The trouble with Guyana Power and Light
Woman's-eye View
The column this week is an edited version of excerpts from a public presentation made by consumer advocate Sheila Holder.
Many of us have our individual horror stories about GPL. Here are two: Two. A friend whose monthly bills had always been in the region of $2500-$3000 suddenly began getting bills of $24000-$34000. Each month she would pay a small amount. When she went in to GPL she was promised that someone would come to check the metre, but no one had come after 4 or 5 months. Then GPL came to cut off the lights. Fortunately, she "knew somebody", so the lights were left on. Investigation showed that the Company owed her $25000. Now her bills are again in the range of $2500-$3000 a month and marked, "credit bill, do not pay". Andaiye by Sheila Holder At the time GEC was privatised, it owed huge debts to entities like GUYOIL, was making yearly losses of G$1B, was a financial burden on the state's treasury, and had outstanding foreign debts of US$40M. To this day, the real financial losses to consumers remain uncalculated - not only for damage done to household and commercial equipment, but also in terms of retarded national development objectives and the damage done to the nation's temperament as a result of the years of frustration from the constant blackouts. Even as we experience a resurgence of blackouts under new management appointed by GPL investors, we have to agree that the status quo needed to be changed. However, what we wanted was not what we got out of privatising GEC. What we wanted was the kind of privatisation arrangement that would have dealt with the financial crunch facing the power company, an improvement in the reliability and efficiency of the service, the injection of capital into it, and the crafting of plans for a more efficient generating system. In my discussions with GPL I've been told that plans have indeed been prepared, but as I turned the spotlight on the current situation there, I learnt that most of the US$9M brought in was put into operating expenses, and the old and tired generators in the system are now being reconditioned, yet again, in order to squeeze some more life out of them. That is part of the trouble with GPL. Here are some other examples: 1. It may be years before acceptable standards are achieved. At the rate the utility is currently dealing with the technical losses in its distribution system, it would take some seven years just to attain acceptable sector standards. In the meanwhile, Guyanese consumers have to continue to foot the bill for such inefficiencies, and an anticipated progressive rate increase as well. 2. The question has been raised as to whether Guyana is getting value for the exorbitant price being paid for the services of the expatriate management team. 3. Public Relations are following a disturbing pattern. If the abominably poor public relations exhibited so far by the power company were to be analysed, one could argue that they have taken an accurate gauge from the government. A rather disturbing pattern is being set by expatriate investors that suggests that once they have the support and protection of the government they don't have to pay attention to any other opinion in the country. 4. The Electricity Sector Reform Act (ESRA) is negligent in protecting Guyanese consumers. The ESRA does not provide for a fair system of redress for Guyanese consumers. Under the new laws, we can only sue the utility if we can prove negligence. Could this be constitutional? In the circumstances it is not surprising that the GPL has terminated an arrangement whereby officers from the Public Utilities Commission (PUC) and the power company would meet regularly to review and pronounce on consumers' small claims. 5. We need an arms-length relationship between the Office of the Prime Minister (OPM) & GPL. Again we see what appears to be a far too close relationship developing between the OPM and the management of the power company. Bearing in mind that GEC had a history of political interference which worked to its detriment, this development is to be regretted not only for the reason advanced, but also because the OPM does not have the institutional expertise and strength to engage in appropriate monitoring activities. 6. The regulatory functions of the PUC have been weakened. In the weakened regulatory state that the enactment of the ESRA has placed the PUC in, there appears to be confusion in defining the roles of the various oversight institutions in monitoring the public utilities sector generally. The sidelining of the PUC and the weakening of its regulatory functions point to the administration's misunderstanding of its responsibilities in the context of the sector's liberalisation. 7. Finally (for now), a most astonishing fact was revealed to me by the Finance Controller of GPL a few days ago. He said that as a result of the introduction of better controls and a very active technical inspectorate team, GPL had managed to collect additional monthly revenues amounting to G$20M so far. Put more bluntly, GPL is effectively managing to plug the theft of electricity by some of their commercial customers, curtailing in the process what is perhaps one of the largest frauds to take place under the watch of this government. I believe that fraudulent activities of these proportions may have put the financial viability of the GEC in jeopardy. The World Bank estimated that some US$5M was stolen from GEC through billing frauds alone. If I were to take the stoppage of that level of fraud to its logical conclusion, it would be reasonable to predict that the new entity could recover its investment of US$9M from that source alone over the next few years. In a truly democratic society, someone would have been held accountable for such huge losses. Such nefarious activities have put undue pressure on the state's financial resources when large allocations had to be made to the GEC to the detriment of other important areas like health, education and infrastructural works. Further, while the burden for the repayment of the large IDB loans granted to GEC will have to be met by the population, defaulters would have taken for themselves what amounts to illegal fiscal awards.
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