Last Updated on Saturday, 26 December 2015, 21:01 by GxMediaDetermined to have the $5.2B budgetary allocation to the Guyana Power and Light (GPL) restored, President Donald Ramotar on Friday ordered a delay in the proposed 26.7 percent tariff hike the power company is planning to implement.
The instruction was given after the Head of State met with the Board and management of the power company for talks earlier in the day amidst concerns about the implications of the subsidy that was denied by way of majority vote by the political opposition.
President Ramotar who made the announcement at the launch of GuyExpo 2013 in the lobby of the Guyana International Conference Centre (GICC) said restoration of the government’s subsidy to the power company must be expeditious.
“We are ready to take it back to parliament tomorrow once we are assured that we will have the support to get it passed so that we can minimise any increase of rates that GPL will be forced to implement,” he was quoted by the state-run Government Information Agency (GINA) as saying.
The opposition Alliance For Change (AFC) and A Partnership for National Unity (APNU), which together used their majority to cut the subsidy to GPL, are demanding better accountability of previous subsidies and effective management of the power company to reduce technical and commercial losses. They want the entire board, its Chairman as well as Chief Executive Officer replaced.
Government has so far not given into any of those demands.
The power company had decried the decision to cut the subsidy, pointing to several projects in the making that have either been incomplete or have not yet commenced as a result.
Among them is the 26-megawatt plant at Vreed-en-Hoop which requires foundation works, equipment lodged in Finland and sub-stations under the Chinese infrastructure development projects.
The subvention also would have advanced the process of frequency conversion which was successfully undertaken at the Wartsila Kingston plant and was planned for about eight other locations.
Chief Executive Officer (CEO) of the power company Bharrat Dindyal who had only Thursday met with the President in the company of the Private Sector Commission (PSC) and the Federation of Independent Trade Unions of Guyana (FITUG), had pointed to the number of locations across the country where the construction of sub-stations are evident, but has reached a standstill.
He had argued that the 26.7 percent tariff hike which he is aware would bring significant impact on consumers is the only alternative to garner the funds needed to complete them and improve efficiency and service quality, and address technical and commercial losses.
The political opposition parties are opposed to the increase and are doubting that the denial of the subvention is the rationale for GPL’s decision.
GPL has submitted its Final Return Certificate (FRC) to the Public Utilities Commission (PUC).
The company is counting on the Amaila Falls Hydropower Project (AFHP) to reduce the costs of generation by half and lessen the impact of fuel costs on increasing tariffs. Experts had concluded that hydropower has potential to reduce the electricity bills by 25 to 40 percent, President Ramotar had recently noted.
At Friday’s launch he assured that once on stream, hydropower would totally eliminate the need for annual subventions to the power company and satisfy the need for cheap and reliable energy to promote efficient production in the processing and manufacturing industries.