Continued subsidy for Linden electricity is due to non-fulfillment of 2012 deal

- chairman says

The continued subsidization of electricity tariffs in Linden is a result of the non-realization of the terms of the 2012 agreement, says Region 10 Chairman Sharma Solomon.

Currently, Linden residents pay $5 per kWh while the rest of Guyana pays $64 per kWh. In 2012, government announced plans to gradually phase out the subsidy which would have eventually seen Lindeners paying the same rates for electricity as the rest of the country.

Residents argued that they could not afford to pay the increased tariffs and took to the streets to protest the decision. Demonstrations soon turned violent after police intervention agitated protestors and three protesters were fatally shot.

To bring an end to the ensuing instability, government struck an agreement with the Region 10 Regional Democratic Council (RDC) which required the establishment of a Technical Committee, an Economic Committee, and a Land Selection Committee.

The mandate of the Technical Committee was to review Linden’s electricity tariffs and develop an energy plan. Until the committee completes its work, government agreed to continue subsidizing electricity tariffs in Linden.

In his budget presentation last week, Finance Minister Dr Ashni Singh said: “No progress having been made on the matter of adjusting electricity tariffs in Linden, Budget 2014 allocates sums totaling $3.2 billion to meet the costs of maintaining the electricity subsidy in Linden and Kwakwani so that 10,500 electricity customers in Region 10 can continue to benefit from the rates that are highly subsidized.”

Asked if he appreciated the provision of the subsidy, Solomon told Stabroek News that the issue was not the appreciation of the subsidy but the realization of the state of the people and the honouring of their constitutional rights. He said the issue is not that the people of Linden are unwilling to pay increased rates, instead, he argued, they cannot afford to pay higher electricity tariffs.

Solomon said that the Technical Committee was established to work towards an electricity tariff plan acceptable to both sides. Furthermore, the Economic Committee was supposed to review Linden’s economy and make recommendations on how to stimulate development. At the moment, neither committee has a chairperson and cannot therefore function. The selection of new chairs will depend on the two sides’ ability to agree on nominees.

Sharma acknowledged that government has maintained the subsidy, but lamented the non-functioning of the committee which are supposed to engineer development plans.

While there is no movement at the level of the committees though, Solomon says that the region continues to seek out plans to develop both economic and energy plans. He told Stabroek News that while government seems uncommitted to fulfilling all the provisions of the 2012 agreement, the RDC is compelled by the constitution to push forward in an effort to cater to the needs of the region’s populace.

On March 18, Stabroek News quoted Solomon as saying, “Central government reluctance to activate the Economic Committee has communicated to the Region the matter of economic development for the constituency is not one of priority. Hence the region shall commence work to develop its Economic Plan…”

With regard to the Technical Committee and the work it was supposed to undertake, he said “the region has already in its possession a Plan of Action for Electricity Conservation and is prepared to look at an alternative supply.” Moreover, Solomon said that the region has heard proposals pertaining to energy.

He revealed that during a trip to China early last year, the management of Chinese bauxite company Bosai advanced a proposal for the construction of a 50-megawatt Coal Hydro Thermal Plant which reportedly would have been able to produce power at a third of the current cost. Solomon said the region indicated that it would support the project as long as its execution adhered to environmental and other considerations. He said that Bosai’s chairman indicated that the project could be completed in 18 months.

However, it was government which would have been responsible for facilitating the agreement, and Solomon says he does not believe the matter is still being considered.

The chairman also spoke of meetings with domestic and foreign investors as the region seeks to bring power to the region. He specifically welcomed comments by A Partnership for National Unity (APNU) which he says has committed to participating in the region’s development.


Doors still open


Solomon emphasized that the decision to move ahead with the development of technical and economic plans does not mean that the region has disengaged itself from discussions with government.  During the interview, he iterated that the region remains committed to dialogue with government as well as all other stakeholders interested in contributing to the development of Region 10.

In fact, Solomon highlighted, it was the region which sought to engage government in discussions on the matter of the announced phasing out of the electricity subsidy months before Lindeners began their protests in April 2012.

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