Ramotar explains Govt. inability to maintain $2.2B Linden subsidy

Aug 14, 2012 News

The Linden electricity tariff issue is one that has to date claimed three lives, seen dozens injured, critical infrastructure razed, and stagnation of a section of the local economy, with no immediate end in sight.
Head of State Donald Ramotar this past weekend appeared on State television where he sought to explain that it is a case where Central Government can no longer bear to fund the subsidy handed each year to the community, to be used for electricity generation.
The 2011 Budget, as is the case with previous expenditure listings for the country, documents an average of $2.2B in subsidy for Linden’s power generation, a figure that Lindeners are now being asked to pay as a result of the withdrawal of the subsidy.
According to Guyana’s most recent and authenticated, ‘Population & Housing Census,’ compiled and produced by the Statistical Bureau, Region10 serves as home to 41,112 persons, with an upward trend over the years.
The Region is said to also record a high unemployment rate, with some figures reportedly as high as 70 per cent. This has been strongly denied by the administration.
Ramotar during his televised interview sought to explain the Government’s position on the Linden Electricity issue, and reminded that it is something that has been on the agenda for quite some time now.

Burnham on Linden Electricity Rate
He sought to emphasize that this was the position even before the ruling People’s Progressive Party Civic (PPP/C) took office in 1992, pointing to Prime Minister Samuel Hinds’ reference during the recent Budget Debates to an earlier intimation by then Head of State, Forbes Burnham.
According to Ramotar, even Burnham spoke of a necessity to merge Linden’s electricity rates with the rest of Guyana.
The political opposition has for years argued that Burnham’s position was being taken out of context and misrepresented.
According to the opposition , Linden, at the time of the Burnham’s suggestion, was producing electricity far cheaper than that of the national grid, and his intention was to have this dissipated by having Linden supply the grid with cheaper electricity.
Ramotar, in his explanation on Saturday last, said that “electricity in Linden has a history when we used to produce alumina and they had excess heat so they could have given cheap electricity”.
He said that when Burnham made his speech on the matter, “it was at a time when the alumina plant was closing down and he saw the need to merge the electricity rates”.
Ramotar asserted that it was clear that Burnham was looking to close the alumina plant.
According to the Head of State, when the PPP took office in 1992, the Government was carrying the expense of a lot of social services for the community. He made reference to the arrangements between the Bauxite Company and its workers, where electricity and health services, among others, would have been offered as a package.
“When we got in Government you will recall the whole country was in a serious state and the Bauxite Company was in a bad situation.”
He explained that in order to effectively source investments to resuscitate the industry, Government assumed responsibility for electricity and two hospitals “so that we would make it more attractive to invest in the company.”
Ramotar pointed out that the Government took quite some time in locating an investor, which was eventually done, and “the industry is now again very, very viable because of the investment we have gotten there.”
According to the President, all the while that Government had been looking for investments to resuscitate the bauxite industry in the region, the electricity rate was largely being funded by Government and it kept rising “by great proportions.”
Ramotar says that over the years, Linden has been expanding rapidly with the housing community “getting bigger and bigger and more and more additions taken on.”
The Head of State also addressed the fact that as a result of the low electricity rate paid traditionally in the mining community, there was no incentive for conservation.
This, he emphasised, has lead to the consumption rate being three times higher than that of the reminder of the country.
Ramotar says that it is pellucid that in order to secure Linden’s supply of Electricity “there is a need for conservation and the subsidy was becoming unsustainable and therefore it was decided that efforts be made to gradually phase out the electricity rate to not have a big impact on the community.”

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Ramotar explains Govt. inability to maintain $2.2B Linden subsidy

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