Dear Editor,
Over the past several months GPL has been in a downward spiral due to the poor performance in managing its operations which has manifested itself in the purchase and use of contaminated fuel to run its diesel generating units at Anna Regina with consequential costly damage to the equipment, the oil spill from its storage facility in Georgetown with extensive damage to the environment and a health hazard to the folks who live in Kingston, untimely worn-out bearings on its diesel engines, burnt-out alternators and transformers, escalating electricity thefts from its grid and so forth and so on.
The effects of these systemic problems reveal that GPL’s operation is unreliable and needs immediate improvement since the situation has resulted in forced outages, service curtailment on a rotating basis, damaging voltage fluctuations occurring daily as a result of inadequate generating capacity, frequent breakdowns and failures in its transmission and distribution facilities. The resulting black-outs and brown-outs have adversely affected customers, and as a consequence they have suffered tremendous financial losses due to damage to their electrical equipment such as burnt-out compressors, motors, TVs, washers and dryers, etc, with unfortunately no recourse for financial recovery. In addition, the daily inconveniences suffered cannot be quantified and the living standards customers have come to expect have been shattered due to an unreliable power supply which has resulted in major extra costs to all users and the economy as a whole. Adding insult to injury, customers continue to pay one of the highest rates in the world for a kilowatt-hour of electricity and for the shoddy service handed down to them. It is evident also that the frequent emergency repair works which have been carried out have added quite a bit to operating costs, and the accompanying reduced power sales have resulted in substantial revenue losses to GPL. Given this sad state of affairs with regard to the poor operating performance of GPL, any relief for customers in the form of a rate reduction for electricity when there have been substantial fuel price reductions from the peak year 2008 may indeed be a pipe dream.
The demand for power in Guyana is increasing at a rate of about 10% per year, but GPL has no strategic plan in place which can be implemented quickly to meet this demand and which is critically important for the economic development of Guyana. Further, the system has no reserve generating capacity (which should be at least 25% of installed capacity if its equipment is properly maintained) for contingency purposes should the need arise.
Over the past several years, GPL has not had any planned programme in place for capital improvements in the power system. Most of what was done was ad hoc with no planned maintenance of its facilities; just crisis maintenance and management of the system, the adverse effects of which have been demonstrated so painfully during the past several months.
GPL’s mandate is to maintain an efficient and well-coordinated system to provide reliable electricity supply including generation, transmission and distribution to designated parts of Guyana. It has failed to deliver and there is little expectation that it could do so any time soon for several reasons. Firstly, most of its equipment is obsolete because of age and/or poor maintenance and its output is well below its various rated capacities. Therefore, capital infusion is urgently needed to modernize the power system to accommodate growing demands and upgrade systems performance; however, the reality is that investment is in short supply or has all but dried up. At a recent press conference, GPL Chairman Winston Brassington, stated that he expects construction of a hydropower plant to start later this year. He may be overly optimistic since the actual cost of hydropower may be considerably higher than is contemplated, because of high initial capital costs, long construction period and the resulting accumulation of interest charges during construction. Since investment capital is in very short supply at this time, particularly for developing countries, conventional diesel generating sets/wind turbines become even more attractive than they already appear to be to meet Guyana’s urgent electricity needs.
Finally, GPL’s continual poor performance may very well have been affected by its shortage of well-trained, technically competent staff. The lack of trained personnel is a principal cause of poor performance. For instance, the lack of capable maintenance and operations staff could have played a major role in contributing to the excessively long downtimes it takes GPL to carry out badly needed repair and maintenance to its facilities. Therefore, unless GPL is managed by executives with proven capabilities there is no way that its customers can expect service improvements and/or a reduction in their electricity rates any time soon.
Yours faithfully,
Charles Sohan
