St. Croix community activist Gail Watson Chiang and her attorney, Lee Rohn, have put the Turnbull-James administration on notice that if it continues to negotiate with Southern Energy Inc. on the sale of the V.I. Water and Power Authority they will take legal action.
Rohn, on behalf of Chiang, wrote to the administration on Jan. 5 charging that the negotiations violate local competitive bidding laws. Rohn said V.I. Code mandates that before a public asset is sold or a government contract signed, the commissioner of Property and Procurement must secure competitive bids. The sale should 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."
A Government House spokeswoman, 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 responded to her letter.
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 Government House’s draft legislation authorizing the Senate to sell WAPA, the new utility is 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. The exact purchase price is not mentioned in the draft.
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 must 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," she said. "One of the ways is saying what’s available and then opening the floor to bid. It’s a vital part of the V.I. Code."
Lt. Gov. Gerard Luz James II has stated that the sale question should be decided by the voters in a referendum, and Chiang said she agreed. Because of the relatively small size of the territory, a referendum would be quick and affordable.
"We’re small enough to lose no time or money," Chiang said. "It would cost less than the millennium [celebration] fiasco."
Both Chiang and Rohn said competitive bidding has been handled loosely here over the years, often in the face of hurricane recovery and 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. It must stop," Rohn said.
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.
