GPL says city defaulted on credit arrangement
Mayor says power company owes taxes
Stabroek News
November 28, 2006

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The Guyana Power and Light Incorporated (GPL) says the Mayor and City Council defaulted on the terms of its credit arrangement causing the power supply to many of its buildings to be shut off.

In a statement issued yesterday the company noted that the council's recent arrangement with it was made in 2005.

"Promises were made and a cheque for a small amount of money was paid to GPL in October and soon after the commercial bank was ordered by the municipality to stop payment," the statement said.

GPL stated too that it made other efforts to contact "certain officials" at the council and these attempts failed. At this point, GPL said it was left with no choice but to begin disconnecting the facilities operating under the purview of the council and this started with the less essential buildings.

The company further justified its position and noted that disconnection or notice of disconnection is the only option available to it to encourage customers from every category - residential, business or service - to pay for electricity they have already consumed.

The company pointed too to its financial position and cited its status as an autonomous agency which forces it to generate its own revenue and capital in order for it to continue to generate and distribute electrical power to pay its creditors and to meet daily overheads particularly to purchase vital raw material and fuel. However the company stated that its management remains open for discussion with the Mayor and City Council.

Meanwhile, in a statement issued on Sunday night, Mayor Hamilton Green stated that GPL was refusing to treat with the individual city installations and has indicated that it would only reconnect on the basis of a settlement, which includes all of the installations including the drainage pumps, the markets, the day care centres and street lighting.

He lamented that the recent action by the power company seemed to be part of a centrally directed plan to humiliate the Mayor and Council. "If not it is crassness, injustice and unprincipled behaviour by GPL," the mayor said in the statement.

The mayor charged too that the power company owes the municipality arrears in taxes to the tune of $214M and added that the municipality levies taxes according to the law and practice on properties irrespective of change of ownership.

Green, in the statement charged that the company, with the apparent concurrence of others is sheltering behind the contention that it is not responsible for the indebtedness of the predecessor company, the Guyana Electricity Corporation (GEC). In this vein, the statement continued, "existing legal regulations require that all taxes owing to the municipality be satisfactorily settled before the transfer of any property in the city is effectuated to the new owner. We were never officially informed that GEC had transferred its plant and properties to the Guyana Power and Light." The mayor said he hoped that GPL would apologize for what he termed, "this brutal action". Top officials of the council were yesterday locked in a statutory meeting and this newspaper was told that high on the agenda was devising ways and means to address the council's financial position and how it would proceed with dealing with this issue.

Meanwhile, Prime Minister Samuel Hinds, who is also the minister responsible for the power sector, told Stabroek News in response to a query as to whether government was considering intervening in the matter that "GPL is a separate company that has to earn its way and government is constrained in what type of support it can give".

"Every customer needs to pay for the electricity they consume and the company is already working hard to reduce its commercial losses," he said

Hinds added that while he is the minister responsible for the power sector, he is not responsible for running the company.

"GPL has its management and a board of directors and they make their decisions and they understand that they have to manage their own way," he added.

On Friday last Green at a press conference announced that GPL had disconnected power to City Hall and other areas connected to City Hall because of the non-payment of over $200M and said he felt that the problem stemmed from the narrow revenue base available to the city and the mismanagement of funds by the city administration. He also shared the view that the crisis may adversely affect citizens and workers and revealed too that City Hall was forced to run on a generator for a few hours. According to the Mayor, on November 21, the supply of electricity was cut off from the City Hall Complex, the Bourda Constabulary Out-post, the Constabulary Training Complex, the Municipal Abattoir and the South Road Day Care Centre. "We just don't have enough money and the stubborn administration has failed to manage the little funds that we have effectively," the mayor was quoted as saying. Moreover, the situation has created much dislocation and considerable inconvenience. There has not been any proper inspection and the slaughtering of meat cannot be done efficiently. "In the case of the abattoir, it presents to the city and its environs the potential for a serious health problem", said Green. (Heppilena Ferguson)