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GPL rental will be examined – APNU
The country’s power company, Guyana Power and Light Inc. (GPL), is
APNU’s Representatives: From left - Lance Carberry, Ronald Bulkan and Desmond Trotman.
expected to come under Parliamentary scrutiny, when the 2012 National Budget debate kicks off this week. The issue is the company paying millions of dollars to rent several Caterpillar sets.
According to Lance Carberry, spokesperson for the Opposition’s A Partnership for National Unity (APNU), the coalition has been keeping a close watch on the state-owned corporation.
“…Every aspect of GPL is under scrutiny. You will find that as we come to next week’s debate…of the Estimates those issues will be dealt with.”
The official was speaking during the party’s weekly press conference at the office of the Leader of the Opposition, Hadfield Street, last Thursday.
The rental of the Caterpillar generators had come up recently when it was disclosed that GPL were renting several, reportedly paying more than $1.6B
Three of six Caterpillar sets that were shipped in last June to meet demands.
(US$8M) last year alone when it could have spend US$2.2M ($440M) to buy them.
On Thursday, APNU’s Ronald Bulkan said that the party was of the view that corruption and management were factors involved in the decision to rent the generators which government said represented the only short term answer to meet growing demands for electricity.
“It highlights and brings to the fore clearly what is…that mismanagement, manipulation and no doubt corruption that is persistent and pervasive in the (GPL) operations,” Bulkan said.
He pointed out that it is little wonder that the budget has an allocation of $6B to prop up its failure.
“…And clearly these are matters of serious and urgent national interest but the example serves to illustrate what it is we are dealing with…it clearly says to the citizens that management is clearly out of control and (GPL is) not acting in the public interest.”
During a mandatory review of its 2011 performance by the regulatory body, Public
The public forum late last month during which GPL‘s management testified of their 2011 targets before the regulatory body, PUC, at Tower Hotel.
Utilities Commission (PUC), late last month, GPL under questioning disclosed that it forked over hundreds of millions to rent the Caterpillar sets, raising eyebrows.
The company said that renting the generators was the only feasible option, as opposed to buying them.
Kaieteur News understands that on average, GPL was paying MACORP around US$60,000 monthly to rent the sets.
Each of the generating sets is actually rented for a base rental of US$43,000 every month, whether they are used or not. If they are used, that base rental only caters for 200 hours of work. Anything over the 200 hours automatically bumps up the rental to US$60,000, monthly. GPL sources confirmed that GPL worked the generators to the maximum; therefore what it has been paying is the full US$60,000 rental, per month.
This means that rental cost for the 12 generators amounted to some US$720,000 for each month last year.
The makers of the sets are retailing one for US$900,000 (G$180M), according to GPL officials. This means, it would cost only US$180,000 above the rental price.
GPL has said that it decided to rent against purchasing, because it did not have up-front capital at hand to go ahead and purchase the Caterpillar sets.
GPL’s Chief Executive Officer (CEO), Bharat Dindyal, along with his Deputy Aeshwar Deonarine, in replying to questions, insisted that it is far more beneficial to rent the sets since the state-owned power company is not burdened by maintenance costs and maintenance fees are covered by the rental fee.
Further, Elwyn Marshall, Divisional Director (Operations) said that the generators which are rented are not suited for long-term operations, and are more ideal for a temporary solution.
This is despite the fact that in June last year GPL said that it had 22 of the same Caterpillar sets in the system.
Six Caterpillar sets brought in last June are still in the system at Versailles and Leonora, West Demerara and at Garden of Eden, East Bank Demerara, among other places.
Government is moving ahead with plans to build a 165-megawatt hydro-electric project at Amaila Falls, Region Eight, to meet growing demands.
GPL has said that electricity demand has been growing at least 10 per cent annually, outstripping investments and power production which until recently countrywide, topped over 80 megawatts.
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