Electricity rates fixing
The folly of an uncritical approach

Stabroek News
April 26, 2003

Related Links: Articles on Guyana: A country at the cross-roads
Letters Menu Archival Menu

Mr Raphael Trotman and Mr Khemraj Ramjattan write monthly columns for our newspaper. Mr Trotman's column appeared earlier this week.

During the course of presentation of my submissions on behalf of Ramon Gaskin, in his application to quash the hikes in electricity rates imposed by Guyana Power and Light Inc., I had to, as a matter of course, be critical of the Electricity Sector Reform Act (ESRA) popularly known as ESRA and the Licence, granted thereunder, to GPL.

Not surprisingly, for some strange reason the thought had crossed my mind that the Learned Judge might question me thus, as he indeed did: "Mr. Ramjattan as a Parliamentarian what did you do to remedy these defects you seem to have now discovered? This giveaway to a strategic investor of a formula method to raise rates which is not subject to PUC scrutiny, you sat there and allowed to pass?"

Indeed, I sat in the National Assembly and voted for this Act. It was not only because of the discipline of being constrained to do so that I supported the measures in the ESRA. Such discipline in voting is largely necessary to prevent anarchy in Parliament.

The other reason was that I had been advised by the Ministers directly involved, that this was the only set of measures to get a strategic investor to invest in the industry. Especially convincing were points raised that in view of the Sask Power pull out, and lingering doubts about a continuation of political instability, it was necessary to hold out certain incentives to make investment in the sector attractive to a strategic investor.

This advice I had obtained because I wanted to know, and because I am not afraid or averse to asking questions. Moreover, a close comrade of mine, Mr. Deochand Narain the head of Go-Invest, had upon my request for a frank opinion on the changes being made to the existing law to accommodate the strategic investor, stated categorically that he was against it. Asked about the reasons for such an opinion he remained thoroughly professional, and did not want to say anything until the process would have come to a completion - he was an advisor to the Government team headed by the then Minister of Finance, which team was in negotiations, at the time, with the Strategic Investor. I regarded then and still do now, Mr. Deochand Narain as an extremely bright economist. Unlike other economists, he knew his economics. My later-to-be-client, Mr. Ramon Gaskin, himself was very much against what was happening at the time for a variety of reasons which I then thought to be ludicrous, but which I now know to be wholly logical and meritorious.

At the completion of the process of privatizing to the strategic investor, I was told quite a lot. And I have come to learn that privatizations occur not necessarily with the peoples' long-term interest being the primary consideration. Further and with all that has happened since then, I now realize why Cheddi Jagan was so adamant in refusing to privatize the electricity sector, and why indeed his approach to such a "commanding height" of this nation was and is wholly correct.

But all of this I could not tell the Learned Judge. Such a response would have been wholly absurd in a Court of Law. In any event, the chord that was being struck by the Judge was that Parliamentarians must get their act right. They must not pass laws in Parliament which are weighted heavily against consumers and then rush to Court to ask for remedies when this weight crushes and oppresses the consumers.

On a personal level I feel guilty. But as an advocate for my client, I had to press on and plead that notwithstanding his pertinent question, the Court ought to still scrutinise the rate hikes to determine whether they were lawful and reasonable in the sense that they were not oppressive.

What from all of this are the lessons to be learnt?

There must be magnanimity that indeed errors and mistakes were made, something wholly human and which we must not mourn for too long. Privatisation deals may go bad; just like nationalisations did earlier.

What, however, must be learnt is how to avoid their recurrence. In this regard, what went on must be made known and thoroughly examined. There must be a full disclosure of all material circumstances which led up to the decision to privatise, and what were the circumstances leading to the collapse. What were the respective arguments of the players who argued for and against this privatization? What were the real, honest considerations for entering into this specific deal? What were the other options, if any? This is vitally important for accountability purposes; and also, for knowing who are to be applauded and who are to be criticised. The jury, namely the public, must be in a position to return verdicts on these players.

Moreover, there is another reason why this must be done. Such findings or disclosures become the stock and capital for all Guyanese whether they be Government, Opposition, Civil Society or the individual subject. This will enable and empower every Guyanese to be more enlightened and knowledgeable and draw the necessary lessons from this experience, so that the next time around a better deal will be struck and a bad one avoided. A critical focus is not only necessary for transparency but for the survival of democracy. It is necessary not only to exhume failed ventures or misadventures, but to avoid future pitfalls in charting our way forward.

This is the approach taken by normal democracies, where there is not a rush to cover up. Rather there is a strong, almost obsessive, desire to burst the bubble as it were.

Knowing what went wrong today becomes useful tomorrow. With this knowledge our next generation can see farther. The wisdom of our experience is what will make them stand on our shoulders. Our societal data bank will have a precedent from which we can take guidance and use as a compass.

And Parliamentarians in future will not be confronted with embarrassing questions as I was from a Judge in open Court.

Site Meter