution was putting on a show and will hold one or two meeting with gas suppliers in order to certify that there really should be a contract for the purchase of natural gas for that period in order to guarantee the supply.
He explained that the state prefers that Cogentrix be turned off, because when it enters into service, it is at a very high price, and all the other plants acquire the same price and it becomes costly for the state to have it working.
With respect to the US$150 million that the state should have available for the coal-fired plants that are being built in Punta Catalina, Bani, Jimenez Bichara said that the government had ordered those resources in last year’s budget and that in the current budget they also set aside US$100 million for the start of the project, which means that the country goes less into debt for this project.
Jimenez Bichara recalled that some months ago they made up a commission that held 23 meetings with the different sectors in order to compile a list of the expectations of each one with respect to the electricity pact.
“Every one of those that have a role in the electricity issue came here to this room and the commission talked to each one individually in order to take notes and receive suggestions,” said the official.
Construction company looks for a loan
The executive vice-president of the CDEEE, Ruben Jimenez Bichara, said that the tender makes the winner responsible for getting financing and that at the present time there is a team from the winning company in Rome making the moves. Nevertheless, the construction contracts for the coal-fired plants that were sent to the Congress, indicate that the state, via the Ministry of Hacienda, will obtain the financing necessary to cover up to 80% of the price of the contract.
Category: DR News |