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GPL rents US$900,000 generator for US$720,000 annually
The Guyana Power and Light Inc. (GPL) last year paid a hefty US$8.6M to
GPL’s CEO, Bharat Dindyal, and other officials during a hearing with utilities regulator, Public Utilities Commission last week.
rent 12 Caterpillar generating sets for a period of one year. It could have spent just US$2.2M more to buy them all.
Last week, the company said that renting the generators was the only feasible option, as opposed to buying them.
The revelations were made when top GPL officials appeared before its regulator, the Public Utilities Commission (PUC).
It was during this public hearing, held at Tower Hotel, that GPL officials were pressed into disclosing the rental costs. GPL rents the sets from Machinery Corporation of Guyana Limited (MACORP).
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.
In any given month, GPL loses a few days of work from the generators, to facilitate “top-up maintenance.”
Further, the generators are subjected to scheduled general maintenance every two months. With the “top up maintenance” and the “scheduled maintenance” time it means that every two months GPL does not benefit from the usage of each of the generators for about one week. However, it still has to pay the full rental cost.
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.
Four of the six Caterpillar generator sets at the John Fernandes Limited wharf in June, 2010.
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; maintenance fees are covered by the rental fee.
Further, Elwyn Marshall, Divisional Director (Operations) said that the generators which are rented are not fit 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 demands has been growing at least 10 per cent annually, outstripping investments and power production which until recently countrywide was over 80 megawatts.
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