GPL talks aimed at trying to avert crisis
-- Luncheon
By Chamanlall Naipaul
Guyana Chronicle
February 14, 2003

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`The Government is locked in discussions with the main players in GPL to avert a crisis' - Dr. Roger Luncheon, Head of the Presidential Secretariat

THE Government is engaging the American and Caribbean Power (AC Power) firm in discussions aimed at resolving the difficulties facing the local power company, Guyana Power and Light Company (GPL), and trying to avert a crisis, Head of the Presidential Secretariat, Dr. Roger Luncheon said yesterday.

He told his weekly post-Cabinet press briefing that the performance of GPL for this year so far has been a financial failure, and forecasts based on the present performance indicate that the situation for the rest of the year would not be better.

He indicated that because of the dire state in which the power company finds itself, the Government is locked in discussions on the way forward in a bid to prevent a crisis.

Luncheon said that because of the continued poor financial performance of GPL and a decline in rate collection, the company may not be able to meet its operational costs, the most important of which is its fuel costs.

The Office of the Prime Minister as mandated, is continuing a series of meetings with Guyanese organisations updating them on the evolving situation pertaining to the supply of electricity, he said. He added that Prime Minister Sam Hinds has undertaken to inform Guyanese of the dire state of the power company, and ultimately all consumers of electricity.

"The actual performance of the firm (GPL) this year has so far clearly pointed to its impending failure to finance the provision of reliable power supplies to consumers. The Government is locked in discussions with the main players in GPL to avert a crisis," Dr. Luncheon told reporters.

He said the emphasis during the current discussions will be on proposals put forward by both sides (the Government and AC Power), and the Administration is asking that AC Power must accept that GPL management has failed to meet the financial targets and has been unable to garner financing to meet its obligations, and as such the electricity situation has deteriorated.

The Government is also contending that the management should be replaced if its submissions are accepted, Luncheon noted.

"The Government, the one shareholder and AC Power, the other shareholder, have not come to an agreement, but the discussions have centred most importantly on the way forward. Other aspects of the discussions have dealt with who is responsible, what were the causes and what are the causes for the current situation.

"But the emphasis has been on proposals put forward by both sides to chart a way forward to maintain regular electricity supplies to consumers in Guyana - maintain the viability of GPL," he reported.

Responding to a question on the development of alternative sources of power generation, Luncheon said that while this is being pursued, it will not impact on the immediacy the present situation demands, adding that alternative power sources such as hydro-power will take many years to come to fruition.

Earlier, the Government had issued a statement strongly opposing a decision by GPL to implement hikes in tariff rates for the supply of electricity.

The Office of the President said the GPL management has failed and should be removed and that the tariff increases are not justified as consumers are being punished for management's incompetence.

It further stated that the consequence of management's failure has led to increased tariffs, which is a source of much concern and frustration to consumers. It observed that the Government, among others, has repeatedly pointed out the weaknesses of management.

Electricity bills were set to be higher from February 1 this year, but the move by the power company came under heavy fire from businessmen and other sections of society, resulting in an injunction being brought before the court to prevent the implementation of the tariffs.

GPL submitted to the Public Utilities Commission (PUC) prescribed information showing that energy (kwh) rates will be increased by between 13.9% for residential consumers and 16.6% for commercial users from February 1, compared to rates billed in December last year.

According to the Chief Executive Officer of GPL, Mr. John Lynn: "While no one likes to see a tariff increase, we wish to note that that the increases are needed to permit GPL to meet expenditures essential to the maintenance and improvement of electricity supply to our customers."

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