GPL is a liability to the people

Apr 21, 2013 AFC Column, Features / Columnists

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During the consideration of the Estimates, the allocation requested by the Government for the Guyana Power & Light Inc. (GPL) was reduced from $10.2 billion to $5 billion. It must be noted that allocations in the Estimates are amounts being requested by the Government. These are then put to the National Assembly. If sufficient and credible information is provided by the Government, the allocations are approved without question.
In many instances, the Opposition would approve, without question, allocations for areas where it is recognised there exists a need such as for social services. In instances where sufficient information is not provided, the Opposition would then question the Government, usually the Minister responsible for the sector, on why the need for the allocation.
During the recent examination of the Estimates, as the allocation for GPL came under scrutiny, Prime Minister Samuel Hinds sought to get support from the Opposition by explaining that the Government subsidises the high cost of electricity which would otherwise pass on to the consumer.
What was lacking was an explanation that would clearly outline how the Government intends to minimise GPL’s line loss.
Consumers are being led to believe, by the outrageous propaganda on NCN and Government radio, that the reduction of the allocation will be the cause of increased tariffs or blackouts, or should we say, more blackouts.
The fact of the matter is that over 30% of electricity generated by GPL is lost along its transmission system and the ineptitude of the Board to come up with ideas how to reduce commercial losses. So for example, let us say GPL generates 300KW of power, over 100KW will never reach the consumers. Yet GPL, though it would have by its incompetence caused a loss of 100KW, ensures that it recovers the cost for generating 300KW of power.
Consumers are therefore being forced to pay for electricity they never receive, never consumed. Almost one third of your GPL Bill is payment for power you never received. This is robbery by the State!
Last year, the National Assembly withheld approval for $1 billion to GPL, but this amount was subsequently released and the company received the full allocation requested. One would have expected that some of this money would have been used to improve the efficiency of the transmission and commercial systems. Obviously, nothing much, if anything, was done in these areas.
What we see happening, is that the power company is focusing more on its billing system than its transmission system. The emphasis is on collecting money but little attention is being placed on providing an efficient service.
GPL, like so many other public corporations, is on the brink of financial disaster. Instead of progress, GPL is a liability to the people.
In his presentation during the recent budget debates, AFC Member of Parliament Moses Nagamootoo noted, “The couple over the road from my Chambers selling water coconut, who travels every week from Charity to Georgetown, makes a profit. The young lady over the road who sells sweets and drinks off an old fridge, makes a profit. But the multi-billion giant monopoly that sells electricity to all the people of Guyana, is broke! Guy-broke!
The PPP government guaranteed GPL loans amounting to $23 Billion for equipment and infrastructural works. This is throwing water on duck’s back! GPL is a huge black hole of inefficiency, mismanagement, waste and squandermania!”, and he added, “The PPP comes here [in the National Assembly] and threatens us that if we do not pay up, consumers have to pay a huge hike in electricity tariff. This is shotgun economic blackmail, and banditry!
In an article in the Stabroek News on May 27, 2012 Chartered Accountant Chris Ram in addressing the state of GPL noted, “The company maintains perhaps the highest paid set of top management in any company in Guyana – an average of ten million dollars per annum for 29 employees – including arguably the highest paid CEO in the country.”
Ram went on to point out that the company saw profits of $1.8 billion in 2009 and $553 million in 2010. And nine months after reporting the cash hoard, taxpayers in 2011 were forking out $1.5 billion for GPL. We now know that in 2012, a further $6 billion of taxpayers’ money was forked out for the power company.
In 2013, the Opposition approved a further $6 billion for GPL. Government wanted $11.5 billion!
Why should our people throw all this money behind GPL when the government cannot give straight answers for what it has done with these billions? The AFC in keeping with its policy on accountability will withhold finance for incompetence and inefficiency.

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