PM defends withdrawal of Linden power subsidy

-welcomes Greenidge suggestion

Prime Minister Sam Hinds yesterday defended government’s plans to eventually end subsidised electricity for Lindeners, saying that because of the developments taking place and impending in the town, it will be less reliant on the subsidy.

The announcement in Finance Minister Dr Ashni Singh’s budget speech that government will be moving to reform the arrangement regarding electricity in Linden has not gone down well with residents of the mining town, who have staged a number of protests over the move.

Sam Hinds

However, Hinds, during his presentation when the budget debate continued in the National Assembly yesterday, stated that the full measure of the changes will not be felt until the beginning of 2013. “The government [by July 1, 2012] intends to… align the classification of customers in Linden with that of GPL and adopt a tariff schedule of GPL with the possible amendment,” he said.

On the latter point, he disclosed that that government was looking favourably at a suggestion by APNU MP and Shadow Finance Minister Carl Greenidge that in subsidising the consumers of GPL, “we should think of structuring tariffs so that an initial quantity of electricity is heavily subsidised even at no charge so as to give a base to everybody. At the end of the debate, the Honourable Minister of Finance said to me that that was a good suggestion, let’s see how we might restructure or amend the tariff structure accordingly.” Hinds added, “We welcome the suggestion from [Greenidge] and when we would have passed this budget we [will] look at a quick engagement on a relevant amendment to the tariff structure.”

The PM noted that the provision of electricity to all households is one area in which government has sought to unite people, providing access and pointed out that this has been the aim since the early 1970s. “It was since that time that the government of the day espoused unification of the electricity supply systems in Georgetown and Linden,” he said.

According to Hinds, government will calculate the monthly electricity bill of Linden customers in accordance with the GPL tariff and said that for the rest of this year, customers in Linden will pay only half of the bill as calculated. Bauxite pensioners, he noted, will receive the first 100 kilowatt hour at no charge and they will pay according to the tariff for any consumption that exceeds this. The PM added that even with the new measures, government will be contributing $1.865 billion into subsidies in Linden.

Addressing Deputy Speaker of the National Assembly Debra Backer, Hinds said, the merger of Linden into the national grid was proclaimed since the mid 1970s and he recalled that in 1976 the then Prime Minister Linden Forbes Sampson Burnham, addressing a rally in Linden, said the Guyana Electricity Corporation was to have taken over the supply at Linden.

Hinds said that now is a good time to complete the merger and end the subsidy, which he described as unsustainable. “The provision of electricity to workers’ homes in a company town as Mackenzie at no charge or very highly subsidised charges was understandable. However, Linden today is no longer a company town. Today less than 10 percent of households in the Linden area [have] at least one person who is employed by today’s bauxite company, as compared with more than 90 percent of households in the last days of DEMBA and the first days of the nationalised bauxite company,” said Hinds.

The PM said that the $2.576 billion subsidy paid last year amounts to about $200,000 per household per year and $600,000 per year to the average business customer. “I submit that this is no longer tenable. Linden cannot proceed to grow and develop on that basis.

We have to merge the provision of electricity in Linden into the national grid,” he declared.  “Linden is very proudly Guyana’s second town. Much is riding on Linden. Much is expected of Linden in the further growth and development of our country,” he added, saying that 100 years ago Linden started as a full company town and in many ways it was disconnected from the rest of Guyana. “Things began to change from about 1965 as ALCAN Demba began passing workers’ homes and responsibility for same to the workers themselves,” he said.

Hinds said that while there was some degree of disruption and trauma because of this, the people of Linden were able to adjust and are today better off for it. “Linden became more important in our country as the road connecting Georgetown and Mackenzie was opened. And there is one more reform left to completely transform Linden into a regular Guyanese town and that is the merger of electricity provision in Linden into the country’s grid,” Hinds argued.

“As the Minister [of Finance] has asserted, Guyana as a whole – Linden too – is at a most important juncture in its economic history. Linden too is poised for rapid takeoff,” he added.

Hinds said that because of the development of the Amaila Falls Hydropower project, Linden stands to benefit from employment with regard to the provision of services to the company building the hydropower station, since all of the equipment and materials will have to be barged through the town.

He also spoke of development with regard to the bauxite companies in Linden and in Upper Berbice, which he said will bring jobs to these places. “Linden overtook Bartica and has become the transit town and gateway into the hinterland of Guyana and into Brazil,” he noted.

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