Wärtsilä will not be totally gone

Oct 14, 2016 News

…GPL sees role as long term partner

The Guyana Power and Light Inc. (GPL) has confirmed that it will be moving to reduce the role of Finnish-owned Wärtsilä when it comes to electricity generation in the country.

GPL’s Chairman,
Robert Badal

Fielding questions yesterday during a press conference at the Pegasus Hotel, GPL’s Chairman, Robert Badal, assured that it is not the plan for Wärtsilä to be out of the picture completely. Rather, Wärtsilä will remain a long-term partner as a supplier, among other things.
The company, which has been retained to manage and maintain generating sets since the 1990s, has built up a staffing complement of around 100 persons, and from its two engines at Garden of Eden, East Bank Demerara, they now manage over 18 engines across the Demerara and Berbice areas for GPL. However, GPL has been paying hundreds of millions in fees to Wärtsilä annually.
The power company, with a new management and Board since last year, wants to reduce its costs with about a third of its power being lost to technical issues and electricity theft.
On Tuesday, Kaieteur News broke a story that GPL is ending its contract with Wärtsilä.
Yesterday, Badal admitted that the story had caught GPL off-guard, as negotiations are still ongoing.
Wärtsilä, through its subsidiary, Demerara Power Company, is reportedly meeting with staffers next week to update them.
Badal denied that the recent hiring of Canadian-owned Manitoba Hydro International Ltd. (MHI), to assist with its management strengthening, had anything to do with the decision not to renew Wärtsilä contract.
A full disclosure will be announced once all arrangements are in place, he assured.
Regarding concerns that ending relations with Wärtsilä may leave GPL in a precarious state, the Chairman made it clear that the risks are limited. He said that while in the past, there were issues of reliability, Guyana “has come a far way with Wärtsilä as a partner”.
GPL has developed sufficient capacity and training, with improved competence in the generation of power.
Badal stressed that current outages that are facing Guyana are not generation-related issues. Rather, they are a combination of technical issues.

Guyana will discontinue Wärtsilä’s management of its power engines when the current contract ends later this year.

A broken submarine power cable across the Demerara River has left GPL without power from the new plant at Vreed-en-Hoop, leaving the East Demerara and Berbice grids on thin ice.
With Wärtsilä offering services relating to technology transfers, maintenance and consultancy, the official disclosed that GPL sees Wärtsilä as having a continuous presence as a supplier among other things.
A decision to end Wärtsilä’s contract would represent one of the most significant taken for the power sector since the coalition government came to power in May 2015.
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 Wärtsilä engines at the Skeldon factory and there are more at Anna Regina, Essequibo Coast.
Under the arrangements, GPL would provide the fuel for the engines, while Wärtsilä through its local subsidiary, Demerara Power Limited, conducts the maintenance.
It is the proposal that under new arrangements, a company owned jointly by GPL and the Government of Guyana, will be established to manage the Wärtsilä engines.
It is the plan for the new company to take over the staffers of Demerara Power Limited, and for them to continue maintaining the engines, a Government official said earlier this week.
It is likely that the staffers will be rehired under the same conditions that Wärtsilä enjoys.
GPL is facing major challenges to keep up with a growing demand for power, especially on the coastland.
Wärtsilä is described as a global leader in advanced technologies and complete lifecycle solutions for the marine and energy markets.