Rental of electricity supply ships a bad investment – AFC’s Patterson

Last Updated on Friday, 8 November 2024, 19:58 by Writer

Former electricity minister, David Patterson on Friday assailed the People’s Progressive Party Civic (PPPC) administration for wasting US$426 million on renting two electricity supply ships over the next two years instead of buying new generators for the state-owned Guyana Power and Light (GPL), Inc.

He reminded that A Partnership for National Unity+Alliance For Change (APNU+AFC) administration had purchased 46 megawatts (MW) of brand new generation in 2019 for more than US$40 million in contrast to rental of the power ships. “We’ll be paying these companies for two years a total of US$426 for rented equipment,” he said. Instead, he said Guyana could have purchased 180 megawatts (MW) of heavy fuel oil-fired generators for the same amount of money.

“Cumulatively, the summary of the cost that we will be paying – Guyana will be paying because of the poor decision-making of the PPP because they had zero plans for our power sector, just for the rental of these two ships is per day GY$126 million; per year GY$46 billion and for the two years, that will be GY$94 billion,” he said.

Mr Patterson said GPL still has to pay US$0.05 per kilowatt hour (kWh) for administrative cost, transmission cost of US$0.01 per kWh and 30 percent commercial and technical line loss of US$0.05 per kWh, bringing the total dispatch fees to US$0.11 per kWh.

Mr Patterson said the decision by the Irfaan Ali-led administration smacked of incompetence in managing the electricity sector, a day after Vice President Bharrat Jagdeo said government had clinched a second deal with the Turkish power-ship provider, Karpowership, to provide an additional 60 MW to the Demerara-Berbice Interconnected System (DBIS). Karpowership is already supplying 36 MW under a similar agreement inked earlier this year. Under the latest agreement, Mr Jagdeo said Karpowership would supply GPL with electricity at $0.095 per kWh down from $0.1117 after negotiations, but the overall cost would be US$0.22-US$0.23 per kWh when the fuel price of US$0.13 per kWh is added.

Mr Patterson said when GPL’s administrative cost is added, the electricity would be acquired at US$0.32 per kWh.

The former electricity sector minister under APNU+AFC, however, said the drain on Guyana’s treasury could have been avoided if government had planned properly and invested wisely in new generators. By Mr Patterson’s calculation, the rental of the first power-ship is being rented at GY$13.5 million per day and the second one would be GY$35.3 million per day or a total of almost GY$49 million per day. Over the two years, he said Guyana would be paying Karpowership GY$35.6 billion. Fuel costs for both ships, he said, would amount to GY$53 billion over the two years. Fuel transportation cost will be GY$1.5 billion annually.