10 MW relief soon – GPL

Ten-megawatt generators will be in Guyana by Sunday to boost the shaky electricity supply for the holidays but the Guyana Power and Light (GPL) still faces an “unsustainable financial position.”

The company yesterday also announced a 9% across-the-board wage increase that includes the 4.5% Annual Performance Assessment (API) for its 1100 unionized workers.

GPL Chairman Winston Brassington told the media at the company’s Middle Street office during a press conference that the generators from Miami to supply the 10 MW of power will arrive in Trinidad and Tobago (T&T) by Friday and in Guyana by Sunday for setting up by Monday. This, Brassington, said would facilitate additional power supply for the holidays.

In addition, early next week the Guyana Sugar Corporation’s (GuySuCo) Skeldon Mordernization Pro-ject supply of 7.5 MW is expected to come on stream and Berbice is slated for power from this source.

In Demerara, there is expected to be 87 MW of power for the holidays, according to GPL, which said that based on peak demand during the season this is more than adequate since the peak holiday demand is 77 MW.

In relation to outages, Chief Executive Officer Bharat Dindyal explained that next year the company plans more efficient and faster service, noting that the blackouts currently being experienced are due to repairs and plant maintenance.

On the company’s current rates, Stabroek News asked whether they were sustainable in light of rising fuel prices. Dindyal admitted that the rates are not economical based on current fuel prices but any tariff initiatives will be a last resort and the company continues to work on loss reduction.

In the press statement yesterday to the media it was noted that “GPL tariffs including fuel surcharges have not increased since mid-2005. At that point, the weighted average cost per barrel was US$33.” GPL now purchases oil at over US$95 per barrel. “To place this in context, the November fuel bill exceeded its entire revenue from all customers for the same period. Against this background, GPL will face a very difficult period in 2008,” said the statement. It also declared that “GPL’s financial position continues to be extremely challenging. With current oil prices and existing tariffs, it is facing an unsustainable financial position.”

Stabroek News in an interview asked Brassington if the company was in danger of defaulting to its creditors and he said that the company’s “liabilities are rising,” but did not give further details.

In relation to the commercial losses of the company, Stabroek News was told it will be tackled under a five-year plan to rein in non-technical losses, but Dindyal stated that the technical losses would require quite significant investment and this would be done over a 10-year period.

In relation to the Venezuelan PetroCaribe arrangements as a source of fuel, Dindyal said that GPL is not taking fuel under this arrangement and if the company was receiving fuel under this arrangement the fuel will still have to be paid for and it will not translate in the company getting cheaper fuel. Brassington said that any credit under this arrangement goes to the government.

President Bharrat Jagdeo recently said that there was a possibility of a black Christmas because he had been misled about the financial and operational situation at GPL. GPL Chairman Ronald Alli and the Head of the Guyana Energy Agency Joseph O’Lall were later relieved of their posts.

Wage increase

Earlier this week GPL notified the unions, NAACIE (the National Association of Agricultural, Commercial and Industrial Employees) which represents 996 workers, and the Guyana Public Service Union (GPSU), 110 workers, that it was paying the 9% increase. Payouts will begin today and be retroactive to January 2007, said a press statement from the company.

“The 9% increase includes an across-the-board increase which includes an in-scale increment and the Annual Performance Assessment (API) which will be paid earlier than normal,” said the statement.

This API shall be paid across the board at 4.5% taking account of the overall performance of its employees and the challenges facing its employees – this payment shall be completed before Christmas rather than January as is the norm, says the company.

GPL’s total wages and salaries and all other employee payments and benefits in 2007 will total approximately $2.5B, with the average unionized worker receiving $2M per year in payments, benefits and NIS.

“GPL considers the pay-out challenging having regards to previous years’ increases in salaries and the difficult financial position it currently faces,” says the company. The company called on workers to “respect the burden that the current payouts pose to the organization and to work diligently in the interests of the company”. It also asked consumers to conserve on energy.