Govt withdraws GPL subventions

– Linden to get over Gy$1B in subsidies

The future of the Guyana Power and Light (GPL) Incorporated is still unclear especially with the most recent setback of no provision of any subventions in Government’s 2015 Budget estimates.

A senior official at GPL told Guyana Times International on Wednesday that this move by the A Partnership for National Unity/Alliance For Change (APNU/AFC) Administration was not one the company expected.

He stated that GPL will now have to adjust its 2015 budget so as to not reflect any capital works and that any capital works to be done will have to “come from GPL’s savings”.

“Obviously we will have to get advice as to what to do now and prepare a five-year development plan of some sort. There will be need for many discussions based on how we at GPL will now fund our capital projects. We will basically have to determine where the funds will be obtained from,” the GPL employee noted.

On Monday, Finance Minister Winston Jordan in his Budget speech made no mention of the utility company receiving any subvention, despite the fact that GPL had received billions in past years.

In 2014, under the People’s Progressive Party/Civic (PPP/C), Government had budgeted for a Gy$3.8 billion subvention for the State-owned company.

In 2013, a sum of Gy$10.2 billion was budgeted for the power and light company; however, only Gy$5.2 billion of that amount was approved in the National Assembly by the majority Opposition at that time.

According to former Prime Minister Samuel Hinds, over Gy$40 billion has been spent in subventions for GPL since 2003.

This was as a result of the consortium comprising the Electricity Supply Board International (ESBI) of Ireland and the Commonwealth Development Corporation (CDC) of the United Kingdom pulling out of the 50/50 equity deal with the Guyana Government.

However, in spite of GPL not receiving any subventions in the 2015 national budget, other power companies in the country are being provided for.

The LinMine Electricity Company is listed for a Gy$1 billion subvention even though the previous Government argued that it cannot continue to subsidise the rates at Linden as there was much wastage of electricity and an unwillingness on the part of some residents to pay more feasible rates.

Attempts by the then PPP/C Government to implement a phased increase  of the tariffs led to unrest after APNU and the AFC while in opposition instigated protests within the mining town.

The Moruca Power and Light was awarded a $Gy10 million subvention, and the Mahdia Power and Light is slated for Gy$15 million.

Meanwhile, the Port Kaituma Power and Light and the Matthews Ridge Power Company are both budgeted for Gy$10 million subventions each, coming under the Office of the Prime Minister, while under the Public Infrastructure Ministry Gy$15 million will be allocated for the Port Kaituma Power and Light.

Under the Infrastructure Ministry, the Lethem Power Company will receive a Gy$35 million subvention while under the Prime Minister’s Office, it is slated for Gy$70 million in subvention.

Also under the Infrastructure Ministry, the Kwakwani Utilities Inc is slated for a Gy$99 million subvention and the Hinterland Electrification Company Inc is listed for Gy$31 million in subvention.

It was reported that Public Infrastructure Minister David Patterson has posited that GPL will be able to and can sustain all of its operations using its own revenue.

The Minister explained that this is made possible because of the decreasing costs of fuel on the international market which would result in lower production costs for the power company.

Minister Patterson was quoted as saying “It (GPL) doesn’t require any subsidies; it is sound enough to fund itself”.