Office of Utilities Regulation v Contractor General

JurisdictionJamaica
CourtSupreme Court
JudgeD. Fraser J
Judgment Date26 February 2016
Neutral Citation[2016] JMSC Civ 27
Docket NumberCLAIM NO. 2014HCV02915
Date26 February 2016

[2016] JMSC Civ 27

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

IN THE CIVIL DIVISION

CLAIM NO. 2014HCV02915

Between
Office of Utilities Regulation
Applicant
and
Contractor General
Respondent

Ransford Braham QC and Daniella Gentles-Silvera instructed by Livingston Alexander & Levy for the Applicant

Nicole Foster-Pusey QC Solicitor General and Carlene Larmond , Director of Litigation instructed by the Director of State Proceedings for the Minister of Science, Technology, Energy and Mining in support of the application

Tameka Jordan and Gillian Pottinger instructed by Firmlaw for the Contractor General

JUDICIAL REVIEW - Leave - Application for leave for judicial review - Amenability of Contractor General report to judicial review - Reputational damage

D. Fraser J
THE BACKGROUND TO THE APPLICATION
1

I will utilise the outline of the background in the written submissions of the applicant with necessary amendments.

2

The Office of Utilities Regulation (OUR) is a body corporate established under the Office of Utilities Regulation Act (hereinafter referred to as “the OUR Act”) which functions as regulator of utility services which includes the generation, transmission, distribution and supply of electricity.

3

The OUR also receives and processes applications for licences to provide such services and makes recommendations to the appropriate Minister in relation to applications for licences as the OUR considers necessary according to the OUR Act or other relevant legislation. In relation to the generation, transmission, distribution and supply of electricity, the responsible Minister is the Minister of Science, Technology, Energy and Mining, the Honourable Phillip Paulwell.

4

The respondent, the Contractor-General (CG), is a Commission of Parliament appointed by the Governor General and whose functions are defined by the Contractor-General Act. The CG heads the Office of the Contractor-General (OCG).

5

The National Contracts Commission (NCC) is a body corporate established pursuant to the Contractor-General Act.

6

In or about December 2010 the OUR issued a Request for Proposal inviting applications to submit proposals to provide new generation capacity amounting to 480 megawatts net to the National Grid of Jamaica on a build, own and operate basis to replace approximately 292 megawatts of inefficient aged plants with the remainder to provide for load growth.

7

The Jamaica Public Service Company Limited (hereinafter referred to as “JPS”), the sole bidder, submitted four (4) bids. The OUR formed the view on its initial evaluation that the bids submitted were below the par standard specified in the evaluation criteria.

8

Nevertheless, the OUR negotiated with the JPS to arrive at an acceptable bid for 360 megawatt of generation capacity.

9

The plan proposed by JPS was to use natural gas that should have been provided or procured by the Government of Jamaica. In effect the implementation of the 360 megawatt project was dependent on the finalization of the gas supply and infrastructure arrangements. The provision of the gas supply was a separate project being undertaken by the Government of Jamaica. Indeed between 2010–2011 the Government of Jamaica conducted procurement processes for natural gas supply and construction of the infrastructure.

10

The Government of Jamaica sometime in September 2013 abandoned the procurement of natural gas and indicated to JPS that JPS should secure their own fuel supply.

11

From December 2011 to January 2013 the OUR sought to have the JPS finalize the project agreement for the implementation of the 360 megawatt project but was unsuccessful in doing so.

12

On January 30, 2013, the last day of what was the third extension to the bid validity period, JPS requested a further thirty-day extension from the OUR purportedly to clarify “fuel source and supply and validity of current plant configuration if that fuels source is not forthcoming”.

13

Notwithstanding the fact that JPS had applied for extension of time, JPS had failed to supply any details that would allow the OUR to assess its application, particularly whether an extension of time would provide any certainty as to the future of the project and JPS had indicated that it was either unable or unwilling to fulfill the requirement of providing a current bid security.

14

In light of JPS's position and conduct, the OUR concluded that the project for the procurement of the 360 megawatt generation capacity was terminated by reason of effluxion of time which was confirmed to JPS by the OUR by letter dated 1 February 2013.

15

On 31 January 2013 JPS provided to the OUR a summary of an alternative or further proposal for the provision of electricity generating capacity. This proposal was not considered by the OUR as a part of the project for the provision of the 360 megawatt generation capacity; that process having been terminated by effluxion of time. Whether or not the JPS proposal of 31 January 2013 was a part of or a continuation in some way of the project for the provision of the 360 megawatt generation capacity is one of the disagreements between the OUR and the OCG.

16

The OUR responded to JPS and indicated that it, the OUR, would seek government clarification or policy decision in relation to the securing of additional generation capacity.

17

Following the termination of the 360 megawatt project other entities contacted the OUR expressing a desire to provide a solution for Jamaica's electricity needs. These entities, apart from JPS were Armourview Holdings Limited and Complant- Engineering, Jamaica.

