Gy$5B not enough – GPL

–mulls load shedding to cushion impact of subsidy cut

By Michael Younge

The Gy$ 5 billion approved by the National Assembly as part of an assistance package for the Guyana Power and Light Inc (GPL) will certainly not be sufficient to help the company this year mitigate the effects of rising fuel prices on its service.

In fact, even the initial Gy$ 6 billion that was budgeted as part of 2012 budget may have not been enough, as fuel prices on the world market have moved from US$ 114 per barrel to US$ 120 per barrel just over the first three months of the year. The company had projected that even if there was a marginal increase, it would need at least Gy$ 25.5 billion to expend on meeting its need for fuel alone as opposed to the sum of Gy$ 22.4 billion which was spent last year.

Speaking with Guyana Times International during an exclusive interview on Monday, GPL Chief Executive Officer Bharat Dindyal explained that between 78 per cent and 81 per cent of the company’s revenue continues to be used to meet its seemingly increasing fuel bill each year.

Dindyal said that the company may be in dire need of the Gy$ 1 billion that was chopped from the subvention initially budgeted sooner than later, if the situation continues along this trend. He opined that the members in the opposition benches did not appear as they had fully understood for what the monies were given to GPL. He explained that there is no merit in the arguments put forward by the A Partnership for National Unity (APNU) and the Alliance For Change (AFC) parliamentarians that the funds were to be used to fund GPL’s loss reduction programme.

He also denied the assertions that government was offering either a “subvention or bail- out” to the GPL. He stressed that the company had the ability to stand on its own feet, especially given the terms and conditions of its licences.

He said “the monies budgeted in the national estimates would be spent largely on fuel alone”. The CEO has also noted the opposition’s call for progress to be made in the area of loss reduction first before government can return with a supplementary for the Gy$ 1 billion, to be used on fuel, stating that there was no link between the two issues.

Dindyal feels as though the APNU and the AFC had taken the position that no progress has been made by the company in reducing its overall line and technical losses. “They are making it seem as though GPL is doing little or nothing on local reduction,” Dindyal said, stating that anyone closely involved to the management of the entity would know differently.

“The fact is that loss reduction is not about talks, it is not about the will to reduce losses; it is about investment,” he stated. In 2001, GPL’s overall loses were pegged at 41 per cent, while last year the figure stood at 31 per cent.

There is an ongoing US$ 42 million project, which is aimed at tackling the issue of loss reduction. As a matter of fact, US$ 5 million has been set aside to tackle technical losses, of which some $ 3.7 million will be used in projects which will lead to its ultimate reduction. Some US$ 250, 000 has already been released.

“We have enough work to undertake… we know where the losses are occurring due to extensive research,” he posited, arguing that international experts say that “they cannot any longer rely on a system that is based on people’s honesty and the police to enforce the law”.

The CEO made it clear that the entity’s licences grants it the opportunity or right to raise tariffs by three per cent once fuel increases occur worldwide. “But government is not supportive of this position… It believes that any attempt to increase tariffs on electricity will result in an equal or even higher levels of losses,” he cried.