GPL loses Gy$ 1B, GECOM Gy$ 527M, as opposition trims budget

By Pushpa Balgobin

The opposition on Wednesday banded together to reduce budgetary allocations for the Guyana Power and Light Company (GPL) by Gy$ 1 billion and also cut the Gy$ 2 billion allocated for the Guyana Elections Commission (GECOM) by Gy$ 527 million when the House continued consideration of this year’s budget.

Alliance For Change (AFC) Chairman Khemraj Ramjattan had proposed amendments which called for cuts in excess of Gy$ 527 million from GECOM’s allocation – Gy$ 27 million for meals and refreshments and Gy$ 500 million for a line item categorised as other.

Prime Minister Samuel Hinds stated that this year, local government elections would be undertaken, and as a result, the budget had allocated Gy$ 902 million to facilitate the electoral process among other entities. “With the new system I think we have NDCs being subdivided and so on… they have estimated what would be required in terms of temporary employees, to be paid here, to be trained, to be retained,” Hinds noted that of the Gy$ 902 million, approximately Gy$ 422 million was to be allocated for the salary of an estimated 1400 temporary employee work force.

Additionally, over Gy$ 300 million was allocated for the payment of stipends and allowances, “so most of this money is going to pay for staff… training for I think for four months,” Hinds stated.

Ramjattan asked the prime minister to state when local government elections would be held, even as opposition Members of Parliament (MPs) argued that these elections have been promised for numerous years, and while the estimates are valid, no solid dates have been announced.

Ramjattan moved on to the refreshments line item, and asked if it was a yearly allocation or if it would be used just for the elections process. Hinds noted that it was indeed budgeted for only training and on Election Day, which is yet to be determined. The opposition was not swayed by the Hinds, nor his attempts to justify the need for the additional Gy$ 527 million of current expenditures.

“We feel that at the appropriate time when all the legislation will be constituted under the regime in which the election will be held… the AFC will have absolutely no problem in relation to a supplementary appropriation of funds to be given to plan and execute local government elections,” Ramjattan said.

Both opposition parties voted in favour of the amendment, and it was decided that the local government elections would need to be financed from the remaining Gy$ 428.5 million. The remainder of the proposed cuts to GECOM such as the Gy$ 115 million from contract employees, and Gy$ 78 million from two other line items were not discussed.

Regarding GPL, the proposed Gy$ 6 billion subsidy to facilitate what Hinds referred to as bill payments was also shot down by the opposition. The AFC objected to the subsidy on the grounds that it is being seen as a bailout without any checks or balances.

Hinds stated that GPL currently has a fuel bill of Gy$ 25.53 billion, and contended that the bill is “a matter of grave concern to us; this bill has been rising rapidly”. He stressed that the Gy$ 6 billion will act as a “cushioning” for the rising bill, noting that he was aware of studies and reports which outlined the numerous commercial losses that have plagued GPL in the past, and in the present.

“The subsidies to GPL are subsidies to the consumers to cushion the tariff increases that would be required.” Hinds explained the way the subsidies keep the price per kilowatts low, and noted that GPL was in need of this subsidy. “We find this proposal to cut the tariff ill advised,” he stated, pointing out that the billion dollar subsidy was necessary to keep electricity cost low.

Once again, the prime minister urged the opposition to reconsider their position.

Speaking on the amendment, Ramjattan said that the opposition would like to “reduce the subsidy from Gy$ 6 billion to Gy$ 5 billion”. He continued that GPL needs to produce a proper plan which should outline improvements in the reduction of its fuel bill. Ramjattan stated that the AFC is aware that GPL is in need of government’s assistance, but he warned against a repeat of years gone past in which GPL received subsidies without clauses.

“We do not believe in asking consumers to pay more for electricity,” Moses Nagamootoo, who also spoke on the motion said, stating that the opposition agreed that GPL is in need of assistance.”We are not oblivious of the problems as well as the challenges facing GPL.” However, he said that Guyana is looking at a growing GPL, and it is not fully feasible that the government should continue to provide bailouts.

“Whether or not you give the Gy$ 6 billion now, there is no guarantee or certainty that GPL will not come back for an additional bail out and or repose a tariff increase on the consumers,” Nagamootoo stated.

He questioned the credibility of GPL and charged that the company needed to step up and become a reliable source of electricity to ensure that the electrical needs will not be of concern for consumers. Nagamootoo claimed too that the billion dollar cut will not stifle the needs of the company, but will make it more accountable.