Inefficiency and waste…GPL forks out millions to truck fuel across Harbour Bridge

Feb 08, 2015 News

– to new US$34M Vreed-en-Hoop power plant

Hours before one of Guyana’s most modern power plants is to be commissioned on West Bank Demerara, startling details are emerging of the waste, delays and mismanagement that has left consumers and taxpayers alike saddled with significant cost overruns.

CEO, Bharrat Dindyal, and Chairman, Winston Brassington

One of the major problems for the delayed, multi-billion-dollar plant is the massive trucking of fuel to the Vreed-en-Hoop facility across the Demerara River which is expected to continue for a while until fuel lines, to a nearby new wharf built specifically for this purpose, are operational.
Those millions in additional costs will now have to be borne by consumers who are already complaining about the power situation and rates. They will question how the state-owned company is spending money.
Because of the delays in construction, almost 20 trucks of fuel have to be transported across the aging Demerara Harbour Bridge daily. To make matters worse, because of weight restrictions of the bridge, the trucks are forced to take only about quarter of their capacity at a time.
At the Vreed-en-Hoop facility, the traffic from the tankers has been exasperating, making the daily congestion even more pronounced in that busy area. The plant is demanding up to 1,000 barrels of fuel daily.
This is a situation that should never have existed as it was the plan all time to bring fuel from ships to a new wharf that is being built right at Vreed-en-Hoop, on the western bank of the Demerara, not far from the plant. It was the intention that ships would moor alongside the new wharf and via pipelines, fuel will be pumped to the tankers in the compound of the new power plant. This was intended to solve the problem of trucking.

Fuel truck at Harbour Bridge; and another at the power plant, Vreed-en-Hoop.

The $242M wharf, constructed by BK International, is finally completed but the pipelines are still to be operational. Kaieteur News was told that GPL was forced to hire contractors, paying millions of dollars to have trucks take fuel from its Kingston location to Vreed-en-Hoop.
The plant, which has three new Wartsila engines that have the capacity to supply 26 megawatts of power to the grid, has been operational for weeks now. Kaieteur News was told it may be few months before the pipelines are put to use.
GPL has gone ahead, and in the newspapers, advertised for truckers to tender for transporting fuel, presumably for the Vreed-en-Hoop wharf. Millions of dollars are being spent for the current contract to truckers.
According to persons close to the project, the situation is the closest thing to a scandal since GPL is always publicly complaining of attempting to bring down its costs.
“Here we have a simple project where money is being spent like there is no tomorrow. Who is responsible for this?”
Late last year, the entire area was flooded.

An aerial shot of the new power plant at Vreed-en-Hoop, WBD, in August last year.

Costs have been skyrocketing also. In January last year, Prime Minister Sam Hinds and GPL’s CEO, Bharat Dindyal, said that additional costs would have run about US$8M ($1.6B). It is expected that the entire project may go beyond US$36M.
Two large storage tanks are in place with capacity of 25,000 barrels of fuel which could run the plant for 30 days.
It was the plan for the company to be refueling every ten days. Obviously, this is not a possibility at the moment.
The contract with Wartsila, a Finnish company which has been in Guyana since the 90s, was for US$26M, which reportedly included the engines and power plant. Government, however, was responsible for building the wharf and pipelines and the foundation for the plant.
Engineers discovered shortly after work on the foundation started that that they will need hundreds more piles to ensure stability of the plant.
This was because of the unstable soil conditions. This led to more delays and criticisms as to the analysis of the area done originally.
Because of the delays in the foundation, several components of the power plant were reportedly left at the wharves of one of the major shipping companies, forcing GPL to fork out over US$60,000 each month for storage.
The project should have been completed about two years ago. The three 8.6 megawatt engines will be the largest of the lot currently being operated by GPL countrywide.
Tomorrow, President Donald Ramotar is expected to visit the new facility to commission it.
Government says the Vreed-en-Hoop project will be the last major investment in generating capacity before the US$850M Amaila Falls Hydro Electric project comes on stream.
GPL recently also spent US$40M to lay new transmission lines and built seven new sub-stations along the coastland. It is spending another US$60M to change old transformers, train staffers and introducing new metering technology.