GPL needs more than a probe or an audit

Dear Editor,

The Ramotar administration’s decision to have GPL seek a 26.7% increase in electricity tariffs, by citing the combined opposition’s $5.2B cut to the corporation’s 2013 $10.2B budget, reeks of irresponsibility and insensitivity.  Irresponsibility, because it knows that the majority of GPL’s working customers are paycheck-to-paycheck workers who will not be able to afford such a steep increase, and insensitivity because it refuses to accept that it was the express will of the electorate in 2011 for Parliament to finally function as an effective checks and balance tool in a system of government where corruption and waste are pervasive.  Last year, when the combined opposition cut GPL’s budget, the government, after announcing in 2010 that a reduction would kick in with the advent of the Amaila Falls Hydroelectric Project (AFHEP), retaliated by bringing forward the date of reducing its subsidization of electricity tariffs in Linden.

Most observers agreed the move was politically motivated, because GPL did not and does not supply Linden with electricity, and Bosai pays taxes and royalties to the government, some of which the government uses to subsidize electricity consumption in the community.  Today, observers view GPL’s proposed rate hike the same way, while government wants GPL customers to see the combined opposition as the bad guys that forced the corporation to raise the rates.

What GPL customers need to know is that for the last twenty years, the PPP regime has been making promises to fix GPL and after pumping billions of dollars into it year after year, it still does not function as it should, especially when compared to electricity supply companies in smaller countries with smaller populations in the Caribbean.

So where have all the monies been going for the last two decades? Maybe we will never know because the Chairman of GPL is the same person who heads NICIL, Mr Winston Brassington, and for eight years during the Jagdeo era, NICIL refused or failed to present its audited accounts to Parliament, as required by law. It took the combined opposition to make him finally do the right thing.

Anyway, in May 2010, government  inked a US$39.6M loan from China’s Exim Bank for GPL’s Infrastructural Development Project, and while work here is ongoing, one has to wonder what sort of capital projects require the $5.2B that the combined opposition cut and which the approved $5B cannot cover.

As an aside, China also loaned Guyana US$500M towards the AFHEP (on top of other massive loans) making Guyanese huge debtors to China, and if China becomes the builders, owners and operators (BOOT) of AFHEP to recoup their loan, then the entire nation will be dependent on the Chinese for electricity supply, since the Chinese-owned Bosai already supplies Linden. Can we afford that?
So, why is the combined opposition being blamed for looking out for Guyanese electricity consumers, when the blame rests squarely on the shoulders of the inept government and the equally inept management of GPL?

Editor, no amount of so-called facts and figures being furnished by Prime Minister, Sam Hinds, to justify the rate hikes will ever wash with Guyanese, because even though the PPP regime inherited the power supply problem in 1992, there is no way it should allow the problem to fester for two decades at huge cost to taxpayers and consumers.

In fact, on April 3, 2012, Kaieteur News carried a news story captioned, ‘President Ramotar says GPL rental costs are disturbing, if true.’ It was reported that President Ramotar, who toured GPL’s operations, did not dismiss questions raised about the lack of prudent spending at the utility. “If what they say is true, it is obviously something to be concerned about,” KN reported Ramotar as saying regarding statements by GPL officials that a new Caterpillar generator costs US$900, 000, but the company rented 12 generators in 2011 at a cost of US$720,000 each, when it could have spent just US$2.2M more to buy them all. Is the President still concerned about GPL’s egregiousness or does he think the combined opposition is the real culprit now?

GPL’s Chief Executive Officer (CEO), Bharat Dindyal, along with his Deputy Aeshwar Deonarine, meanwhile, had insisted last year that it was far more beneficial to rent the sets since the state-owned power company would not be burdened by maintenance costs, which are covered by the rental fee.

But then GPL’s Divisional Director of Operations, Mr Elwyn Marshall, reportedly revealed that the generators which are rented are not fit for long-term operations, but are more ideal as a temporary solution.

Now, even if government is adamant that the best alternative to the prohibitive cost is the construction of the AFHEP, this project, which has been under review for an unduly long time, has been mired in so much controversy over financing and feasibility that Guyanese have every right to be duly worried about being forced to jump from the frying pan (GPL) into the fire (AFHEP).

If the government could not fix GPL in 20 years and was forced to subsidize electricity rates by pumping billions into GPL under the guise of ‘capital projects’ (PPP supporters should note that Lindeners are not the only ones whose electricity is being subsidized by government), what guarantee does it have that the AFHEP, with an original price tag of US$450M that meteorically rose to US$840M without a single brick being laid, will be affordable for Guyanese?

When Guyana can have a President like Mr Ramotar, with absolutely no proven executive leadership experience, and he has chosen to surround himself with the same people he inherited from his predecessor who bequeathed a pervasively incompetent government, it easily explains why GPL, like other government entities, is being led by failures like Messrs Brassington and Dindyal.

GPL needs more than a mere probe or audit; it needs to be sold to competent buyers/operators with a better vision than what the PPP has provided.

Yours faithfully,
Emile Mervin

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