With Whitefish Deal Canceled, What's Next For Puerto Rico's Recovery?

Oct 30, 2017
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RACHEL MARTIN, HOST:

Puerto Rico is canceling a controversial 300-million-dollar contract with Whitefish Energy for work rebuilding the island's electric grid. The move comes after questions arose about how this tiny Montana-based firm won the no-bid contract and concerns that the company Whitefish was charging Puerto Rico exorbitant rates for the work. NPR's Jason Beaubien is in San Juan, Puerto Rico, and joins me on the line. So, Jason, Puerto Rico takes this bid from this small company in Montana and now they're canceling the whole thing. What's going on?

JASON BEAUBIEN, BYLINE: Yeah. They - basically, here's what we know, that in the moment when Hurricane Maria was bearing down on Puerto Rico, the utility company sort of could see that the electric grid looked like it was going to just get completely destroyed. And so they frantically are looking for somebody to come in and help rebuild after that happens. Now, unfortunately, the utility at this point had just filed for bankruptcy a few months earlier, doesn't have any money. This group Whitefish comes up, and they offer to come in, and they say they will do it. And what happened is essentially this contract got worked out right in the midst of this natural disaster that was was occurring. And, you know, at this point, it seemed like Puerto Rico was just stuck with it. But yesterday, Governor Ricardo Rossello in announcing this decision basically said, you know, it was not an easy decision, but we were in the midst of this massive blackout, and he had to take it.

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RICARDO ROSSELLO: There are two competing factors, of course, over here - how fast can we get our energy grid up, No. 1, and No. 2, the - you know, the process that's ongoing with the Whitefish investigation.

MARTIN: Wait, so what's that? I mean, the - Whitefish is the name of the company. So there's an investigation into something that they did wrong.

BEAUBIEN: So there are multiple investigations going on. He's got the comptroller of Puerto Rico reviewing what had happened. The U.S. inspector general is looking into this. FEMA has expressed that it has significant concerns with this contract. And so at the moment, you've got all of these different investigations ongoing. And basically, they're trying to figure out how it happened that this deal got struck. As you mentioned, this is just a - it was a two-man operation in Whitefish at the time - Whitefish, Mont. - that managed to win a 300-million-dollar contract to basically be the biggest private contractor working on rebuilding basically the transmission lines across almost the entire island. They would be doing it along...

MARTIN: Right, it would be a huge boon to them, obviously.

BEAUBIEN: It would be a huge boon to them. And that is what is trying - they're trying to understand at the moment - what happened to allow this contract to go to a small firm and for them to be charging extremely high rates, as much as $319 an hour for alignment?

MARTIN: Right. And we should also say there was this concern about conflict of interest because the secretary of the interior, Ryan Zinke, sits on the president's Cabinet, and this happens to be his hometown. So there are all these concerns that there was this kind of conflict of interest here. Where - what happens now? I mean, how is the cancellation of this contract going to affect the recovery efforts?

BEAUBIEN: You know, that is really a huge concern. PREPA, which is the utility, they've got their own crews that are out there. Those crews have actually been out there. Whitefish, however, also had several hundred crews and was supposed to be bringing in several hundred more this week. The governor has struck a deal with the states of Florida and New York to send in utility crews. You know - but obviously it's going to take some time for those guys to get in here and get up and running. So at this point, it does seem like this is going to be, you know, a significant setback to this major project of getting electricity going again in Puerto Rico.

MARTIN: NPR's Jason Beaubien reporting from San Juan, Puerto Rico. Thanks so much, Jason.

BEAUBIEN: You're welcome.

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