.jpg)
THE combined Opposition last evening slashed another $5.2B from the 2013 Budgetary Allocations, this time targeting the Guyana Power and Light (GPL) that falls under the Office of the Prime Minister. The cut was triggered by a motion set in play by A Partnership for National Unity’s (APNU) Carl Greenidge, reducing the capital support for the Power Company from its $10.2B request to $5B.
Prior to the vote, Prime Minister Samuel Hinds responded to queries on the impact of the cut.
According to PM Hinds, “without this money GPL would be having a hole of about 20 percent in what it requires to sustain itself.”
He said that, at present, each kilowatt hour of electricity sold, the consumers require a $20 subsidy from Government.
The Prime Minister said that should the monies not be approved, it would mean that the power company will have to end up reducing the purchase of fuel and other support measures such as transformers among others.
Hinds said that while the situation at the power company is not as ideal as persons would want it to be, the power company is in dire need of support.
Finance Minister Dr Ashni Singh, who also sought to address concerns raised by the Opposition, said all the challenges were appropriately identified and that there is no immediate answers or magic bullets that would solve the problems of GPL.
“We share the concerns of our colleagues on that side of the house,” said Dr Singh as he urged the Opposition members to recognise that the reality facing the power company is one of its cost structure which cannot be sustained by its existing tariff.
He said too that the company is in dire need of investments for which it cannot meet out of its own cash flow.
Dr Singh called on the Opposition to support the measures and “not cut them.”
He called on members of the House to avail themselves of the various parliamentary avenues “so we can put our heads together on the matter.”
Prime Minister Hinds told the House that this year the power company will be utilising 78 per cent of the monies it realises from sales, to meet its fuel bill, adding that should fuel prices increase during the year it would only compound the situation further.
The power company has budgeted some $24.7B for the purchase of its fuel this year.
Alliance for Change (AFC) Leader Khemraj Ramjattan, enquired of the Prime Minster, what measures would be taken at the board level to effect changes to increase the efficiency of the company, to which Hinds told him that he was proceeding on an incorrect premise.
The Prime Minister informed the House that the losses being incurred by GPL do not relate to its board of directors but as a direct result of the suppression of tariffs.
In staving off a tariff increase that would have been passed on to consumers, Hinds told the House that some $28B has been transferred to the power company in the past decade while another $22B would have been provided in loans and equity investment.
“So I don’t think we should start off by saying that these results in terms of support from budget are due to poor performance.”
He said that the bigger issue plaguing the power company is that of technical and commercial losses, for which the power company is looking to tackle through investments in more technologically advanced measures.
The Prime Minister noted that the level of technical and commercial losses experienced by the power company is certainly something he is embarrassed about but stressed that the company in seeking to correct the deficiency, has been undertaking massive upgrades to its distribution networks
In seeking to stress the importance of the subsidy and its relationship to the average consumers, Mr Hinds said that fuel and other commodities required for power generations is purchased at the same price such as countries in the Caribbean but Guyana has managed to keep its tariff costs, in some cases, half of what is being charged in other territories.
“Look at the comparative figures…We are doing reasonably well,” implored Hinds, as he reminded that the subsidy required by the power company was not as a result of inefficiency but rather a result of the deliberate suppression of the tariff in a bid to assist the GPL customers.
APNU’s Greenidge, in his observations to the House, said that despite the pronouncements made by the minister, the tariff in Guyana continues to be high and has, in part, led to the heavy levels of technical and commercial losses by the company.
Greenidge said the tariff that GPL found it necessary to impose have been one of the main factors destroying the manufacturing sector.
Prime Minister Hinds was however quick to point out to the APNU member that the cost of providing electricity bears heavily on the prevailing circumstances and spoke to the fact that 70 to 80 per cent is directly related to the purchase of fuel.
He said this was one of the primary reasons behind government’s push for the early completion of the Amaila Fall Hydro Electric project.
PM Hinds said the fact of the matter is, in the current context, every kilowatt hour of electricity that the power company sells to its customers has to be subsidised by government.
