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$400M saved in a year: A good decision to switch from Wartsila – PPDI Chief
The Wartsila engines at Kingston Plant.
More than a year ago, a major decision was taken to end the more than two decades of management of several of the state’s power engines on the coastlands by Finnish-owned Wartsila.
Under the agreement then, Wartsila employed more than 90 staffers who were Guyanese, to manage the engines.
Under the arrangements then, the Guyana Power and Light Inc. (GPL) would provide fuel and pay Wartsila to maintain the engines.
However, the administration, in a cost-cutting mode, decided to form a new company, owned by the people of Guyana. It was believed that Guyana would save some monies.
That company, Power Producer and Distribution Incorporated (PPDI), took over the staffers, working with the Guyana Power and Light Incorporated (GPL) to deliver electricity.
Wartsila was reportedly retained more as a consultant in the new arrangements.
PPDI was doing what Wartsila’s staffers did before…maintaining the engines.
On Thursday, at the year-end review of the Ministry of Public Infrastructure’s performance, under which PPDI falls, Chief Executive Officer, Arron Fraser, was convinced that it was a good decision a year ago.
And there are reasons for this. According to Fraser, the PPDI charges GPL a fixed rate of US$16.87 per megawatt of electricity as compared to Wärtsila’s proposed US$20.51 for 2017.
This has saved the utility company approximately US$2.1M for this year.
Asked pointedly whether the decision to take over management of the engines was a good one, Fraser answered in the affirmative.
Over the past year, PPDI has generated approximately 596,000 megawatts of electricity for this year, while GPL has been responsible for its distribution.
For the past 11 months, the company has been operating and maintaining four power plants- Garden of Eden, Kingston, New Kingston (- Extension) and Vreed-en-Hoop- over 106 megawatts.
Fraser noted that for the past 11 months, the state-owned company has been making strides in the electricity sector, while at the same time augmenting Guyana’s workforce.
“We have been able to complete all the major engine overhauls- there were 10. Performance guarantees given to the customer will be met, except lube oil consumption at Kingston Plant…All new-hires were successfully integrated into our team and are pursuing the internally and context-specific technical qualification programme.
“Also, approval of the Procurement Manual was granted by the NPTAB and there were zero industrial accidents.”
The CEO outlined some of the plans for 2018 including 10 planned major overhauls; rehabilitation of plant auxiliary equipment; cross-plant training with regional utilities utilising clean technology and joint training initiatives with the Hinterland Electrification Company Inc. (HECI); implementation of ISO 9,000 (for continuous development) and the launch of a website in the first quarter of 2018.
However, it has not been smooth sailing.
PPDI, in addition to being under pressure by GPL to ensure the engines are running, compliments of an impatient public, is still wetting its feet in procuring spares and other supplies- a job that Wartsila had been handling for Guyana.This meant that the company has been establishing links with suppliers.
Another major challenge was the staffers transitioning from a private company arrangement to being under the state, which is governed by strict procurement laws.
The role of the PPDI would be seen as a critical one with electricity demand and a stable supply being major challenges for consecutive administrations.
With aging generators and a high dependence on imported fuel, GPL has been struggling in especially the distribution and transmission aspect.
A number of programmes including smart meters, new transmission lines and transformers are under way to address these.
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