GPL refuses to comment on who will pay for loss

Jan 26, 2009 News

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Senior official insists that fuel could be salvaged

The only comment that Winston Brassington, Chairman of the Board of Directors of the Guyana Power and Light company (GPL), would make prior to a review of the facts as they relate to the cause and cost of the discovery of water in a supply of fuel sent to Essequibo was that Kaieteur News’s article was speculative, given that the company was unaware of the specific loss.

When asked if GPL will bear the cost of any losses or whether BK International will have to pay for losses in the event that the company is held culpable, Brassington declined to comment, pointing to the fact that an answer now, in the absence of any definitive answers, would be speculative.
A senior official at the company, who requested anonymity, told this newspaper that Brassington was correct in his assessment of the figure lost, in that there are ways and means of salvaging the fuel, in that the water could be removed.
Hence, a determination of the exact loss could be made only after an accurate analysis of how much water is present in the fuel, and what could be done to extract as much as possible.
The official did confirm that fuel was removed from the company’s depot in Georgetown and taken to Essequibo, where it subsequently damaged some components of the operations there.
BK International, the company that transported the fuel for GPL, had swiftly stated that it was too early to lay the blame on anyone for the delivery of some $40M worth of contaminated fuel to the Essequibo Coast.
According to the company, it has been agreed that a series of tests would be conducted on the fuel to ascertain the facts, and as a result, BK International and Guyana Power and Light have sent samples of the fuel to Trinidad and Tobago for comprehensive testing.
“It is therefore premature to speculate on these matters in the absence of results. Suffice it to say that the precise amount of fuel uplifted from GPL was delivered, and at all times GPL security was aboard the vessel, securing the product….It is also clear that any possible contamination could have been in the fuel at the time it was uplifted, because no tests were done at the time the product was uplifted,”   BK International had stated.
The company added that the fuel supplies were also handled by a third party in Essequibo, who uplifted the fuel from the vessel for onward delivery to the plant at Anna Regina. “Samples from GPL’s tank and our vessel were sent to Macorp for testing, and both samples were confirmed to be from the same stock.”
“We are sending samples to the UG laboratory for further testing, to confirm the percentage of the water in the fuel whilst we are awaiting the results from the samples sent to Trinidad and Tobago.”
As it relates to claims that BK’s vessel, the MT New Horizons, had been deemed unfit by the Trinidad authorities and was not certified to operate in those waters, the company said that the vessel is fully certified by the Guyana Maritime Bureau Inc., Surveyor of Ships appointed by the Government of Guyana for carriage of fuel, and it has been so doing to many countries in the Caribbean, South America and Trinidad for many years, and was never rejected by Trinidad.
The company insists that it is convinced that, based upon the pre-loading exercises conducted by BK and GPL, and the security precautions involved, it can in no way be held responsible for the so-called contamination, particularly in the absence of definitive tests and a completed investigation into all the circumstances surrounding the issues.
This newspaper had reported that GPL sustained some $40M in losses, over the past two weeks, when it tried to ship fuel to the Anna Regina power station.
The first shipment of fuel, some 75,000 gallons of heavy fuel oil, was shipped to the Essequibo Coast via a vessel operated by BK International.
However, it turned out that the fuel was contaminated but the operators were not aware until they tried to use it in the turbines.
Nearly three dozen injectors and pump elements were damaged, plunging the Coast into periods of prolonged blackouts. By the time the problem was discovered, the damage had already been done, according to a GPL official on the Essequibo Coast.
The repairs were costly and took more than a week. One engineer said that each pump element cost some US$1,000. The injectors also cost a tidy sum. By the time the turbine became operational, GPL was forced to have expended some $8 million.
A source said that the remainder of the fuel had to be returned to the city and disposed of. The cost of that shipment of fuel was some $20 million.
The power company undertook to ship a replacement of 75,000 gallons of heavy fuel oil to the Essequibo Coast; but when the vessel landed, it was found that that shipment was also contaminated. Inspection revealed that it had some six per cent of sea water. The loss was a further $20 million.
The vessel was once more returned to the city with the contaminated fuel; and up to this week, it was moored at a city wharf with the fuel inside. The power company was reportedly hard pressed to find a suitable place to dispose of the fuel.
The original contract to transport the fuel was entered into with one Winston Rambarran, but BK International secured the contract after a tender process for the shipment of the fuel.
GPL offered no reason for seeking to terminate the arrangement it had with Rambarran.

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