When did the irregularities in the Gatún Generating Plant project begin? This contract was awarded by the Panamanian government to NG Power in 2013, in a bidding process that was questioned by the entire electricity market. What controversies did you identify? They were very specific reasons.
We understand that the specifications were changed 24 hours before the submission of proposals to tailor a suit to NG Power.
That was the first act that was challenged through criminal proceedings. In addition, NG Power never complied with the requirements and demands stipulated in that contract.
Among other things, it never presented a financial closing.
Nobody knew which company or bank was going to finance this project.
A number of flexibilities were granted to allow compliance with these requirements, but they were never submitted. Third, this project, which I call a "phantom project"—because it should have been operational years ago, and what exists today is simply a vacant lot; there is no earthmoving or any structure erected—was approved with a Category 2 environmental impact study . What does this category imply? In Panama's environmental regulations, it means that its impact is minimal.
However, other adjacent natural gas-fired power generation projects require a Category 3 environmental impact assessment due to the risks associated with their location in the Atlantic entrance zone of the Panama Canal, with significant continuous traffic and the presence of surrounding communities. Unfortunately, we have also filed criminal charges against this project. Should the contract for this project be canceled? The final license granted to NG Power has expired.
Our legislation requires that in order to have a valid energy and power supply contract, a definitive license must be obtained.
On November 18, 2020, the Public Services Authority of the Republic of Panama certified to me that they had not extended the license. From that point on, I officially requested its cancellation.
But they didn't comment. How is it that this year there's already talk of three contracts for the supply of energy and power? That's absolutely illegal. That's why we've gone to the Third Administrative Litigation Chamber of the Supreme Court of the Republic to request its annulment. Could the State have recovered damages if the project hadn't been completed on time? I don't know the figures, but there's clearly a bond issued by an insurance company, and legally, the State, through the Public Services Authority, should collect the bond, demand compensation, and even call for a new bidding process. If the contract continues, wouldn't a price adjustment be necessary? That contract is extremely expensive, above those of all other players in the electricity market.
With an extension, the 20-year projection to 2043 means that the purchase cost for distributors will increase, and the electricity distribution company of the Republic of Panama itself has certified to me that this cost would be passed on to consumers. This means there will be a significant impact on the cost of electricity for citizens. I mentioned that, following due process, a new public tender should be called— Yes, if the market demands it.
This would allow prices to be adjusted to reflect reality, achieving fairness with other generators or even more competitive rates. So far, the 2013 tender, which was flawed from the start, has been maintained through procedures and arguments that range from irregular to illegal. Is this prioritizing a gas-fired project over potential renewable energy tenders? In today's world, sustainable energy is the best option for the environment.
Legally, the licenses must be cancelled, the extensions declared null and void, and a tender for renewable energy must be opened.
That's what the Republic of Panama should do. Do you think it's appropriate for Acodeco—the Consumer Protection and Competition Authority—to issue a statement on this matter? Many stakeholders have already called for a halt to the negotiations on these contracts.
And not only should Acodeco intervene, but also the Industrial Union, the Chamber of Commerce, and other power generator associations. https://www.energiaestrategica.com/hidroelectricas-piden-revocar-el-contrato-de-una-central-a-gas-de-550-mw-pendiente-en-panama/