GPL privatisation among Change Guyana plans to ease blackouts

Robert Badal
Robert Badal

The Change Guyana party yesterday detailed plans to reform the Guyana Power and Light Company (GPL), which includes privatising the utility company and transitioning it from fossil fuel use, in order to deliver on a promise to ensure blackouts become a thing of the past for customers.

“Change Guyana will implement phased privatisation of generating assets. Generation of electricity is to be private sector managed and owned and electricity supplied to GPL under a Power Purchase (PPA) arrangement,” Change Guyana presidential candidate Robert Badal told a press conference yesterday as he read from a prepared statement.

He added that all investments in new generation would ensure that it is run on liquefied natural gas (LNG) or gas that is more cost effective and environmentally friendly.

During an interview with the Stabroek News late last month, Badal had said that should he become president of this country one of his first priorities would be to end blackouts.

“The party promises that within a short time… that progressively, we will have less blackouts until it becomes no blackouts…our bulb will always be lighting,” Badal, who served as Chairman of the Board of GPL for a two-year term, said.

“This is because we will put in the investments and ensure that we will reform and change the strategic direction of GPL in a manner that will make it very efficient, very profitable and without blackouts,” he added.

Current GPL Chairman Rawle Lucas told a stakeholders’ forum that from June 1st to August 31st of this year, Guyanese customers experienced power outages an alarming eight times per day on average. During the said period, there were a whopping 772 power outages of varying duration.

Badal has said that the situation will continue if no proper planning is done, even as he emphasised that the situation is further compounded by politics because the utility company is state-owned.

He had pointed to a strategic plan he had compiled while serving as Board Chairman for the overhaul of the power utility and which he submitted to the APNU+AFC government.

That plan, according to him, was shelved and no explanation was given.

Yesterday, he explained details of the making Guyana blackout free plan, while saying that the company has to be able to sustain its own expenditure and not lean on government for subsidies. However, he said under his plan government will assist initially so that the company would be able to borrow.

It is in this vein that he said that his government will ensure the recapitalisation of GPL’s financial structure by taking over all loans and improving the company’s credit rating and borrowing capacity.

When GPL gets its own resources, he said, it will inject that into building a modern Smart Grid to ensure reliability, better management and control of technical and commercial losses. “Instead of loan repayments, government will receive dividends. Divesting 49% of GPL’s ownership to a strategic investor with a proven track record of success in restructuring and managing power companies—this would inject [a] private sector-level of efficiency and productivity resulting in lower cost and reliability and remove reliance on the state for bailouts,” he added.

Change Guyana prime ministerial candidate Nigel Hinds added that addressing technical losses would have to be a priority as they account for some 15% of the total losses of the company.

He explained that there are a number of reasons for the high losses, with collusion between employees of GPL and its customers being a main reason.

“Collusion is one of the major factors. This is between the employees of GPL and customers, who most times are large power consumers. You have accounting errors, unpaid accounts and the bypass of meters. For example, you have a bill come in for $13 million, somebody calls in and they have a discussion with a manager and there is an agreement on a $5 million payment. All of these amount to significant losses,” he posited.

Hinds said that if the 15% percent loss could be reduced to about 5%, then the country would be saving about $560 million annually. “The point is it is a significant area that has to be addressed,” he added.

In order to generate revenue and also build a corporate head office at lands which GPL owns in Sophia, Badal said that he would initiate the selling of GPL’s current prime properties around the city.

He also floated diversifying the energy mix by facilitating private sector investments in solar, wind and hydroelectric projects through power purchasing agreements even as he dismissed going back to the former government’s failed Amaila Falls hydro project. “We believe that there are more viable options given its location, hydrology data and cost,” he said.

Asked about projected cost per kWh under his planned revamping of the utility company, Badal said that he would “have to do the mathematics” but noted that he could not see “a price per kWh being more than 18 cents.”