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2016 performance of public enterprises fall below projections
The revenue collections of the public enterprises in 2016 fell below the 2017 budget projections by $3B. The Ministry of Finance attributed this performance to a shortfall in production of sugar and a lower sales collection rate by the Guyana Power and Light Company Limited (GPL).
GPL has rescheduled its capital programme for 2017.
According to the Ministry, the Guyana Sugar Corporation (GuySuCo) experienced severe cash flow problems and GPL has moved to reschedule its capital programme for 2017.
The Finance Ministry also said that the combined operations of the public enterprises resulted in a surplus of $11.1B which is a $3.1B higher than was projected at the time of the 2017 budget presentation last December by Finance Minister, Winston Jordan in the National Assembly.
Based on information provided by the Ministry, during the first half of 2016, GPL customers had benefited from a 10 percent net reduction in electricity rates with effect from March 1, 2015 as a result of a five percent reduction in the tariff rates and a further five percent on top of the 10 percent final rebate which was given in April 2015.
During the first half of last year GuyOil spent $12.8B to earn receipts of $16.1B thereby realising an improved primary balance of $3.2B when compared to the first half of 2015.
In his speech, he had said that the public enterprises are projected to record a deficit of $12.1B in 2017, reflecting lower receipts, increasing expenditure, and a re-classification of government transfers to GuySuCo.
Jordan said that the sugar company and GPL are projected to record deficits of $8.4B and $5B, respectively. He said that this will be somewhat offset by a projected surplus of $3B for the Guyana Oil Company Limited (GuyOil).
During his presentation, Jordan said that receipts are expected to fall by about 1.3 percent to $119.8B and expenditures are expected to grow by 16.4 percent to $131.9B largely due to a 30.7 percent increase in spending on goods and services.
He said that the increase in this category is largely due to higher anticipated fuel expenditures for both GuyOil and GPL, based on the projected increase in the price of petroleum in 2017.
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