The Senate is gearing up for a massive debate today as a request of US$30million sovereign guarantee with automatic renewal up to 27 times so the power company “Sichuan Machinery & Equipment” can obtain the financing required to build a coal fired 600 megawatt plant in the northwest town of Montecristi. 

Also biding at the same time however was the HN Energy firm who are opposed and have questioned this initiative, they have also threatened to sue the Dominican State if the States grants this guarantee amongst allegations that the provision was not in the original bidding terms of reference.

Legislators from the PRD Opposition Party have also said that they will not approve the sovereign guarantee and they feel that the contract would over commit the State and be more detrimental to the country than those conditions provided by the other energy firms of Cogentrix and Smith & Enron.

To give you a back ground on what has been happening with the bids for the coal fired plants, back in January of 2006 the Dominican State owned electrical group’s Bidding Committee (CDEEE)  received tenders to build 2 new coal fired plants, and at the time Sichuans bid was rejected for not adhering to the terms of reference in the outlining points of tender, Emirates Power won the bid and another rejection was given to HN Energy Company too. 

Then later on in February the Sichuan Company sent a letter to the Bidding Committee where it said they realized that they didn’t meet the terms of reference regarding the CDEEE’s purchase of up to 50% of the energy it produces. Even after receiving the letter from potential bidders Sichuan, the Bidding Committee carried on and awarded one of the 2 plants to the Emirates Power Company. 

HN Energy are outraged and in a letter to the Senate and Economic Cabinet Officials have said that “We make this call of alert to avert a new international legal crisis to the country within the electric sector, because without a doubt the companies that participated in the referred event will feel deceived with everything that has occurred”.