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Govt. to end pact with Wartsila
…special state-owned company to take over maintenance, staffing
After more than two decades managing some of the country’s biggest power plants, it appears that Wartsila’s contract will not be renewed.
The decision by the administration would be one of the most significant taken for the power sector since the coalition government came to power last year May.
Guyana will discontinue Wartsila’s management of its power engines when the current contract ends later this year.
According to sources within the Guyana Power and Light Inc. (GPL) and Government, the decision not to renew the Wartsila contract has strictly to do with a holistic plan to cut costs for the state-owned entity.
The Finnish company came here in the early 1990s when Guyana was struggling with widespread power outages because of a number of aging engines.
It established the first Government-owned plant at Garden of Eden, East Bank Demerara and since then, the country has installed at least 18 engines in the Demerara area.
The Guyana Sugar Corporation (GuySuCo) also has Wartsila engines at the Skeldon factory and there are more at Anna Regina, Essequibo coast.
According to a senior Government official, Wartsila has the contract to manage those 18 engines which all belong to GPL.
Under the arrangements, GPL would provide the fuel for the engines while Wartsila through its local subsidiary, Demerara Power Limited, conducts the maintenance.
Demerara Power has around 100 staff members currently.
It is being paid hundreds of millions of dollars annually to maintain and manage the Wartsila engines.
Under new arrangements, a company owned jointly by GPL and the Government of Guyana, will be established to manage the Wartsila engines.
It is the plan for the new company to take over the staffers of Demerara Power and for them to continue maintaining the engines, the Government official said.
It is likely that the staffers will be rehired under the same conditions that Wartsila enjoys.
GPL is facing major challenges to keep up with a growing demand for power especially on the coastlands.
With some of the Wartsila engines almost 20 years old, a new 26-megawatts power plant at Vreed-en-Hoop, West Bank Demerara, commissioned last year, was expected to allow GPL some leg room with the extra megawatts.
However, a critical submarine fibre optic cable across the Demerara River has been damaged leaving an interlinked East Demerara and Berbice grid without the extra power.
The cable is not expected to be operational until next month, leaving both Demerara and Berbice consumers facing increased outages in recent times.
GPL itself has been examining a number of initiatives to bring down its costs.
One of the areas GPL is tightening up on is electricity theft; another is commercial losses. Almost a third of the power produced is lost to both.
Last year, GPL commissioned new high-powered transmission lines on the coastlands along with seven sub-stations and submarine fibre optic cables across the Demerara and Berbice River.
A new contract that will see low and medium voltage power lines along the coastlands alongside smart meters capable of allowing GPL to narrow specific losses to a specific area, is expected to be awarded shortly.
Wärtsilä is described as a global leader in advanced technologies and complete lifecycle solutions for the marine and energy markets.
In 2015, Wärtsilä’s net sales totalled EUR 5 billion with approximately 18,800 employees. The company has operations in over 200 locations in more than 70 countries around the world.
It specialises in building ship engines.
Guyana is said to be one of its biggest customers for power plants in the region.
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