Wed, Nov 22, 2017 - Page 10 News List

Whitefish halts Puerto Rico rebuild early over debt

Bloomberg

The company that landed and then lost a US$300 million no-bid contract to rebuild Puerto Rico’s storm-ravaged grid says it is halting its work early, because the commonwealth’s utility has not paid it US$83 million it is owed.

Whitefish Energy Holdings LLC is shuttering its operations 10 days earlier than planned, because it can no longer pay its contractors, chief executive officer Andy Techmanski said.

The tiny Montana-based company is under investigation after securing a sole-source contract with the Puerto Rico Electric Power Authority (Prepa).

“Today we had to stand down our crews,” Techmanski said on Monday in a telephone interview from Puerto Rico. “We just don’t have the money to continue to support and bankroll Prepa’s operation.”

The work stoppage is the latest blow in efforts to restore power to the island, which in September lost 80 percent of its electric grid after twin hurricanes.

Within the past week, Prepa executive director Ricardo Ramos resigned after facing criticism in the US Congress over the Whitefish contract.

Four Florida utilities with hundreds of workers that have been hired as subcontractors by Whitefish plan to leave the island in the coming days, Whitefish spokesman Ken Luce said.

Also on Monday, the Army Corps of Engineers said it temporarily halted a contract with Fluor Corp — which was also working to restore power — over safety concerns. The corps said the company could restart work yesterday.

Corps spokesman Jeff Hawk said in an e-mail that Fluor workers discovered grounding wires installed prior to line repairs had been removed, and work was suspended to ensure it was safe to proceed.

“This stoppage demonstrates effective safety protocol that exists to identify issues before they pose a risk to human health and safety,” he said. “After discussions with all three organizations, we addressed concerns and lifted the stop-work order.”

Less than 47 percent of the island’s power capacity is back up.

A letter dated on Sunday from Whitefish to the bankrupt utility demands payment for work it has performed — in addition to more than US$39 million “for anticipated demobilization costs.”

Prepa and Fluor did not respond to requests for comment.

Whitefish said it would resume work if it got paid.

The company has been under fire for the prices it charged the bankrupt utility, leading Prepa to cancel its contract effective on Thursday next week.

Under the accord, Whitefish charged as much as US$240 an hour for workers, an amount the House Natural Resources Committee called “exorbitant.”

The contract also assumed a 16-hour, seven-day workweek, allowing contractors and subcontractors to charge Prepa for huge amounts of overtime, the committee said in a report released on Nov. 13.

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