Chamber alarmed by high power tariffs
-calls for meeting with GPL
Stabroek News
December 1, 2002
With electricity eating up about 10% of the gross sales of its member companies, the Guyana Chamber of Industry and Commerce is in the process of recruiting a consultant to look at the issue.
Chamber President, Eddie Boyer told Stabroek News that the Chamber is being swamped by letters from its members expressing concern about the power costs.
Minister Nadir told Stabroek News last week that the Guyana Manufacturers Association has already put the issue on the table and the government’s initial response is the reduction from 30 to 25% of the consumption tax on diesel for those generating their own electricity.
Boyer says an added concern is the shrinking base of customers who will have to bear the brunt of GPL’s costs because of the exodus of some of the larger companies.
He says too that GPL should establish a relationship with the Georgetown Chamber and the regional chambers so that they could look at this issue together.
Boyer observes that even when some companies have turned to partial generation, they are not quite benefiting from the move as they are still receiving estimated bills which by law the power company is entitled to send. Banks DIH, generates its own power during blackouts and low voltage and a senior official told Stabroek News that the company is considering whether to move to full self-generation. He said in Trinidad the cost of electricity is 6 US cents per kilowatt hour. In nearby Brazil the cost is as low as 3.6 US cents.
Stabroek News understands that Ming’s Products and Services could also move to generate their own electricity. The company has reportedly crunched the numbers and believes it can recoup the outlay on a generator in a relatively short time.
Wieting and Richter could also begin self-generating as early as next month.
Malcolm Martin, its managing director, told this newspaper that the company’s bill has gone up by nearly three times since 1999.
He said that Phil Jacques a GPL official was working with the company to ascertain an accurate assessment of the power the company uses in an effort to reduce its bill. Stabroek News understands that in 1999 W&R’s monthly bill was about $1.6M and last month it was $4.8M.
But Martin said he was miffed at the remark by GPL’s CEO, John Lynn, who in a recent interview attributed the move to self-generation by some companies as being the result of having to pay for power they once used to get free. Martin said in his company’s 131-year history it had never stolen a single kilowatt of electricity.
Meanwhile Nadir says the power issue has been raised with him by a number of companies including Wieting and Richter, Banks DIH and DIDCO.
He said the government is engaging GPL in discussions because of its concern about the efficiency of the operations, especially the company’s failure to reduce its line losses. GPL in its agreement with the government was committed to have already reduced its line losses to about 29% from 40 per cent. But Stabroek News understands that the line losses last year were up to 42 per cent.
Some observers blame the high line losses on GPL’s failure since it acquired the power company to put any money into the transmission and distribution side of its operations.
Nadir points out that the law provides for self-generation as an option but that operators would have to look at the costs involved such as the acquisition of the generator, its maintenance, the issue of noise in determining whether in the long run it is cheaper than accessing the power generated by GPL.
Nadir says too that the cost of electricity is an increasing problem for the printing companies and the plastic bag manufacturers who are already plagued by the unfair competition as a result of plastic bags being smuggled into the country.
He says his ministry intends to undertake a sectoral analysis of the problem so as to come up with an industry-wide policy for addressing them.
Customers are likely to be faced with a hike in the power company’s tariffs next January which will further aggravate the woes of the business community and the ordinary consumers.
There is concern too by some observers about the restructuring of one of GPL’s investors, ESBI, which resulted in Texas Hart Group reportedly taking over its worldwide management operations. But Stabroek News understands that Prime Minister Sam Hinds has advised the Public Utilities Commission, which had raised the issue with him, that ESBI’s internal restructuring was not part of its remit. ESBI and the Commonwealth Development Corporation hold a 50% share in GPL with the Guyana government holding the other half.
