Wartsila technicians coming for Berbice set maintenance by Chamanlall Naipaul
Guyana Chronicle
October 30, 2003

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Long overdue maintenance of Guyana Power and Light Incorporated (GPL) generating sets, particularly in the Berbice grid, has resulted in prolonged power failures.

At a press conference at GTV Studios yesterday, Chairman of the Board of Directors, Ronald Ali said: "When we took over in May, our fixed generating plant in the Berbice System, as well as the majority of our mobile generators supporting this system, were long overdue for maintenance. Repeated breakdowns have resulted in an unreliable supply of power causing great inconvenience to Berbice consumers."

In order to facilitate maintenance of generating sets in Berbice, four mobile Caterpillar sets would be on lease at a cost of US$35,000 per set per month, and are expected to leave Miami tomorrow, arriving here in another about 10-12 days, Ali disclosed.

He explained that the Berbice System currently requires the generation of 15 megawatts at peak demand, but is only generating about 10 megawatts and must continue to rely on mobile high-speed Caterpillar generators, which are generally unsuitable for this type of operation to sustain even this level of power.

It is estimated that maintenance work would last a period of four months, following which some seven megawatts of fixed plant and 11 megawatts of mobile plant would have been restored, providing a total of 18 megawatts. Technical teams from Wartsila and the firm Stuart & Stephenson are to arrive shortly to carry out maintenance.

Initially, to compensate for the shortfall in power generation bids were invited from Independent Power Producers (IIPPS) to supply five megawatts of power, however, Ali pointed out that all the bids proved too expensive.

Ali contended that despite inheriting several adverse conditions facing GPL, including insufficient generating capacity, a dangerously deferred maintenance programme, an unfunded expansion programme increasing commercial and line losses and high tariffs among others, the new management has made some significant achievements. These include a largely stabilized power supply in thedemerara Interconnected System (DIS), stabilised rates, commencement of a plant maintenance programme, progress on meter replacement and theft prevention, significantly improved payment collection and the repayment of part of operational debt liabilities.

However, Ali said the company continues to function at a critically unstable level and will do so until it is able to install reserve generating capacity in all of its systems, construct transmission facilities to interconnect its Demerara and Berbice Systems, rehabilitate its entire distribution system and complete the reduction of commercial losses to an acceptable level.

In the meantime, a five-year business plan to meet the challenge has been formulated and is being studied by the Government, Ali disclosed, adding that: "Since it is unlikely that we will be able to secure capital investment on concessionary terms, the Plan relies on investments from IPPS and on the company's internally generated revenue to finance its recovery and to do so without minimum tariff increases."

As regards line losses by the company, Chief Executive Officer, Rabindranauth Singh explained that in order to curb it significant levels of investment are needed which the company cannot afford at this time, however he noted that in a recent exercise carried out by the company it was found that over 18,000 meters have been found to be reading zero consumption while a further 6,000 meters have been found to be malfunctioning. He explained that the company is to soon embark on a customer validation exercise in a move to rectify this situation.

He also informed the media that discussions with a Dutch wind power company and Synergy Holdings, the latter developing a hydropower facility at Amaila Falls, are ongoing as possible independent suppliers of power to GPL.

Dealing with the issue of wrongfully disconnecting consumers as a result of bills paid through the Post Offices, Ali said that arrangements are now in place to have the data transferred on a daily basis in Georgetown and about two or three days from outlying areas. He pointed out that only about 0.5% of persons disconnected fall into this category, but conceded that should not be an excuse for wrongful disconnections.

Touching on the matter of GPL's disconnection crews being attacked by members of the public while carrying out their job, Ali said this matter is presently being addressed by the management and discussions are ongoing with the Guyana Police Force in relation to the provision of security for both employees of GPL and persons contracted by the company.

Asked about if there are any imminent increases in tariffs, he replied in the negative, barring any dramatic increases in fuel. He added that the recent increases in fuel prices have been cushioned by the company reducing its basic charges thus preventing any tariff increases.

On the question of the $60M rebate to consumers ordered by the Public Utilities Commission (PUC) earlier this year, Singh said that GPL would begin repaying consumers as of next month at a rate of $2.20 per kilowatt-hour.

The American and Caribbean Power Company (AC Power) at the end of March this year took a decision to give up its shares in the troubled power company, the Guyana Power and Light Company (GPL), paving the way for the government to become the sole owner of the entity.

Under the agreed terms between the two sides, the Government has acquired the equity interest in GPL for US$1 and an agreement to release its claim on the final payment of US$3.45M, and will assume control of the company from April 30 this year, after which the sub-contracted managers the Electricity Supply Board of Ireland (ESBI) will leave.

Prime Minister Sam Hinds who has responsibility for the energy sector, said the government had entered into negotiations with AC Power to restructure GPL, replacing the management and refinancing the company's operations, since August last year, as a result of its concern since 2001 over the failure of the management to deliver on its obligations to provide an efficient and economical service in accordance with operating standards and performance targets.

In particular, was the government's concern of the inability of AC Power to reduce technical and commercial losses which were passed on to consumers.

On March 28 this year Government and AC power, signed a preliminary understanding of the fundamental terms for AC Power to transfer its shares in and management responsibility for GPL to the Government bringing to end the shareholders agreement between Government and AC Power which established GPL.

He said the challenge to return GPL to an efficient and viable operation is a formidable one, noting that it will take substantial capital investment and time and about another five years to refurbish the distribution and transmission systems thereby reducing the technical losses to an acceptable level.

The Prime Minister had noted that the task is not one only for the Government, but will require the commitment and ingenuity of the public and private sectors, the trade unions, the consumers associations and the entire country. Consequently, meetings with the Trade Unions Congress (TUC), Consumers Associations and the Private Sector Commission (PSC) are being held to request them to share in the challenge and give their support, he added.