GPL anticipates downward employment as modernisation takes effect

Mar 02, 2013 News

With continuous moves being made towards the modernisation of its distribution network, the Guyana Power and Light Company Inc. (GPL) is likely to embrace a move to downgrade its staff.
This comment was made by Chairman of the power company, Winston Brassington, during a press conference on Thursday at the entity’s Duke Street, Kingston, Georgetown, Executive Secretariat.
Brassington’s remark came even as the company faced a second day of industrial action engaged by employees represented by the National Association of Agricultural, Commercial and Industrial Employees (NAACIE).
GPL has refused to pay an eight per cent union-demanded across the board increase to workers on the basis that it is losing money and therefore cannot afford what it calls an “unreasonable” request.
The power company has instead offered the union a five per cent all inclusive pay hike which has been rejected. According to Brassington, in order to pay even the five per cent GPL will either have to increase tariffs or seek a subsidy from Government. The latter approach has reportedly been embraced by Government.
As he considered the company’s financial state the GPL Chairman noted that a move towards retrenchment is always available to the company depending on the circumstances that it faces.
However, he said that such action is not immediately on the cards. “We have not done anything in recent years; not for the last two years, and nothing is immediately planned but the option is always available,” he insisted.
Even as he pointed to the fact that modernisation would not require as many people in generation, Brassington noted that GPL is modernising and investing in new transmission systems and new sub-stations.
The sub-stations themselves would require more people but, according to Brassington, “We are consolidating our generation in fewer locations where the remaining plants such as Versailles and Onverwagt would more or less (provide) back-up.”
He noted, too, that “as we have a more modernised interconnected network between Berbice and Demerara with modern lines and as we have new investments in generation most of which is being operated by Wartsila we don’t need as many people in generation.”
Brassington said that a brand new customer information system was installed a few years ago with a view to integrating a number of disparate functions thereby allowing for easier operation.
With this development in place “we need to review the structure as we modernise,” said Brassington in light of the entity’s cash-strapped state.

Escalating
fuel prices
With a wage bill in the billions, which sees the 700=odd NAACIE represented workers alone claiming a massive chunk which amounts to about $1.5 billion, GPL’s financial state is compounded by a constantly mounting fuel cost, Brassington said.
Last year, the company consumed 83 per cent of its revenue which translated to $24 billion in fuel.
GPL has expressed publicly that the continued high oil prices have caused the company to suffer significant financial losses, which amount to almost $5 billion last year. Losses are projected to continue this year even as endeavours are made to make major improvements in the quality of service offered to customers.
According to GPL officials it is common knowledge that the electricity industry is amongst the most capital intensive in the world, requiring billions of dollars of investments in generation, transmission and distribution assets among others.
As a result “high oil prices continue to beleaguer the company, depleting cash resources to the extent that the company has to resort to government for significant subsidies in order to sustain operations.”
In order to finance major investments over the past few years the company was forced to borrow huge sums all of which must be repaid with interest, Brassington revealed. Monies borrowed over the span of six years (2007 – 2012) include just over $10 billion in Government subsidies and $21 billion in loans.

Expected impact
of Amaila
Although the 165 megawatts Amaila Falls Hydropower project is not expected to come on stream until 2017 it is believed that it will provide power reliability to meet Guyana’s future needs. With this facility in place, Guyana will be able to generate its own power from a clean and natural source.
It is anticipated that over time, the hydropower will lower average wholesale energy costs. According to Brassington, the Amaila project is designed to provide power mostly as it relates to generation.
Currently most of the country’s electricity generation is done by Wartsila, and Brassington said that in the last four or five years “we have gone from 44 megawatts of Wartsila in Demerara to 80 megawatts. By later this year we will be at 106 megawatts with the Vreed-en-Hoop plant. All of this is being operated by Wartsila.”
“More and more of our generation is being done by Wartsila in addition to that we have got GuySuCo, which is operated by GuySuCo Skeldon on an IPP.”
Brassington said that hydro will largely replace the capacity that is basically being supplied by Wartsila and Skeldon. However, he noted that there will be limitations with the hydro facility because when it comes on stream Essequibo will not be immediately connected; as such it will continue to be isolated.
“The hydro itself will not create a lot of changes there but between now and next year you will see the converting of the system from 50 to 60 hertz. We are connecting the 69kV line from Berbice to Demerara so we will have one interconnected system and that’s the transmission network,” Brassington added.
Even as the plans move earnestly ahead to modernise the distribution network, the GPL Chairman reminded that the direction of employment will trend downward over time but it will certainly not be immediate.