Key GEC deal laws passed - opposition walks out during stormy prelude By Gitanjali Singh Stabroek News July 2, 1999 For the second time in two years, government yesterday propelled laws through Parliament to privatise the power company in the face of stiff defiance from the opposition and the stormy session saw a walk out and a desk thumping cacophony that drowned out the Prime Minister's contribution. PNC leader, Desmond Hoyte, led the walk out from the National Assembly yesterday when Speaker, Derek Jagan, ruled that a point of order raised by Alliance for Guyana MP, Dr Rupert Roopnaraine was invalid. Reached at home for a comment on what the party intends to do now that the two bills have passed, Hoyte said he had no comment. Hoyte, earlier this week, had warned that the Commonwealth Development Corporation (CDC)/ESBI consortium would have to rethink its investment in the power company if the government continued to refuse to release the agreements relating to its privatisation. He said the consortium should fade quietly away or it would stand to lose its investment. The walk-out was preceded by almost an hour of loud desk thumping by the PNC benches and demands of "we want the agreements," drowning out the presentation of Prime Minister Sam Hinds who moved to start the debate in support of the Electricity Sector Reform Bill. The ear-piercing assault from mainly PNC back-benchers, such as Andy Gouveia and Joseph Hamilton, earned several rebukes from the Speaker who after 45 minutes of it, got to his feet and warned that he intended to enforce the Standing Orders barring members from disrupting another member from speaking. This saw Gouveia and Hamilton opting for the parliament lobby to be followed by most of their colleagues, with the exception of Winston Murray and Clarissa Riehl. But it was after Hinds--who faltered somewhat at the beginning of his presentation in face of the unrelenting uproar, and who could hardly be heard but kept up with his presentation to the end-- continued his contribution that Dr Roopnaraine stood to have the debate on the Bill deferred. Rising on a point of order under Standing Order 48(2), Dr Roopnaraine asked that the debate on the second reading be deferred to a day not later than ten days after each member of the National Assembly (or head of parliamentary parties) has been supplied with a copy of each of the relevant and important, but unknown documents, referred to in the text of the Bills by the words 'Licence', 'Agreement', 'Five-Year Development and Expansion Plan' and 'Shareholders Agreement'. He argued that each document is necessary to inform the members of the National Assembly of the implications of the two bills facing the house and for them to take an intelligent interest in the debate. But Jagan said it was not a point of order and the type of motion proposed had to be an amendment to a motion and there was no such motion before the house. Dr Roopnaraine then said that the members of the opposition felt incapable of speaking on the Bill and at Jagan's insistence that he had ruled, Hoyte then led the walk out. The United Force (TUF) leader, Manzoor Nadir, who stayed behind criticised both the PNC and the government for their behaviour in Parliament in his brief and general comments on the Electricity Sector Reform Bill. Nadir said that the raucous display from the PNC and the reluctance by the government to share the agreements with the opposition were an indication of the sad state into which the political leaders were taking Guyana in the twenty-first century. Noting the attempts by the government to have the parliamentary parties comment on the two bills in March, Nadir said it was an insult that the government offered the documents to vested interests such as the consumers association and the private sector, who signed confidentiality agreements, but that those elected to look after the affairs of the people of Guyana were being denied these agreements. Hinds, whose presentation was almost an hour long, said it was not practical for the government to release the agreements to the opposition before they were closed as it would lead to everyone wanting to have a say, and an impossible situation arising with hundreds being involved in the negotiations. His presentation began with an assertion that the government's nationalist position would not be in any way affected by the proposed joint venture with CDC/ESBI and he stressed the need to reform the law to facilitate the agreement given the necessity to inject capital into GEC. Touching on the basics of the 50-50 agreement, which allows for self-generation of power, an initial private offering in two years and a public offering in five years, tariffs set according to an agreed formula to be ratified by the regulatory agency and expansion in rural electrification among other issues, Hinds attempted to sell the privatisation as the best possible deal. He said the Public Utilities Commission (PUC) would just be required to enforce the expansion/development plan of Guyana Power and Light Inc, the new power company to be set up under the privatisation. This, he