Latest update April 4th, 2025 12:14 AM
$4B approved to pay off GPL debts
Kaieteur News – The allocation of funds, sought by the People’s Progressive Party Civic (PPP/C) in the National Assembly was progressing smoothly on Monday, until the Minister within the Ministry of Public Works, Deodat Indar interrupted to question a $4 billion sum to the Guyana Power and Light (GPL) Inc.
In the Financial Paper circulated in the House, it could only be understood that the allocation was to service the electricity arrears to the power company. The funds were being requested by the Ministry of Finance.
To this end, Indar asked that an explanation be given as to why the money is needed to pay arrears. Responding to the Minister’s query was his colleague, the Minister with responsibility for Finance, Dr. Ashni Singh.
Singh explained that the money was required to pay off the debts that were inherited from the former A Partnership for National Unity + Alliance For Change (APNU+AFC) administration. In fact, he said what the PPP became heir to was a “dire financial situation.”
The Minister said, “We inherited a state of affairs in a number of the entities in the public sector and in particular amongst the several State-owned enterprises which reflected very dire financial circumstances. Indeed sir, a number of these agencies were found effectively to be bankrupt. The Guyana Power and Light Inc., to give one example, had accumulated, only from its public sector entities, receivables in excess of $12 billion.” This figure, he explained, represents the sum of money that was owed to GPL that was not being paid.
Minister with responsibility for Finance, Dr. Ashni Singh responds to a query from his colleague Minister on the $4 billion provision for GPL
Dr. Singh noted that the $12 billion debt resulted in a “tremendous liquidity and cash flow crisis at the company.”
He went on to note, “This was a cascading problem because amongst the entities that owed the GPL were in turn a number of other agencies who were in similar states of financial distress.”
For example, the Guyana Water Inc., he said, owed the power company in excess of $9 billion and was incapable of servicing that debt. Another agency that accumulated debt to GPL was the Guyana Forestry Commission (GFC).
In offering another explanation for the additional funds, the Finance Minister noted that the price for fuel has increased on the global market, moving from US$40 per barrel to about US$100 per barrel today. He reminded that government promised to offset these charges, hence the need for additional cash flow to the utility firm.
The Opposition Members of Parliament (MPs) were not present to scrutinise the $44,794,011,175 in total supplementary funding that was being sought from the House. The Opposition decided to boycott the Sitting over the suspension of eight of its MPs. In an article published in Monday’s edition of this publication, the Opposition’s Chief Whip, Christopher Jones highlighted that this specific provision was questionable.
He noted that, “some of the provisions that they are asking for, there is the Standing Orders that state the only time you can come with a supplementary document is when the matters that you are requesting the money [for] would have had to be unforeseen. In one of them, they got $4 billion for electricity arrears.”
In light of this, Jones enquired, “How is it that a Ministry doesn’t know that at the end of every month, they got to pay electricity and every year in the Budget, there is an allocation for electricity charges. So how is it that they coming for electricity charges and arrears, so therefore where is the money that we allocated year after year for the Ministry of Finance to pay GPL?”
Particularly interesting the Opposition MP said was that none of the supplemental funding will go towards addressing the cost of living crisis burdening every Guyanese. He argued that nothing is being done to subsidise the cost of electricity or reduce the cost of basic food items, even as public servants continue to be ignored an increase of salary.
It was only on February 10 of this year, the largest Budget – $552.9 billion – ever presented to the National Assembly was passed.
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