Wartsila’s high rate was factor in shift to local power plant management

- Patterson

“Exorbitant” rates and the fact that Guyanese were already in charge were key reasons behind the government’s decision to end its arrangement with Finnish firm Wartsila for the management GPL power plants.

This was disclosed yesterday by Minister of Public Infrastructure (MPI), David Patterson as he delivered the charge to the board of Power Producers & Distributors Inc (PP&DI) which will now be responsible for the  management of the Guyana Power and Light (GPL) installations.

A press release from MPI said that the savings from the switch from Wartsila to PP&DI is expected to be US$2.4m per annum.

Minister of Public Infrastructure, David Patterson (fifth from left), and Minister within the Ministry, Annette Ferguson (seventh from left), with the new board members of the Power Producer & Distributors Inc. From left to right are, Harryram Parmesar; Stephen Fraser; CEO, Arron Fraser; Chairman, Mark Bender; Verlyn Klass; Amanza Walton-Desir; MPI Permanent Secretary, Geoffrey Vaughn; and Secretary, Ronald Burch-Smith.

Tracing the development of PP&DI and the quest for maximizing local capacity, Patterson said that the “exorbitant rates proposed by the multinational for the new operations and maintenance agreement, (which ranged from US$15.54 to US$26.21 per MW) made the decision easier – we estimate a saving of US$3.73 per MW”.

In addition, he said that Wartsila’s local subsidiary was always manned by a 100% Guyanese workforce which continues to demonstrate increased competency in the management of the power plants.

Further, over the last two years, Patterson said that the most challenging of maintenance work – major overhauls – were accomplished by an entirely local team thus eliminating the need for overseas service engineers.

“It is noteworthy, that major overhauls conducted by the entirely local engineers lasted 14-16 days while the last two major overhauls (one which is on-going) which were conducted by the Wartsila experts have both lasted in excess of 30 days. Wartsila was required to complete these overhauls because they fell in their contract period which ended 31st Dec’16”, Patterson stated.

There is also, he said, a structured employees’ education programme in place which was developed by the locals and is specific to the Guyana power plants. This programme has been a main contributory factor to the successes of past, the minister added.

“Without any doubt government is confident that PP&DI can maintain the high standards set by its predecessor – delivering a cost efficient service and matching all key performance indicators (heat rate, availability and lube oil consumption). These key performance indicators will be an integral part of the operations and maintenance agreement between PP&DI and GPL. Additionally, the retention of generated profits will facilitate the investment in people and new equipment as we prepare for future opportunities”, Patterson stated. Concerns were raised locally about the future management of the power plants when the government announced the shift from Wartsila.

Patterson told the members of the board that they  were carefully selected and assembled to oversee the operations of PP&DI because they bring a wealth of diverse but relevant competencies and experiences necessary for its success.

According to the MPI release, the members of the company’s board are: Chairman, Mark Bender; Chief Executive Officer of PP&DI, Arron Fraser; Secretary, Ronald Burch-Smith;  Verlyn Klass; Stephen Fraser; Amanza Walton-Desir; Permanent Secretary of MPI, Geoffrey Vaughn; and Harryram Parmesar. The ninth position has been left for a member of the Parliamentary Opposition, who is yet to be named by the Opposition.

Bender, according to MPI, thanked the ministers on behalf of the board and stated his pleasure in the company having gained the experience of Wartsila. He also said that satisfactory electricity supply is a key component of development and pledged his commitment and dedication to his duty. The installation ceremony was held at MPI.

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