While responding to a tax relief call made by the GAWU General Secretary on Wednesday at the GLU Triennial Delegates Conference, President Jagdeo almost casually slipped in that another US$20M will be needed to secure power generation to meet peak demand and ensure stability in supplies.
The following day, the GPL CEO, Mr Bharrat Dindyal disclosed that the power company was seeking to acquire another 15.6 MW. The President attempted to sugar-coat the announcement by saying that it would be the final resort to new power generators prior to the Amaila Falls hydropower project. Given the innumerable delays to this project and the questionable decisions associated with it the President is being overly optimistic particularly since he won’t be the one sitting in the Office of the President when the project really gets going.
It is to be hoped that the sourcing of the new 15.6 MW generators will be done in a manner that coheres with the utmost transparency and fairness. In recent years the Christmas generator ploy has been utilized by the government to enable approaches to favoured suppliers without pursuing the fairest method.
Aside from all of that, the major concern that the public will have about this announcement by President Jagdeo is that it joins the long list of suitors, schemes and architects that have been associated with the state-run electricity system but which have failed to yield the uninterrupted supplies hoped for 18 years after the PPP/C entered office.
Names like Leucadia, Wartsila, the Commonwealth Development Corporation, ESBI of Ireland, Sask of Canada, Enron, Coastal Power Co. of Texas, Hydro Energi-Qui of Canada, Eldora Energy and Industrial Development Corp, Demerara Energy Sources, J Kaehne and Associates, Canasia Power Corporation of Canada, Kirloskar Brothers Limited Energy Consulting Incorporated of Canada and Venro Petroleum Corporation and others have at one point or the other been mentioned as being the potential saviours of the power company.
Not to be forgotten is the bevy of supposedly top managers funded by the IDB and others and local recruits who have failed to bring the problems of the power company under control. And while power supply is far, far better than during the last years of PNC governance, considering the amount of money that has been sunk in the state-owned power system and the subsidies absorbed, the public should have been in a better place.
The power problem has shown itself as intractable and incapable of being effectively managed by whatever the PPP/C throws at it. Moreover, 18 years after they acceded to office, the PPP/C’s management of the industry has failed to comprehensively reduce line and commercial losses and this bleeding of the system is a monumental drain on the economy. Indeed, the transmission and distribution system remains in a parlous state and the longstanding frequency conversion project is still in train literally decades later. A huge Chinese loan which will burden future generations will now be employed to improve T&D.
Parts of the T&D system are in such bad shape that GPL was forced to admit last week that both the converters at its Sophia power plant and a feeder at its Kingston station failed, causing recent prolonged blackouts. The converters were manufactured in 1976 and installed in 1977. Could there be a rational explanation as to how those converters avoided replacement for 18 years under this government?
It appears to be the case that no matter how much money and new generation is forced into the system that unless the government and GPL take charge of fundamental T&D problems recurring blackouts will be a nightmare that citizens and the business community have to put up with and more and more private generators will be installed thereby placing the utility in a bigger hole. Not even supposedly cheaper power from the Amaila Falls project will end the power outages if the T&D system remains in a chaotic state.
The present condition of the electricity system is a signal lesson on how massive loan funds, in this instance, from the Inter-American Development Bank have failed to reverse the rot while adding significantly to the debt stock of the country. At the height of its intervention, expensive managers were recruited under an IDB-funded contract for the power utility but they quickly failed to make an impact.
It is also worthy of note that despite President Jagdeo’s emphasis on a low carbon economy these new generators will be fossil fuel-based. Despite his high-browed declarations on a low carbon economy, President Jagdeo’s government has failed miserably to replace fossil fuels with green energy. The one significant project the government can point to is the bagasse-to-electricity plant at Skeldon but that can hardly equate to a revolutionizing of energy sources. And as was pointed out in a letter in Saturday’s edition of Stabroek News, the government has also not moved on the prospect of ethanol blends.
Given the cheery promises that the government and power principals had offered to the Guyanese public and the business community in the last quarter of least year that blackouts would be minimized and that there would be sufficient generating capacity, GPL has to come good and explain what went wrong with its projection. It must also explain why additional generating capacity will surmount the inevitable outages from the T&D weaknesses. It must further demonstrate that the problems on West Demerara and in Berbice will be similarly rectified. In yesterday’s Sunday Stabroek a letter writer complained about severe power outages in Berbice.
The essential truth remains that for four decades – almost evenly split between the behemoths – there has been inexplicable failure and incalculable wastage in bringing order to the power system. When will this end and at what cost?
