President orders investigation into contaminated GPL fuel

Jan 27, 2009 News

…results from Trinidad expected today

By Gary Eleazar

President Bharrat Jagdeo yesterday announced that he has ordered a full investigation into the affairs at the Guyana Power and Light Company (GPL) as it relates to the contaminated fuel that found its way into an Essequibo power plant, damaging key components.

The President made the disclosure during a press briefing yesterday at the Office of the President, while responding to the fact that the contaminated fuel was only discovered after it had already damaged the equipment.

It is poignant to note that a motion put forward in the National Assembly calling for an investigation into the affairs at the power company was defeated by the Government benches in mid-2008.

The power company, yesterday in a release to the media, stated that it wished to place in context the events at the Anna Regina power station, where the components were damaged.

According to the company, a total of 4,000 barrels of heavy fuel oil was dispatched, in two approximately equal shipments to the location, one on January 9 and the other one January 14.

The company noted that both shipments arrived at the plant contaminated with water and some foreign solid matter, and samples have since been dispatched to Trinidad for testing to ascertain the extent and type of contamination, given that the testing facilities available locally are limited in their capability, such as the fact that they cannot determine sodium content.

The company acknowledged that from January 10 to January 14, extensive power outages were experienced by all consumers on the Essequibo Coast, which was attributed to the contaminated fuel. It was also explained that both engines had suffered some damage, and that repairs were in progress.

The company also confirmed that both shipments of fuel have since been returned to Georgetown and are currently aboard the MT New Horizon.

“We expect by tomorrow to receive the results from Trinidad, which would allow some understanding of what may have happened to cause contamination and, of course, how the fuel can be processed to be retrieved.”

Chairman of the Board of Directors at GPL, Winston Brassington, had told this newspaper that the company would not comment on who would be made to pay for any losses prior to a review of the facts as they relate to the cause and cost of the contaminated fuel.

A senior official at the company, who requested anonymity, also told this newspaper that Brassington was correct in his assessment, given 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 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 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.