Jagdeo shrugs off concerns over chequered past of powership company

Nov 22, 2024 News

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—says what is important is that ship is here, adding power to grid

Kaieteur News- Vice President Bharrat Jagdeo has shrugged off concerns raised over the chequered past of the company Karpowership, from whom government is renting two electricity producing vessels, saying that the only thing that needs to be known is that the ship is here, and supplying power to the grid at a certain cost per kilowatt hour (kwh).

The vice president’s comments come against concerns raised by the Working People’s Alliance regarding the company’s track record and demanded the government release the dule diligence report done on the company before the contract was awarded to it. However, in brushing aside the WPA’s concerns, Jagdeo said: “we made it clear even if a ton of info drops on their (WPA) head they wouldn’t be able to use it so let me be clear what the cost per kilowatt hour is and what it entails. We said that the capital cost on the operation and management for the powership in Berbice is 7.6 cents per kwh. The one here which is now 80-90 MW but we are only buying 76 MW, so they have extra capacity, it’s 9.5 cents per kwh.”

He stressed that all that needed to be known is that, “the ship is there and it’s supplying x amount of power at a particular price per kwh. You let the WPA compare that with prices around the world or the cost of generation here for the same unit because we are…I explained this last week I don’t know if they listen, that even now our cost for generating 1kwh of electricity is about 18 US cents and that is because we are operating with equipment that’s fully amortised, fully amortised.”

The VP explained that in this case a capital repayment cost need not be added which allows the price to be 18 cents per kwh. The fuel cost per kwh is 13 cents and this has to be added to the capital cost and operation and management which will give the overall cost to produce 1kwh.

“So in Berbice case it’s 7.6 cents plus the 13 cents per kwh fuel that takes you to 20.6 cents per kwh. In this case (the 2^nd ship) it’s 9.5 cents per kwh from the new powership to come and 13 cents it will take you to about 22 cents, just over 22 cents per kwh. We are selling at 22 cents per kwh of course you have to add in the subsidy that we are giving because when you look at transmission and distribution loss it costs us more and that’s where the government subsidies come in,” Jagdeo explained.

On November 21^st this publication reported that Turkish company Karpowership- that has secured two lucrative contracts from the PPP/C Government appears to have had a troubled past littered with corruption allegations and court cases that have resulted in at least one contract being rescinded.

Citing research on the powership company, the WPA questioned whether the government conducted a due diligence check on the company before signing the second agreement between the Guyana Power and Light Company (GPL) and UCC Holdings for the second powership.

At the party’s weekly press conference held on Monday, Co-Leader Dr. David Hinds said that “The project involves two separate contracts under which UCC Holding leases a powership from Karpowership to provide energy to Guyana Power and Light Incorporated, supplying 27% of Guyana’s total electricity demand. Karpowership provides UCC Holding with leasing, operation, and maintenance with an initial capacity of 36 MW for two years.”

Dr. Hinds said that the party’s research revealed that the company has been involved in several controversies in countries it was awarded contracts. The party, “presumes the Government would have prudently done a due diligence on Karpowership to safeguard the public interests. The contrast between the firm’s website view of itself and the torrent of corrupt practices levelled against it is stupendous.”

Adding to the discourse renowned economist and WPA executive member Dr. Clive Thomas highlighted the stark contrast between the company’s self-representation on its website and the numerous allegations of corrupt practices directed against it. He noted that while Karpowership promotes itself as a leader in delivering energy solutions, the troubling accusations paint a far less favourable picture. Professor Thomas said that the company’s reputation is known and “every country knows that is the case and what people normally do is to get a due diligence done into the operation of the companies that you are going to deal with, pay for it and there are many consultants around the world who prepare these and sell the data to the government and on that basis the government can make a decision.” He said that it is highly unlikely that the Government of Guyana is unaware of the troubles Karpowership has had.

(Jagdeo shrugs off concerns over chequered past of powership company)

(Jagdeo shrugs off concerns)

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• chequered, CONCERNS, Jagdeo, kwh, past, powership

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