Former Minister of Public Infrastructure David Patterson is rebutting the recent claims made by the Guyana Power and Light (GPL) that the company contracted to maintain its generators utilised cheap spares.
He insists that purchases by Power Producers and Distribution Inc (PPDI) were original spare parts procured from companies with a reputable quality system.
“All of the entities were listed on the Lloyd’s of London’s approved list of manufacturers,” Patterson stated while arguing that there was never any objections to the proposals submitted by PPDI for works by GPL.
During the years of its management of the electricity generating sets, PPDI under its contractual obligations, was required to submit its annual operations and maintenance plan to be approved by GPL and its directors.
“This plan included among other information, the list of suppliers that PPDI was proposing to obtain spares from and there was never any objection to the parts suppliers by GPL,” Patterson said on Friday as he responded to the utility company’s statement issued on Thursday.
He assured that all of its procurement procedures were in compliance with the National Procurement and Tender Administration Board regulations and every procurement of a spare part was in compliance with the tendering process.
It was also pointed out that the GPL release failed to mention that the company had a representative on the board of PPDI, who at all times was a senior director of the power company.
“As an additional safeguard, GPL always had a representative on PPDI’s tender board…plus it had the extra assurance of being scrutinized by (the) GPL procurement department – to now claim the company departed from these established principles – is nothing more than new GPL’s tangled web.”
And in an additional layer to the oversight of PPDI, in keeping with the policy of inclusivity of the previous administration, a position on the board was reserved for a nominee of the then parliamentary opposition. This offer, Patterson said, they declined to accept from 2017 to 2020
According to the former minister, PPDI, which is a state-owned company, had its procurement manual developed by now Minister within the Ministry of Housing and Water, Susan Rodrigues, under the supervision of chartered accountant Christopher Ram and later approved by the Public Procurement Commission.
GPL on Thursday rejected Patterson’s claim in a Kaieteur News report that PPDI had been up to standard and that the PPP/C government had targeted its managers in August 2020 because their salaries were perceived to be too high.
According to GPL, “earlier this year, PPDI had to cut invoices submitted for replacement parts used since 2018. It turned out that these are some of the off-market spares that failed prematurely that GPL was being asked to pay to replace.”
When it was announced in October, 2018 that PPDI would be taking over the management of Wärtsilä generators from the Finnish manufacturers, concerns were raised as to whether the level of service would be maintained.
According to GPL’s statement, “During the 20 + years that Wärtsilä had the Operation and Maintenance Contract with GEC/GPL, the various power plants maintained an availability above 98%. Their maintenance programme was rigid and utilized only Original Equipment Manufacturer spares. Contrary to what former Minister Patterson asserts, the use of alternate spares came after PPDI was given the contract in 2016 and continued until 2021 when GPL discovered this breach of the Contract. The use of cheaper off the market spares allowed PPDI to realize healthy profits while GPL had to pay for the early replacement of the major components.”
This claim was roundly denied by Patterson who pointed out that during the period 2017 – 2020, there were no records of GPL raising any issues with the performance of PPDI. On the contrary, he said, GPL, was always in high praise of the service provided, “so much so, that by the end of 2020, GPL and PPDI were in discussions on the expansion of maintenance services for other locations (Leguan, Wakenaam, Bartica, Anna Regina, etc.).”
Major challenges
In a report submitted on Friday to the press by Patterson, PPDI said that they faced major challenges when it came to the maintenance of GPL generators. In their annual reports from 2018 to 2019, PPDI listed several of challenges they faced.
In 2018, the company said it was difficult to get the Guyana Power and Light to make capital investments to plants with defects. It stated too that there were alternator failures at the newer Kingston 2 and Vreed-en-Hoop Power Plants.
For 2019, they said it was difficult to access the engines and release them in a timely manner to perform major overhauls at the recommended running time interval. This resulted in an increased wear and tear and thus increased the cost of the maintenance.
Also, during that year the company noted that they started experiencing payment delays from GPL Inc which hampered the timely procurement of spares thus driving up costs.
The former APNU+AFC government Minister stressed that PPDI was only formed after they recognised Wärtsilä’s maintenance performance was not what the utility company was paying for.
“During this review, unmistakable evidence was uncovered which highlighted that based on the company’s structure, GPL was paying above market rates for some spares and all of the maintenance was being conducted by local engineers, while GPL was being billed for overseas personnel and had a deferred maintenance schedule due to the lack of availability of staff,” Patterson highlighted.
In 2019, PPDI rejected claims that it was using Chinese-made spare parts. At the time, it was responding to assertions that were being made via a voice-note that had been circulating on social media.
PPDI said that they wanted to inform all stakeholders that the claim of Chinese-made spare parts being used in the execution of their maintenance activities is “completely false.”
Countering Patterson’s argument of better functionality since the PPDI takeover, GPL said on Thursday “It is known that Wärtsilä utilizes many Suppliers of components for its power plants. The Quality Assurance/Quality Control regime Wärtsilä employs is world class, and very often, the components/ parts supplied directly to users do not meet the same rigid standards. The result is a component that should last 48,000 service hours has to be changed at 24,000 service hours. GPL was paying for this between 2015 and 2020 under Patterson’s watch.”
GPL also contended that generation-related problems contribute to less than 2% of outages, resulting mainly from feeder trips, network switching, planned maintenance, and accidents involving vehicles and equipment. It said that the investments needed to modernize Transmission and Distribution are significant, and GPL is currently finalizing a Request for Proposals to automate the entire system while a complete upgrade is being done. It would take approximately eighteen months to complete the T&D maintenance that accumulated since 2017 due to the inadequacy of the maintenance programme.
GPL said that it is a fact that since last year heavy equipment operated by contractors have caused almost 60% of all shutdowns.
“Since the last shutdown, occasioned by heavy equipment less than two weeks ago, we have had two more incidents, one where we intervened and prevented a trip and another which caused the shutdown of the Edinburgh Substation, interrupting power to thousands of customers”, GPL said.
However, this claim was rubbished by Patterson who stated that he was not surprised that GPL now sought to blame the “almost daily” power outages on contractors. This, he contended, only signals the utility’s lack of supervision and coordination, while pointing out that the locations of GPL’s transmission and distribution lines are “known to all.” He countered by suggesting that a simple monitoring scheme along these locations would ensure avoidance of these shutdowns. “Having blamed others for 60 per cent of our daily shutdowns, GPL remains silent on the cause of the additional power outages.”
GPL’s statement did not say what action will be taken against the culpable contractors.
Patterson also posed a series of questions he said GPL should answer.
He asked for an update on the availability of the new plants installed at Garden of Eden, and the artificial lube consumption problem which is yet to be resolved thus costing the taxpayers millions of dollars. These Wartsila generators had to be shut down earlier this year after Prime Minister Mark Phillips said that there was a risk of a catastrophic fire. They have since been returned to service.
Patterson also enquired about the status of the newly constructed fuel tanks at Garden of Eden, where he said that eighty percent of the welds are defective, “so much so, that the company has been transporting fuel by road to keep these plants operational, once again costing the taxpayers millions of dollars”.
The former minister also flagged GPL’s decision to change the trip settings for the plants at Vreed-en-Hoop and Kingston, “despite being warned against same which results in these plants having to withstand longer periods of system feedback than recommended, thus resulting in premature equipment failure”.
He queried the status of the Skeldon 5.5MW generating station, which he said is now inoperable because the maintenance contractor operated the plant without the required oil separator.
He further called on GPL to speak on the status of the Giftland power distribution linkage, which was announced with great fanfare, as well as provide reasons why the entity is no longer feeding into the grid.
