Westport Energy Contract Update

This is an overdue update on one of the many dicey energy contracts that blossomed in the wake of the 2009 coup.

Back in November, 2011, the then-head of the Empressa Nacional de Energia Electrica (ENEE), Roberto Martinez Lozano entered into a contract with Westport Finance LLC, and Ira Ginsburg as its legal representative, for the installation of emergency power generation capacity totaling 100 megawatts for 16 years. 

It was a lucrative contract for Mr. Ginsburg, if carried out, and he stood to make a ton of money.  Martinez Lozano said Westport Finance LLC was backed by the Finnish energy equipment company Wartsila. Westport Finance LLC is run out of Ira and Carla Ginsburg's home in Westport, CT.  The full contract is available on ENEE's web site here.

Shortly after the contract was signed, approved by Congress, and published per Honduran law, Martinez Lozano was dismissed as head of ENEE.  It turned out that Martinez Lozano had lied about one of the steps necessary for the contract to be approved by ENEE prior to its submission to Congress.  The contract was never properly approved by a majority of the directors of ENEE when a quorum was present.  To date it still has not be properly approved.

When contacted in February, 2012 by a blogger in Westport, CT, Ginsburg said:

Politics in Honduras are unique.  My contract is in full force and effect.  The Minister of Energy's problems pre-date the negotiation of my deal, in 2009; they go back several years.  Honduras is ruled by an oligarchy of three families.  They own 100 percent of power generation and all the newspapers.  The fact that a power company from outside the country came in -- they don't like that.

Yikes.  Westport Finance LLC was founded in 2009, and began negotiating for a Honduran energy contract in its first year of business?  Was that pre- or post- coup, we wonder?

Westport Finance missed every milestone in the contract, and appears to have done nothing since the signing.  The new head of ENEE, Emil Hawit, told the press on April 23 that Westport Finance LLC had attempted to file the financial guarantee with the Honduran government, but it was returned because it didn't meet the legal requirements: it didn't follow the template attached to the contract. 

Hawit also told the press on that day that sometime prior to April 23 he had notified Westport Finance LLC in writing of their non-compliance.  Under the terms of the contract, Westport has until one month after notification to begin remediating all the non-compliant issues, and if they do, up to two more months to come into full compliance with the terms of the contract.  Otherwise, if Westport does not begin correcting its compliance, two months after notification, the contract is terminated.

As of today, there is no indication that Westport has done anything to come into compliance with the contract terms. Depending on when, exactly, Hawit notified them that their contract was non-compliant, the one-month clock should be getting close to running out. It should be an interesting couple of weeks.