US embassy cable - 02TEGUCIGALPA2897

UNCLAS TEGUCIGALPA 002897 
 
SIPDIS 
 
SENSITIVE 
 
GUATEMALA FOR COMATT: DTHOMPSON 
STATE FOR WHA/CEN 
 
E.O. 12958: N/A 
TAGS: ENRG, EPET, EINV, ECON, HO 
SUBJECT: AES PROJECT: ANNOUNCEMENT OF 210MW BID WINNER 
DELAYED AGAIN 
 
REF:  a) 01 TEGUCIGALPA 2872, b) TEGUCIGALPA 02207, C) 
 
TEGUCIGALPA 02857 
 
1. (SBU) Once again, the announcement of the winning bid in 
the 210MW energy contract has been delayed (bids were 
presented on July 26).  Angelo Botazzi, the general manager 
of the state-owned electricity company ENEE, now says the 
decision will be announced sometime before October 23rd.  As 
the decision draws near, is postponed and draws near again, 
the American bidder, AES, continues to request USG advocacy. 
As noted in ref a, Embassy has advocated for this project, 
consistently, at the highest levels of government. 
Ambassador and DCM have discussed the tender personally with 
President Maduro and Minister of the Presidency, Luis 
Cosenza on several occasions.  Econoffs continue to show 
Embassy support for a fair process at all opportunities. 
 
2. (SBU) On October 16th, Emboffs met with ENEE general 
manager, Botazzi and passed on concerns expressed by the 
U.S. company, AES, about possible irregularities in the 
evaluation process, including the fact that some 
confidential documents from the evaluation committee have 
 
SIPDIS 
been circulated publicly. 
 
3. (SBU) Botazzi replied that while it is possible an 
individual on the evaluation committee has acted 
irresponsibly, he has complete confidence that the 
committee's decision will result in a fair and transparent 
outcome. He added that the decision of the evaluation 
committee will be unanimous, limiting the ability of any one 
individual to unduly influence the process.  The evaluation 
committee's recommendation will also need to have the stamp 
of approval from the separate transparency committee (which 
is serving as a watchdog) before it is submitted to the ENEE 
board.  Botazzi stated he is confident that the winner of 
the bid will be the project that meets all the requirements 
and has the lowest evaluated cost. 
 
4. (SBU) Despite the repeated delays in the announcement, 
Botazzi promised the decision would be announced within the 
week.  He professed not to be concerned about the time the 
decision has taken up to now, since the tender evaluation is 
very technical and complicated.  He noted that the committee 
is working hard to make sure the recommendation is so well 
documented that no party will be able to challenge the 
decision. 
 
5. (SBU) This position is consistent with a conversation 
Econcouns had with Presidential advisor, Ramon Medina Luna, 
on October 15th.  Medina Luna said that it was important for 
the Government to avoid any possible legal challenges that 
would delay the awarding of the contract.  Since the country 
desperately needs this energy by 2004, they do not feel they 
can afford the delays of a legal challenge.  Both Botazzi 
and Medina Luna indirectly acknowledged the importance of 
AES's El Faro project, but neither one gave any indication 
AES will definitely be the winner of this contract.  Note: 
AES's El Faro project is technically independent of the 
result of this bid.  However, all parties understand that 
under the current world energy market conditions obtaining 
this contract would probably be necessary for AES to get 
financing for El Faro.  End Note. 
 
6. (SBU) Comment: We believe the meetings with Botazzi and 
Medina were useful in communicating again USG interest in 
the fairness of the tender and the American company's 
concerns about possible irregularities.  Embassy will 
continue its advocacy on this case at all appropriate 
opportunities.  End Comment. 
PALMER