St. Croix community activist Gail Watson Chiang and her attorney, Lee Rohn, have put the Turnbull administration on notice that if it continues to negotiate with Southern Energy Inc. on the proposed sale of the V.I. Water and Power Authority, they will take legal action to stop it.
Rohn, on behalf of Chiang, wrote to the Turnbull-James administration on Jan. 5 warning that its negotiations with Southern Energy violate local competitive bidding laws. Rohn said that V.I. Code mandates that before a sale of a public asset or a government contract is let, the commissioner of Property and Procurement must secure competitive bids. An ensuing sale should then be made to the highest bidder, she said.
"The governor’s attempt to sign an exclusivity agreement with Southern Energy is outside his authority," wrote Rohn. "As such, an agreement could only be entered into by the Virgin Islands Water and Power Authority board.
"Further," Rohn said, "if the Virgin Islands Water and Power Authority board had entered into such an exclusivity agreement, it would be illegal and in violation of the statutes that require that all such contracts must be competitively bid."
Government House spokesperson Rina McBrowne said Thursday she was unaware of Rohn's letter and therefore couldn't comment. She said she would look into the matter.
Chiang said the administration hadn't yet contacted her or Rohn.
While details of the Southern Energy deal have not been released, there are reports that the company would purchase 80 percent of the utility for between $80 million and more than $100 million.
In a copy of Government House’s draft legislation authorizing the Senate to sell WAPA, the new utility would be called Virgin Islands Power LLC. The draft bill indicates that at the closing of the deal, the governor would assign Southern Energy an 80 percent ownership interest in Virgin Islands Power. A total purchase price, however, wasn’t yet a part of the draft.
In the draft bill, the government would own the utility’s electrical system transmission and distribution equipment. The new company would own the electricity plants, water purification plants and water distribution system. Electricity would be provided through the government-owned distribution system, according to a lease agreement.
Chiang said that while she personally is against the idea of selling WAPA, if it going to be done, it should be done according to the laws of the Virgin Islands.
"When there is something put for sale, you get the best price," Chiang said. "One of the ways is saying what’s available and then open the floor to bid. It’s a vital part of the V.I. Code."
Chiang said she agrees with Lt. Gov. Gerard Luz James II who has stated publicly that the sale question should be decided by the voters in a referendum. Because of the size of the territory, a referendum would be quick and affordable.
"I agree with (James). We’re small enough to lose no time or money," she said. "It would cost less than the millennium (celebration) fiasco."
Both Chiang and Rohn said the competitive bidding process in the territory has been handled loosely over the years. In the past, however, Chiang said that was related to hurricane recovery and the guise of public exigency.
"For too long the law as to competitive bidding and getting the best price for the people of the Virgin Islands has been ignored in favor of backroom deals and favoritism," Rohn said. "It must stop."
Chiang, meanwhile, said that no matter what an individual’s stance on selling WAPA, the sale should be done according to the law.
"For those who feel WAPA should be sold and those who feel it shouldn’t, let's do it right," she said.
