A MANAGEMENT CONTRACT IS NEEDED

Oct 13, 2016 Features / Columnists, Peeping Tom

Electricity is too important for experimentation. The country should not be tinkering with the management of its electricity sector. If something is working why change it?
For twenty years, the relationship between the government and Wärtsilä, a private company which rescued Guyana from its power woes in the early 1990s, had led to stability in the electricity sector.
Essentially, Wärtsilä power units supply power to the local grid and, under a contract with the Guyana government, they maintained these units.
A short while ago, the APNU+AFC government did a most extraordinary thing. It signed a billion-dollar consultancy contract with a foreign company to advise it on a management structure for Guyana Power & Light (GPL).
The signing of that arrangement was criticised in this column because of the fact that GPL already has a model management arrangement. It has an arrangement with Wärtsilä which has worked for more than twenty years in Guyana.
Why change it now? And why change it even before the report of the billion-dollar consultation has been issued. Why not wait on the report of the consultants before committing to a decision on Wärtsilä?
This is how the government is operating. It recently charged a man and placed him before the court, but instead of awaiting the imminent decision of the court, it has gone ahead and placed the man before a tribunal.
It is the same thing with the Wärtsilä contract. The government has signed an agreement which will result in it receiving advice on the best model to manage GPL. But instead of waiting on that advice, it has gone ahead and decided that it will end its management contract with Wärtsilä.
Perhaps, the GPL feels that the monies that it pays to Wärtsilä can be put to better use by the corporation. If this is the case, GPL needs a lesson in history.
State ownership is likely to worsen the situation in the energy sector. Everything that the PNC nationalised went bust. It took a solid bauxite industry and within ten years that industry was broke.
The PNC ran into problems with sugar in the early 1980s. It then, under Desmond Hoyte, brought in Booker Tate to manage the industry. It paid that entity a huge management fee.
The industry began to turn around, but just before the European Union slashed the price for sugar paid to Guyana, the PPPC decided, also, that it would be best to end the relationship with Booker Tate. The result is that the sugar industry is now losing billions of dollars each year.
The electricity sector from all indications is facing a crisis, even though fuel prices have dropped significantly and the corporation should be making a profit. This is not the time for the government to be tinkering with management contracts with GPL.
Blackouts are increasing. The younger generation is now getting a taste of what it is like to live under blackouts. The dreaded load-shedding schedule is appearing in the newspapers.
We are told that there is a problem with a submarine cable, but that this is going to be fixed by November. Well, if the GPL is taking so long to fix a cable, how will it do when it has to assume the management of the Wärtsilä units which supply critical power to the national grid?
If something is working why tinker with it? Perhaps instead of targeting Wärtsilä, the government should advertise for a management contract for the Cabinet, because it certainly is not working as people expected.

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