Saturday, August 2, 2008

Privatization dancing

Most people favor privatizing the Commonwealth Utilities Corporation, from what I hear 'on the street' and see in online polls like the one on Rep. Joseph Camacho's website. But proverbally, the devil is in the details.

The Senate has sent the House Bill calling for privatizing CUC within 45 days back with "minor amendments", according to the Saipan Tribune. Well, that's helpful, but about what you'd expect when the story doesn't even mention the bill's number.

How many companies are going to sort through the engine pieces on the power plant floors, take stock of substations, lines and transformers and come back with a bid?

Somebody, preferably from outside the Commonwealth, needs to independently take a 'snapshot' of CUC before there is any request for bids. The Legislature was just guessing when it set the value at $500 million and now $250 million. The winning bidder will also face huge costs for needed spare parts and maintenance that has been deferred for years.

I'm groping in the dark here (Last night too, but that's a different story), but I've heard the company will also have to "protect" current employees. That's hanging an albatross around a pig's neck when hiring practices have helped bring CUC to its current state. The pool of qualified CNMI residents isn't huge. It would be suicidal to fire valuable employees, particularly with the tightening labor market due to impending federalization. Do you really want to pay for the others with higher power bills?

Like any new board members, the Public Utilities Commission had to rack up some frequent flyer miles before digging into business. That's done, but I doubt if they'll be ready to go in 45 days.

Privatization was a great idea 20 years ago. It's a better idea now, but not if it's another one of those rush jobs that has to be done again and again.

Oh, one other thing, a proposed amendment: "Proceeds from this sale may be used for operations only after retiring all government debt and unfunded obligations."

Speaking of rush jobs, The Marianas Public Land Trust will be meeting in the Morgen Building at 9:00 am Monday to discuss Resolution 08-03. You know, Aggreko money.

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