said, was the original format of the PUC Act, 1990. He said on the rates issue, taking into account the phone company experience, the government opted for a rate of return method and fixed a formula for calculating the tariffs. "We also chose to set out that there be an annual review and adjustments of rates, preferring regular, small adjustments up and down rather than indefinite, uncertain, large adjustments which would generate much time consuming battles as to whether there should be a review or not and if so what are the detailed procedures for calculation," Hinds stated. He assured that for consumers not to pay the price for any inefficiencies of the new company, the rate base formula only uses efficiently used assets in its calculations. This means idle assets could not be used such as inventory. The Prime Minister also noted that the government chose not to continue the monopoly on power generation and after five years will be granting licences for independent power producers which can take into consideration hydro, solar, wind and bio-mass as sources of energy. The new power company is expected to enter early discussions with potential major generators such as GUYSUCO and two groups recently granted prospecting licences for development of hydropower plants at Tumatumari and Amalia Falls. Hinds also addressed the role the PUC should be playing in regulating utility services and said his government sees it as a court administering specific sector laws and even specific arrangements in agreements. "...It is in this context that we have enacted in a number of places the precedence of the licence and agreements, over the sector law and in turn the sector law over the PUC law and for good measure any other existing law except of course the constitution," Hinds said. He argued that objections to this were without sense and said it was pointless to talk of secrets when the licences would have to be gazetted before they come into effect. The government has also committed itself to laying the agreements in parliament and they will have to be filed with the PUC before they take effect. The Bill which was passed replaces the ESRA of 1997, of which only two provisions had been brought into effect and which means that the Electricity Act and the Electricity Lighting Act of 1890, amended in 1972 are still in effect. There were inconsistencies in those acts and they had to be merged and updated. Hinds said the new law retains ministerial authority over licensing, but establishes a new level of clarity and oneness in the standards of granting, modifying, extending and revoking licences. It also imposes obligations on public suppliers of electricity to maintain comprehensive sustainability programmes and exempts self generators from needing licences. And Minister of Housing and Water, Shaik Baksh, who rose to support the bill, said it provides for compensation to consumers for damage, loss, negligent or wilful loss caused by the new company. Consumers also have recourse to the PUC to lodge complaints. Stating that instead of the government pouring money into the power company it will be receiving dividends, Baksh said that the licences could be revoked if the new company did not operate within certain standards and the government had the first option to buy out the other partner. He said the government feels the competition from opening up generation will lower rates and noted that the rate of return to the investor will be 14.95% after tax and this is on the efficient use of assets. And by January 28, of each year the new operation will have to show a certificate indicating what rates consumers are expected to pay and by April this has to be verified by an independent authority and submitted to the PUC for approval. "The PUC retains the right to review the reasonableness and how justifiable the rates are," Baksh stated. He also noted the need for annual and five-year business plans. During yesterday's session Hoyte, who began the demands for the agreements promised by Hinds pushed several volumes of the Laws of Guyana off his table during the PM's presentation. The speaker's interruption of the session began almost seven minutes after yesterday's 2:00 pm sitting began, with an appeal to get on with the business of the house. He later read Standing Order 39 which deals with the behaviour of members who are to be silent when others are speaking. He reminded that he usually allows heckling but urged that members behave with decorum as the proceedings were being televised. He also cited Standing Order 41, which gives him the power to ask a member to leave the Assembly and urged that he not be made to use it. But this did not help and by 2:45 pm the thumping at the tempo of a stampede of horses saw Jagan rise to his feet three times and ask those who did not wish to listen to Hinds to leave as their behaviour was a bad reflection on the House. Gouveia left, eventually to be followed by Hamilton and then most of the other PNC members. The Public Utilities Commission Bill 1999 was also passed in the subsequent debate. A © page from: Guyana: Land of Six Peoples