No more GPL bailouts when Amaila comes on stream – PM

Prime Minister Sam Hinds says that there will be no need for the Government to bail out GPL when the Amaila project comes on stream since the projected cheaper cost of generation would go towards capital, filling the gap left by uneconomic tariffs.

He was speaking at a sitting of the joint Economic Services Committee and Natural Resources Committee held in Parliament Chambers on Wednesday. The committees met with the board of GPL.

“We would be seeing a reduction in generation costs when we go to Amaila,” Hinds asserted. “I did say last week that our position has been when Amaila comes on it would give us an opportunity to do some rebalancing of tariffs and every customer group will have a reduction,” he said.

“We may propose to provide the industrial consumers a larger reduction and there will be advantages of creating business opportunities and employment,” he said, with a view to enticing large industrial companies to return to the grid as is necessary for the success of Amaila.

He said that with the lower tariffs with Amaila, there will no longer be the need for the Government to resort to the Treasury to bail out GPL. “We are projecting a clearing of the losses and the remaining monies will be available to reduce tariffs all around,” he said.

Critics have argued that there is no guarantee that tariffs will be immediately lower as claimed by the government.

Hinds said that the tariff is calculated based on what is needed for the entity’s operation. “Once tariffs are supressed there is a question of filling that gap. That gap can be filled by the equivalent money provided but the outcome of this is that there will be some loss in the ability to provide for the improvement of the network,” he said.

“Government has been meeting quite a bit in terms of the additional generators that we have seen over the last five years,” he said.

The entity is also experiencing challenges in finding qualified people willing to work there, said Chairman of GPL Winston Brassington.

“Despite advertising on a number of occasions, we have had difficulty finding and retaining key technical staff. This is an issue for GPL.

We have not been able despite advertising to find at a very high level adequately experienced and skilled persons who are willing to join GPL,” he said.

Brassington said that this is going to be remedied partly by a project by the Inter-American Development Bank.

“The IDB is working with GPL on a corporate development plan. The IDB has already advertised for firms to be prequalified for this activity and we expect that by second quarter of next year through funding and support from the IDB that we will have some support for the management team in improving managerial capabilities and improving the overall institutional operations of GPL at every level,” he said.

This project had not been officially announced here by the government but had been reported on by the Stabroek News based on an advertisement placed by the IDB in the international media.

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