Despite the pleadings on the part of the administration, Greenidge said he intends to proceed with the motion and successfully piloted the largest cut in the 2013 Budget to date, leaving the Guyana Power and Light Company $5.2B less than what it requires.
Prior to the vote, Prime Minister Samuel Hinds responded to queries on the impact of the cut.
According to PM Hinds, “without this money GPL would be having a hole of about 20 percent in what it requires to sustain itself.”
He said that, at present, each kilowatt hour of electricity sold, the consumers require a $20 subsidy from Government.
The Prime Minister said that should the monies not be approved, it would mean that the power company will have to end up reducing the purchase of fuel and other support measures such as transformers among others.
Hinds said that while the situation at the power company is not as ideal as persons would want it to be, the power company is in dire need of support.
Finance Minister Dr Ashni Singh, who also sought to address concerns raised by the Opposition, said all the challenges were appropriately identified and that there is no immediate answers or magic bullets that would solve the problems of GPL.
“We share the concerns of our colleagues on that side of the house,” said Dr Singh as he urged the Opposition members to recognise that the reality facing the power company is one of its cost structure which cannot be sustained by its existing tariff.
He said too that the company is in dire need of investments for which it cannot meet out of its own cash flow.
Dr Singh called on the Opposition to support the measures and “not cut them.”
He called on members of the House to avail themselves of the various parliamentary avenues “so we can put our heads together on the matter.”
Prime Minister Hinds told the House that this year the power company will be utilising 78 per cent of the monies it realises from sales, to meet its fuel bill, adding that should fuel prices increase during the year it would only compound the situation further.
The power company has budgeted some $24.7B for the purchase of its fuel this year.
Alliance for Change (AFC) Leader Khemraj Ramjattan, enquired of the Prime Minster, what measures would be taken at the board level to effect changes to increase the efficiency of the company, to which Hinds told him that he was proceeding on an incorrect premise.
The Prime Minister informed the House that the losses being incurred by GPL do not relate to its board of directors but as a direct result of the suppression of tariffs.
In staving off a tariff increase that would have been passed on to consumers, Hinds told the House that some $28B has been transferred to the power company in the past decade while another $22B would have been provided in loans and equity investment.
“So I don’t think we should start off by saying that these results in terms of support from budget are due to poor performance.”
He said that the bigger issue plaguing the power company is that of technical and commercial losses, for which the power company is looking to tackle through investments in more technologically advanced measures.
The Prime Minister noted that the level of technical and commercial losses experienced by the power company is certainly something he is embarrassed about but stressed that the company in seeking to correct the deficiency, has been undertaking massive upgrades to its distribution networks
In seeking to stress the importance of the subsidy and its relationship to the average consumers, Mr Hinds said that fuel and other commodities required for power generations is purchased at the same price such as countries in the Caribbean but Guyana has managed to keep its tariff costs, in some cases, half of what is being charged in other territories.
“Look at the comparative figures…We are doing reasonably well,” implored Hinds, as he reminded that the subsidy required by the power company was not as a result of inefficiency but rather a result of the deliberate suppression of the tariff in a bid to assist the GPL customers.
APNU’s Greenidge, in his observations to the House, said that despite the pronouncements made by the minister, the tariff in Guyana continues to be high and has, in part, led to the heavy levels of technical and commercial losses by the company.
Greenidge said the tariff that GPL found it necessary to impose have been one of the main factors destroying the manufacturing sector.
Prime Minister Hinds was however quick to point out to the APNU member that the cost of providing electricity bears heavily on the prevailing circumstances and spoke to the fact that 70 to 80 per cent is directly related to the purchase of fuel.
He said this was one of the primary reasons behind government’s push for the early completion of the Amaila Fall Hydro Electric project.
PM Hinds said the fact of the matter is, in the current context, every kilowatt hour of electricity that the power company sells to its customers has to be subsidised by government.
Despite the pleadings on the part of the administration, Greenidge said he intends to proceed with the motion and successfully piloted the largest cut in the 2013 Budget to date, leaving the Guyana Power and Light Company $5.2B less than what it requires.
