Ruth Potopsingh, Greg Christie and Wykeham McNeill

THE PUBLIC Administration and Appropriations Committee of Parliament wants Contractor General Greg Christie to conduct an investigation into the circumstances surrounding the purchase of a shipment of dehydrated ethanol by the Petroleum Corporation of Jamaica (PCJ) from Infinity BioEnergy.

It has been revealed that the shipment of ethanol was obtained without a signed contract, and at a cost significantly higher than world market prices at that time.

Group managing director of the PCJ, Dr Ruth Potopsingh, last week, disclosed that the shipment of ethanol purchased from the Brazilian company last year was priced at US$2.31 per gallon, 14 cents more than the US$2.17 per gallon on the world market at that time.

The shipment contained 5,200 cubit metres (1,385,224 million gallons) of dehydrated ethanol.

This meant that the PCJ spent some $17 million more for the ethanol than the world market price.

Eyebrows were also raised during the committee sitting when Dr Potopsingh conceded that the ethanol was procured without a signed contract.

Committee member, Dr Maurice Guy, wanted to know why the PCJ was under an obligation to buy the ethanol from Infinity BioEnergy in the absence of a contract.

"That's a very good question," responded Dr Potopsingh, while adding that the intention of the Government was to have finalised the sugar-divestment talks with Infinity BioEnergy. "So in good faith, we did all that we could to facilitate the sugar negotiations, which as you know, have been a big drain on the economy," Dr Potopsingh added.

the technocrats

Chairman of the parliamentary oversight committee, Dr Wykeham McNeill, raised concerns about the transaction during a committee meeting where government officials were invited to make a presentation on the work of the energy ministry.

"Every ministry has accounting officers, and each agency also has its accounting officers who are the ones (the technocrats) doing the negotiations and getting the best price for the people of Jamaica," Dr McNeill commented.

"In this case, we did not get the best price and ... . What is being pointed out to us is that the process was hijacked," he added.

The committee was informed that former PCJ chairman, Ian Moore, had been in discussion with Infinity BioEnergy about the price, quantity and other aspects of the deal.

"Unfortunately, a series of emails was exchanged between the chairman and Infinity BioEnergy, which then gave rise to an obligation to take (the shipment)," explained senior legal counsel at the PCJ, Glenford Watson.

divestment deal

He said the country had been in negotiations with the Brazilian firm to sell the government-owned sugar factories and it was felt that the divestment would have been closed before, "we had need for the shipment. If we had closed, we would have been obliged to take from Infinity BioEnergy".

Watson said even though the divestment deal between the Government and Infinity BioEnergy fell through, the correspondence by emails between the former chairman and the company had committed the PCJ to purchase the shipment of ethanol.

The PCJ legal counsel further explained that advice was sought from the solicitor general, who reportedly argued that based on the emails exchanged, the Government was obliged to take the shipment.

He said a second shipment from the company was rejected after it became clear that Infinity BioEnergy would no longer be able to purchase the local sugar factories.

Quizzed about the procurement process to acquire the shipment of ethanol, Dr Potopsingh told the committee that the PCJ had applied for a sole source through the Office of the Contractor General and this had been approved.

cost the chairman his job

Potopsingh said this was based on the fact that the country was in negotiations with Infinity BioEnergy.

This sparked a volley of questions from committee members.

"It is our understanding that it cost the chairman his job," said Phillip Paulwell, opposition member of parliament and former energy minister.

Watson replied: "Yes, but we mitigated and stopped one of the shipments."

Moore was fired by former energy minister Clive Mullings who himself was later sent packing by Prime Minister Bruce Golding.

Last year, Petrojam racked up a $7.7 billion loss, which energy minister James Robertson attributed to the devaluation of the Jamaican dollar, marketing and other expenses linked to the introduction of E-10 petrol and the accounting methodology used in the petroleum sector.