Dear Editor,
Reference is made to a letter published in the February 16, 2017, edition of the Stabroek News, under the headline “Patterson statements on electricity were misleading” and penned by Mr. Juan Edghill, Opposition M.P. Reference is also made to an article published in Feb. 16, Kaieteur News under the headline “Opposition warns of US$4M scam with company that replaced Wartsila”, which used the erroneous comments made in the aforementioned letter by Mr. Edghill as its foundation.
On behalf of the Government of Guyana, I wish to strongly denounce and deem erroneous the statements made by Mr. Edghill on Wartsila’s operations in Guyana.
According to Mr. Edghill, he was informed by the former Chairman of the Guyana Power and Light Inc. Board, Mr. Winston Brassington, and former CEO, Mr. Bharrat Dindyal, that the contract between the Government of Guyana and Wartsila was to the tune of approximately US$7.5M per year, or about US$20,500 per day. He further intimated that the new contract with the Power Producer and Distribution Inc. (PPDI) made less financial sense than that that of Wartsila’s.
However, the figures stated by Mr. Edghill are grossly inaccurate. Below is an accurate breakdown of the amounts paid to Wartsila from 2008 to 2016:
Year Contract sum (USD)
2008 $6.2M
2009 $6.8M
2010 $6.7M
2011 $7.8M
2012 $7.8M
2013 $8.5M
2014 $9.5M
2015 $9.6M
2016 $10M
Furthermore, it must be noted that, going forward, Wartsila was proposing an average cost of US$20.51 per megawatt hour. This would have equated to approximately US$13.3M per annum, based upon a consumption of 650,000 megawatts per year. Compare this figure to the proposed fee of US$16.78 megawatts per hour from PPDI. This would equate to savings of US$2.4M, based on the same consumption rate for an enhanced service.
With savings of this magnitude, it would be possible to buy a brand new 5.5MW Wartsila engine every three years. Additionally, when it came to spare parts prices, the agreement was that GPL would be charged at a discounted price. However, the records show that GPL was paying the global list prices up until the contract termination with Wartsila. PPDI will be purchasing spares for all parts at equal or better prices.
It is certainly an indictment on the previous administration that they were clearly in the dark for years on the amount of monies that was being paid out to Wartsila; Mr. Brassington served as Chairman of the Board from 2010-2015 while Mr. Dindiyal was CEO in 2015. Yet, neither of them, it would appear, was aware of what was transpiring in regards to Wartsila’s operations.
The shift from Wartsila to PDDI is a needed move. Upon its entry into Guyana, Wartsila had no prior successful operations and maintenance of power plants and its management was unwilling to offer any guarantees of its services.
It must be emphasised at all times that Wartsila was managed wholly and solely by Guyanese and PPDI intends to maintain this model, coupled with drastic financial savings. In fact, PPDI’s top management comprises of Guyanese with more than 60 years of combined experienced with Wartsila both locally and regionally. Furthermore, I must once again urge that the Opposition takes up its seat on the Board of GPL so that they can be properly informed. The other equally inaccurate matters raised by Mr. Edghill in his letter will be addressed at a later stage in a more appropriate forum.
Regards
David Patterson
Minister of Public Infrastructure