18

The OUR advised JPS and the other entities that expressed a desire to provide a solution to Jamaica's energy needs that they would be given an opportunity to clarify and submit details of their proposal and indicated to them that such clarification should be provided by 15 March 2013.

19

The OUR on 18 th February 2013 issued a media release whereby it informed the nation inter alia that:

  • (1) It had received what it termed unsolicited proposals from entities including JPS;

  • (2) It intended to complete a review of those proposals by end of March 2013;

  • (3) After the completion of the review by the OUR, it would determine the feasibility of the proposals and advise the Government as to whether it was worthwhile to proceed to enter into negotiations with any of the entities;

  • (4) All proposals/submissions would be treated as unsolicited bids.

20

Central to the dispute in this matter is the true nature and effect of the media release of February 18, 2013 and whether or not the proposals were unsolicited as contended by the OUR.

21

The OUR maintains it did not invite any tenders or provide any technical data or instructions typical of a bidding process in the media release.

22

At the close of business on 15 th March 2013 the OUR had received five (5) proposals which they considered unsolicited. Two (2) were from entities that had sent in proposals before the media release of 18 th February 2013 being JPS and Armourview Holdings Limited. The other three (3) unsolicited proposals were from Azurest-Cambridge, JAMALCO and Optimal Energy. Complant-Engineering who had previously sent in a proposal did not send any further information.

23

The OUR sent these proposals to the consultant engineers, Mott MacDonald, for evaluation. Mott MacDonald submitted a preliminary report dated 13 th April 2013, a draft final report dated 21 st April 2013 and a final report on 13 th May 2013. In these reports Mott MacDonald conclude inter alia that:

“None of the bidders have provided firm commitments to OUR for the financing structure, confirmed pricing and commitments for capital and operating cost or a significant acceptance of risk of these items from the OUR. There are differences in the maturity and therefore overall feasibility of the projects as presented and we would provide an indicative ranking purely on the information provided from a financial stand point.”

24

Further, Mott MacDonald indicated that the proposal from Jamalco could not be evaluated based on the lack of critical information on the project. It also indicated that the proposal from Optimal did not merit further consideration given that the solution offered was primarily based on heavy fuel oil and the indicative price of natural gas provided was not supported by any indication as to probability, availability and timing.

25

The OUR, based on the findings of Mott MacDonald, was of the view that none of the unsolicited proposals were complete and ready for implementation and that if the Government of Jamaica was to proceed, significant negotiations to arrive at an acceptable proposal would be required.

26

The OUR having received the draft final report on 21 st April 2013 advised the Cabinet of Mott MacDonald's initial analysis and of the OUR's recommendation to engage the three short listed entities (Armourview, Azurest and JPS) in further discussions. This recommendation was endorsed by Cabinet, however, the OUR was advised on or about 21 st April 2013 by the Cabinet Secretary that the Government of Jamaica through the Minister of Science, Technology, Energy and Mining, had received a proposal from Energy World International (hereinafter referred to as “EWI”) and that the Cabinet wished the OUR to consider this proposal.

27

The OUR by letter dated 23 rd April 2013 advised the NCC that it had received unsolicited proposals, the outcome of the preliminary review of these proposals and that three proposals were being selected for further consideration. The OUR further indicated to the NCC that the OUR proposed to engage in simultaneous negotiations with the three entities to ascertain which best served the needs of the country. The OUR sought the NCC's permission and/or guidance to proceed along the lines it had proposed and...

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6 cases
  • Everton Tabannah v Worrell Latchman
    • Jamaica
    • Supreme Court
    • 20 June 2016
    ...by the Commission regardless of whether they lead to criminal charges are susceptible to judicial review. In OUR v Contractor General [2016] JMSC Civ 27, Fraser J reviewed cases from England and Wales and demonstrated that recommendations, in certain circumstances, can properly the subject ......
  • Everton Tabannah v Worrell Latchman and Another
    • Jamaica
    • Supreme Court
    • 23 June 2016
    ...may still not be enough. 53 It may be said that the Commission has made recommendations and not decisions. In OUR v Contractor General [2016] JMSC Civ 27, David Fraser J reviewed cases from England and Wales and demonstrated that recommendations, in certain circumstances, can properly be th......
  • Tanisha Perry v The Commissioner of Police and The Attorney General
    • Jamaica
    • Supreme Court
    • 31 July 2018
    ...framework Counsel found support for his point in the Judgment of Fraser J, in Office of Utilities Regulations v. Contractor General [2016] JMSC Civ 27. It was indicated that Fraser J opined that a public law declaration is a separate administrative order and that nowhere in the Jamaican rul......
  • Deborah Patrick-Gardner v Jacqueline Mendez and Another
    • Jamaica
    • Supreme Court
    • 8 July 2016
    ...quite see the matter in that way. It is well established that recommendations are capable of being reviewed ( OUR v Contractor General [2016] JMSC Civ 27 para 57–63 (David Fraser J). Mrs Mendez was quite likely an active participant in that process of recommending the retirement of Mrs Patr......
  • Request a trial to view additional results

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