The Guyana Power and Light (GPL) may face challenges in the running of its operations in 2013 after the combined opposition yesterday slashed the $10.2 billion intended for the company by more than half to $5 billion.
As the consideration of the budgetary estimates continued, Prime Minister Samuel Hinds was hard-pressed to explain why such a large amount should be provided to the company despite its failure to deliver on promises to cut losses. Last year the company registered losses of $5 Billion despite soliciting $6 Billion in subsidies and $5.35 Billion in loans from the Government of Guyana (GOG).
Also up for a reduction under the Prime Minister’s proposed expenditure were funds meant for the Guyana Elections Commission (GECOM). Amounts for this body were however passed in its entirety after Hinds satisfied questions posed by the opposition.
The Prime Minister was not successful where GPL was concerned. In his futile attempts to defend the proposed amounts he implored the opposition not to look at the proposed funds as an attempt by a company hemorrhaging revenue to cover its losses, but as an investment in the company’s attempts to suppress high tariff levels.
The Prime Minister shared that around $20 billion is used annually to subsidise high electricity costs, and said that the loss of the monies proposed in the 2013 budget for GPL will hamper the company significantly.
A Partnership for National Unity (APNU) MP Carl Greenidge attributed the tariff costs to the company’s inefficiency and posited that the company’s losses in commercial revenue may very well be due to the high tariff levels on electricity.
Greenidge suggested that many of the persons who seek to establish illegal connections or refuse to pay their bills do so because the cost is too high.
Hinds in turn said that it was the consideration of cost which led to the birth of the Amalia Falls Hydroelectric Project, which once realised will enable the company to cut its electricity production cost by as much as half. In the meanwhile, he said, it is very difficult to do better in terms of electricity prices, especially since more than 70% of the company’s revenue goes back into purchasing fuel.
He said that while the company would like to reduce its charges, such a move is not practical considering the amounts it already expends on suppressing tariff levels.
Greenidge however was unmoved by the Prime Minister’s promises and projections and asked what assurances could be given that the amounts requested would help the company reduce its recurring losses.
Alliance For Change (AFC) MP Moses Nagamootoo implored the government to provide his party with sufficient reasons to rethink its intentions to make cuts to the company. Nagamootoo said “the AFC is trying to understand the explanations of the government but we are so far unimpressed.”
The Speaker of the National Assembly, Raphael Trotman, also encouraged the Prime Minister to paint a better picture of why it was so imperative that GPL receive the amounts it had been allocated in the budget.
Hinds went on to explain that GPL would be deficient of about 20% of what it needed to sustain itself. He said that the lack of funds would result in the company’s inability to purchase fuel and other equipment pertinent to its operations.
In the end the pleadings of the Prime Minister were futile as the opposition remained unconvinced that the $10.5 billion would enable it to cut its capital and commercial losses voted to cut $5.2 Billion from the company’s subvention.