|Wikileaks:||View 02TEGUCIGALPA3273 at Wikileaks.org|
|Classification:||UNCLASSIFIED//FOR OFFICIAL USE ONLY|
|Tags:||ENRG BEXP EINV ECON EAID PREL KJUS HO|
|Redacted:||This cable was not redacted by Wikileaks.|
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS TEGUCIGALPA 003273 SIPDIS SENSITIVE STATE FOR WHA, WHA/CEN, AND EB/CBA GUATEMALA FOR COMATT: DTHOMPSON E.O. 12958: N/A TAGS: ENRG, BEXP, EINV, ECON, EAID, PREL, KJUS, HO SUBJECT: AES WILL CHALLENGE HONDURAN ELECTRICITY BID RESULTS REF: a) 01 TEGUCIGALPA 2872, b) TEGUCIGALPA 02207, c) TEGUCIGALPA 02857 d) TEGUCIGALPA 03184 THIS CABLE REPLACES TEGUCIGALPA 03263 1. (SBU) Summary. AES and two other companies presented challenges to the State-owned electricity enterprise ENEE's decision to award Lufussa the contract for the 210MW bid. AES challenged ENEE's failure to disqualify Lufussa for the lack of inclusion of sufficient transmission facilities in its original bid, charging that Honduran law clearly did not permit the omission. AES has also charged that other companies should have been disqualified for not explicitly including their proposed type of fuel in the bid. AES also found mathematical errors in the calculations used to determine the evaluated price that change the competitive order of company prices. ENEE officials initially threatened to sue companies that used the legal appeals process, but GOH officials have discounted those threats. The prosecutor for anti-corruption and the Honduran Inspector General's office have both also announced they will investigate ENEE's conduct of the tender. End Summary. 2. (U) On November 26th, AES, Comercial Laeisz and the National Engineers' group all challenged the results of the 210MW bid, arguing that Lufussa should have been disqualified as they did not include a required transmission line. The challenges by the three companies also prompted investigations by the prosecutor for anti-corruption and the Honduran Inspector General's office who both announced November 27 that they too would be investigating the tender process. The ENEE board of directors, by law, should decide on the three companies' appeals within five business days, although most expect it will take longer. 3. (SBU) AES' challenge is based on the fact that Lufussa was allowed to modify its bid to include transmission lines which it omitted from the original bid packet; Lufussa added the transmission lines and substations after the July 26 bid opening when the company was able to review its competitors' bids. AES believes this allowed Lufussa to design transmission capacity that ensured it the lowest transmission losses and therefore lowered its overall evaluated price per kilowatt hour (transmission losses play an important part in the calculation of evaluated price). In addition, neither Lufussa nor Comercial Laeisz included the type of fuel to be used, an automatic disqualification. AES believes it has a very strong legal case and at this point is willing to challenge the bid decision through the Supreme Court level if necessary. 4. (SBU) With the help of considerable Embassy advocacy, AES finally received (on the day before the deadline to challenge the tender award) the data on assumptions and calculations that ENEE used to arrive at the evaluated price. AES ran the numbers through the model and believe they found mathematical errors that would change the results, with Comercial Laeisz falling to third place and AES moving into a close second behind Lufussa. The ENEE data also demonstrated that Lufussa did, in fact, have the lowest transmission losses. AES strongly believes this was only possible due to Lufussa's ability to delay providing details on transmission until after seeing its competitors' bids. 5. (SBU) ENEE and Honduran officials tried desperately to discourage these bid challenges. Members of the "notables" committee charged with overseeing the process repeatedly stated no company should challenge the decision as it was unanimous, fair and transparent. ENEE General Manager, Angelo Botazzi, told reporters the ENEE would counter-sue any company presenting a challenge to the bid (implicitly aiming this threat at AES). Now that Honduran companies Comercial Laeisz and the National Engineers group have also challenged the result, there has been less talk of a counter suit. GOH officials (ENEE board members, some Ministers and various Congressmen) have also tried to condition public opinion by claiming that the challenges will result in future blackouts and a potential energy crisis (since the appeals process could bog down in court cases). AES's public comments have emphasized that it has only asked, at this time, for an administrative review by the ENEE board of directors, which shouldn't take more than 5-15 days. PIERCE
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