The National Institute of Electrification (Inde) has already begun the valuation of the assets that this institution could contribute to the co-participation project in the generation of 100 to 120 megawatts (MW), commented the president of the National Institute of Electrification (INDE), Melvin Quijivix, adding that this is an autonomous entity whose Organic Law allows it to rely on its regulations for purchases, contracts and disposals.
Said regulation was issued by the Board of Directors in accordance with the literal bye of article 16 of the Institute’s Organic Law, decree 64-94, and amended in March 2013. Specifically, the legal basis for this event is article 58 of the regulation, which allows you to co-participate with individuals or partners for the execution of projects by contributing assets.
Said article states that the entity may develop and/or extend jointly with individuals or partners the execution of projects of their interest, contributing plants or productive generation infrastructure that are operating or not in operation, transmission lines, studies or projects that are are in a stage of their development and/or finished.
And the company or interested person must provide all the funds that are necessary for the development, execution, complementation and start-up of the particular project, subject to the five bases described in the article.
If the project is located in the north of the country, INDE’s contribution would be a 230 kilovolt transmission line between Puerto Barrios and Morales (Izabal) which would have to be built. And if the project is located in the south, the assets that Inde would contribute would be the Mauricio farm and the thermal power plant in Escuintla, located at kilometer 66, the old highway to Puerto San José, municipality of Escuintla.
The plant began operations with two generating units in 1969, it has several gas turbines and several steam ones, although not all of them are currently available to generate, and it has a capacity of 38 MW, but Inde is focused on generating with its hydroelectric
No data was provided on the value of the assets or the necessary investment because these will be available after the valuation that is being carried out, he added.
“Not a tender”
Quijivix emphasized that it is about the search for a partner and it is not a bidding model like the events that are uploaded to Guatecompras. “At that moment we are going to give the necessary time for the preparation of offers within the process,” adding that it will be an open process and with transparency guaranteed by the same regulation and related legislation.
When in doubt of who guarantees that there is competition between the offers, he commented “I understand the question and they have already asked me several times. First, the acts of the administration are public; second, the regulation is very clear and we have to abide by that; INDE will disseminate the process in accordance with the provisions of the regulations, inviting those interested to participate and if there is an interest in the negotiation, it will be awarded to whoever offers the best economic conditions and advantages.
Initially, the entity already disclosed in February 2023 an invitation to manifest or express interest, to which eight companies responded. “But that’s not to say that other companies can’t participate when the event launches.”
Article 31 of the regulation states that this expression of interest can be convened through the Guatecompras system or the one established by the Inde and the term to present the expression of interest must not be more than 5 business days from the publication in a media outlet. written communication. Now they plan to continue with the next steps for the event.
When asked about who or what body will evaluate the conditions or terms of reference, as well as the offers that are presented, he mentioned that it will be the general management of Inde and, although a bidding board will not be integrated, an adhoc board will be formed. for the topic.
“Yes, a board will be appointed, but it is not the same one that reviews the files. An ad hoc meeting for the issue is important,” he said.
If there are interested parties, the negotiation will be carried out with whoever offers the best economic conditions and advantages for the Inde, refers to numeral 3 of article 58, while 4 establishes that when a decision is made, the Board of Directors, following a report from the general management, will evaluate the approval of the actions and, if approved, will enter into the participation contract with the selected company, or of which Inde is a partner, leaving the property of the generation plant and the assets provided by Inde safe, as well as their rights, ensuring the profit or profit that they should receive, refers to the numeral.
The receipt of funds by the Inde may not be less than what it would have received with the operation of the selected joint project, adds that provision.
Another query to the official was about how much Inde would have to invest in that participation and what the return on investment and profits would be like when it is already generated and marketed, to which he indicated that the participation will depend on the valuation of the aforementioned assets. .
He added that, in the regulations, the condition for the event is clear and the qualification criteria, since according to article 58 said contract may be signed as long as the negotiation is favorable to the interests of the Inde and its rights are guaranteed. If some requirement is not met, it will not be awarded, he assured.
Why are you promoting the project?
The president of Inde argues that the entity has already made a report on the detection of needs. In his opinion, more than the procedure, the reasons why Inde wants to hold a gas event should be analyzed and it is due to the lack of more energy that the country is experiencing because after being an exporter, now 16% of The country’s energy is imported, of which 14% is coming from Mexico and 2% from El Salvador. “Last week they called for 3 or 5 hours to generate with the diesel plants. So the spot price went from US$120 to US$355,” he added.
And he expanded that in 2020, the date on which he was not yet in office, a contract with Mexico was canceled in which that country provided 120 MW of firm power to Inde, although the term of the contract was 2029.
On the other hand, the call for the manifestation of interest last February caused the remarks of a politician regarding the fact that, of course, there is a preference for a particular company. “We do not pay attention to these statements because they are so technical issues that summarizing them in 30 seconds of a tick tock” is not serious. This will be a transparent event and the process is being carried out in a technical way.”
Another entity that spoke out was the Cacif (Coordinating Committee of Commercial, Industrial and Financial Associations), indicating that it voted against the search for this co-participation to generate because it can put the Inde at risk, which should focus on its function to expand rural electrification.
“At such an early stage of the process, a declaration of a financial technical risk is questionable because we do not know how much the lines and the project will be worth, today it is still in a draft process,” said the Inde director.
Legal and technical questions
Edie Cux, director of the Acción Ciudadana (AC) organization, said that all state entities, regardless of whether they are autonomous or decentralized, must abide by the State Procurement Law because it is a general law.
But he comments that in practice, in entities such as Inde, the University of San Carlos and others, they confuse what is autonomy with illegality and with the use of internal regulations they have long evaded the State Procurement Law.
In his opinion, “it is unconstitutional and there is no legal basis for them to use a parallel norm to the one that is already established in public institutions. The municipalities are also autonomous and use the State Procurement Law. In other words, there is a governing body that arises even from the Constitution of the Republic itself and therefore, they should respect that regulation.
In Cux’s opinion, the controls are very lax in the Inde regulations and are tailored to be able to carry out this type of transaction, so “there is a great risk of corruption because if there is no public tender, without the criteria you have The Procurement Law, which is minimal, is not going to be worse with this regulation because there is no type of control that is going to limit discretion and stop promoting competition. And it shows that public spending could be carried out without any control”.
Separately, the former Vice Minister of Energy and Mines, Jorge Mario García Chiu, indicates that Inde’s contracting regulations could authorize them for some purchases or contracts, but when it comes to large projects, especially like the one being promoted, it should win an open and international tender. And to avoid inconveniences, it should be through the State Procurement Law, especially since it is about achieving the greatest benefits of a state entity.
“The important thing is that it be a competitive and open event; if not, suspicions are generated. If the regulations allow them, as long as it is through a public tender, it would be something similar, only with its own procedure, but it must be analyzed because the Inde could not ignore the Procurement Law. The Inde agreement is a regulation subsequent to the Organic Law and that will never be superior to a law approved by Congress. There are hierarchies between the laws, regulations and provisions”, he expressed.
And he considers that it is a mistake that with the intention of expediting procedures, their own regulations are made that are not necessarily in harmony with the Procurement Law.
The other doubt commented by García Chiu, is how the natural gas they need to generate energy is going to be provided. The visible options are to take advantage of the well in Petén that is exploiting gas; or importing natural gas, which is technically not feasible, since Mexico has gas supply problems for its domestic market and the gas pipeline does not reach the country.
Also, importing it by boat is not so easy because in order to transport it that way, you have to liquefy it and then turn it into a gas again through a special plant that Guatemala does not have.