Hinds refutes PNCR power deal claims
Calls for more constructive approach
March 1, 2003
Prime Minister Sam Hinds yesterday criticised statements by PNCR executive Lance Carberry at a press conference on Thursday saying they offered nothing constructive and could easily jeopardise negotiations underway between the government and AC power, the shareholders in the Guyana Power and Light (GPL).
Refuting a claim by Carberry that the government’s position is that the “Guyanese people should be asked to continue to bear the cost for GPL’s inefficiency and incompetence”, Hinds pointed out that at his February 14 press conference he made it clear that it was the government’s position that “AC Power has failed to meet its obligations under the Operating Standards and Performance Targets in its Management Agreement. It is the government’s position that the present management be replaced and that the investor meet its obligation to find financing sufficient to implement the development and expansion programme and reduce the technical and commercial losses”.
He also denied the PNCR claim that the government refused to share the contents of the agreement with AC Power with the parliamentary opposition. Hinds said that months prior to the GPL contract being entered into his office circulated to every opposition party and the social partners a summary of the proposed transaction covering every aspect of the agreement.
In addition, prior to the signing of the agreement, the government entered the quadripartite process which deliberated on the tariff rates and these agreements have been honoured. Further, Hinds said that the government held numerous press conferences on the matter and a public workshop at the Ocean View Hotel in September 1999, a month before the signing of the contract. The GPL agreement, the statement said, was also tabled in Parliament in November 1999.
Hinds also rebuffed a PNCR claim that AC Power was allowed to defer payment of the US$23.45M purchase price. The PM said the amount was secured up front by a letter of credit for US$14.45M which together with the US$9M invested in GPL as the first direct payment constituted the full purchase price.
The US$14.45M was actually paid over in several tranches and the last, for US$3.45M, is now the subject of arbitration between the two sides as AC Power has refused to hand it over because of a compensation order against it by the Public Utilities Commission.
“If the government, as the PNC (R) claims, sought to renegotiate the agreement with AC Power secretly, the Prime Minister would not have entered into consultations with all of the Social Partners on its intention to review the GPL agreement and would not have specifically identified the issues which are on the table for negotiations. In fact, the PNC (R) declined an invitation from the Prime Minister to be briefed and consulted on the current situation”, Hinds’ statement said.
It added that no company would be willing to invest substantial sums in the electricity sector if faced with a parliamentary imposed freeze on tariffs as had been called for in a PNCR-sponsored motion at a recent sitting of Parliament. “It is an utterly senseless proposal intended only to play to the gallery”, Hinds declared.
His statement appealed to the PNCR to adopt a more constructive approach to the electricity situation. The PM also said that it was precisely because of an almost totally collapsed electricity system handed over to the country by the PNC in 1992 that millions have had to be invested in restoring reliable electricity generation and that the inefficiencies in the distribution system are still to be addressed.