Wednesday, September 18, 2019

Cobra power contract remains unamended by Puerto Rico utility

By on November 1, 2017

Prepa used the same type of document for both Whitefish and Cobra, as evidenced by copies obtained by Caribbean Business. (Erika Rodríguez / Getty Images)

SAN JUAN – A week after the Puerto Rico Electric Power Authority (Prepa) had to admit that its contract with Whitefish Energy Holdings had not been approved by the Federal Emergency Management Agency (FEMA), and therefore should be be amended to eliminate the clause that stipulated so, the public corporation has not yet done the same with the contract signed with Cobra Acquisitions LLC.

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Cobra, a company incorporated this year as a subsidiary of Oklahoma-based Mammoth Energy Services, signed a contract with Prepa for $200 million to complement the work being carried out on the island by Whitefish. Prepa used the same document model for both companies, as evidenced in the copies obtained by Caribbean Business.

Clause 68 of the master agreement, signed by Cobra on Oct. 20, indicates that “PREPA hereby represents and warrants that FEMA has reviewed and approved of this Contract and confirmed that this Contract is in an acceptable form to qualify for funding from FEMA or other US. Governmental agencies.”

 

 

Moreover, in a teleconference held the same day the agreement with Prepa was signed, Mammoth’s chief executive officer, Arty Streaehla, stated that FEMA representatives were involved throughout the process to ensure the agreement complied with the reimbursement requirements of that federal agency.

On Oct. 27, FEMA’s deputy director of public affairs, Eileen Lainez, issued a statement stating that any contractual language between Prepa and Whitefish indicating that the agreement was approved by FEMA was inaccurate.

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FEMA’s spokeswoman in Puerto Rico, Deliris Ocasio, reassured Caribbean Business on Wednesday that her agency does not review any contract because it is not one of the parties. “We see it after they are signed,” she said.

“At the moment they are in the process of making that amendment” as officials of the public corporation and Cobra are exchanging documentation, Prepa spokesman Carlos Monroig said when asked.

Mobilization begun

Cobra spokesman Andrew Wilson told CB that the company sent a first group of 60 people to the island to establish its operations center. In documents provided by Wilson, the company says it expects to have about 500 workers in the field in the coming weeks.

Monroig said Cobra crews “are in transit.”

Whitefish to continue Puerto Rico work until power lines are up

According to The Oklahoman, in the conference call in which the agreement was announced, Mammoth executives explained that they would receive a $15 million payment to mobilize its crews. Cobra reportedly is the result of Mammoth’s $8 million purchase, at the beginning of the year, of two small companies specializing in the repair and installation of power transmission and distribution lines. Initially, it had 58 crews with 275 employees, but for Puerto Rico they expect to have 500 workers.

Mammoth is mainly dedicated to the oil services business that identified a related business in public utility infrastructure that could provide them with a constant cash flow.

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