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Whitefish Energy has suspended all work on Puerto Rico’s electric grid, which it was hired to mend after the devastating hurricane season this year. The company said Puerto Rico’s now-bankrupt state utility Puerto Rico Electric Power Authority had yet to pay US$83 million for services rendered.
The contract that Whitefish signed with PREPA last month was for a total US$300 million. Now, the Puerto Rico company has countered Whitefish’s claim with its own. It said, as cited by ABC News that it had stopped making payments to Whitefish after it received “a communication from one of Whitefish's subcontractors requesting the stoppage of any payment to the company, since it owed the subcontractor money.”
Whitefish, for its part, explained in a letter to PREPA that it pays its subcontractors as soon as it receives payments from PREPA and in some cases even before that, but the delay in payments has made this no longer possible.
The US$300-million contract caused a lot of outrage in Puerto Rico and a probe in the United States: Montana-based Whitefish has only two full-time employees but it was contracted by PERPA to rebuild 100 miles of transmission lines in the hurricane-stricken country.
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Some terms of the contract were especially controversial: hourly rates of up to US$240 per worker plus a 16-hour seven-day working week that allowed for a lot of overtime, the House Natural Resources Committee found. Eventually, the contract was canceled, but Whitefish remained under obligation to complete its work within an additional 30-day period.
Last week, the chief executive of PREPA and Puerto Rico’s governor asked Congress for a US$94-billion lifeline to repair the damage caused by Hurricane Maria. The bulk of the package was to go towards fixing the island’s electricity grid, which was devastated by the hurricane. Three days later, PREPA’s chief resigned. To date, less than half of electricity consumers in Puerto Rico have access to it.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.