Dear Editor,
There are credible reasons to believe that His Excellency, the President, Dr. Mohamed Irfaan Ali is being misled in a major way about issues in relation to the Guyana Power and Light Inc. (GPL). I don’t know by whom, but here is why. Although I am cognizant of the macro challenges over the last 15 years where the political opposition successfully blocked some of the major long-term investments such as the Amaila Falls hydropower project in 2011, and the lack of investments during their tenure in government for the period 2015-2020, there may be institutional and managerial limitations on the part of GPL. With this in mind, in the height of the blackout season in 2023, I conducted my own independent analysis on GPL to have an understanding of the entity’s internal challenges. As such, the analysis and findings presented herein (summary of the analysis and findings) were derived from an examination of various GPL’s development and expansion plans for the period 2012-2016, 2016-2020, and 2021-2025, together with the National Budgets for the period 2012-2023, GPL’s annual reports and audited financial statements. The aim of the analysis conducted were as follows:
● To identify the expansion and development
programmes of GPL, and the planned capital
investments,
● To determine to what extent were the expansion
plans and capital investments implemented, and
● To identify the implementation and investment
gaps based on the expansion plans, and the actual
capital budgets as per the National Budgets.
The deterioration of GPL’s management actually began since 2012. In this respect, GPL failed to produce annual reports, which ought to be laid over to the National Assembly pursuant to Section 67 (1) of the Public Corporations Act (1988) for the years 2012-2022. Resultantly, it is difficult to independently scrutinize the work of this entity for this period. Of note, GPL’s failure to produce annual reports for the past eleven (11) years is a flagrant violation of Section 67 (1) of the Public Corporations Act (1988). Section 67 (1) of the Public Corporations Act states the following… “A Corporation shall, not later than six months after the expiry of each calendar year, submit to the concerned Minister a report containing” – (a) An account of its functioning throughout the preceding calendar year in such detail as the concerned Minister may direct; and (b) A statement of the accounts of the corporation audited in accordance with section 48.
Section 67 (2) states that…” A copy of the report mentioned in subsection (1) together with a copy of the report of the auditor in relation to the same period shall be laid before the National Assembly not later than nine months after the expiry of the calendar year to which it relates”. Moreover, section 68 of the said Act establishes the “General Penalty” that shall be applied to everyone who is guilty of the contravention of any provision of this Act.
GPL’s operating revenue grew from a position of $29 billion in 2012 to $37.9 billion in 2022 representing an increase of $8.9 billion or 30.74%. For the same period (using 2012 as the base year), generating cost increased from $27 billion to $39.6 billion representing an increase of $12.6 billion or 46%, while operating cost increased by $6 billion or 91.34%, and the net operating loss increased by $9.4 billion or 242.24%. The entity’s total assets increased from $47.9 billion in 2012 to reach $81.5 billion in 2022 reflecting an increase of $33.6 billion or 70%. Notably, non-current assets increased by $26 billion or 78% for the ten-years period under review.
Considering that the budgetary allocations in the National Budgets are used to finance both capital expenditure and the shortfall in operating expenses, it therefore means that the increase in GPL’s non-current asset and the cumulative net operating deficit of GPL of $54.9 billion for the period, were financed by the $75.9 billion from the budget. This leaves a difference of $21 billion or an average of $2 billion annually that were not reflected in GPL’s balance sheet. Notwithstanding, it is likely that those sums were allocated to the other programmes in the energy sector such as the Hinterland Electrification Programme, etc., that would be accounted for by other [isolated] entities, for example in Linden, Lethem, Port Kaituma, Bartica etc.
The total funding gap for the period 2012-2022 is a whopping $78.3 billion. This gap can be explained by several factors. Ironically, the years 2012-2015 and prior (before crude oil was discovered offshore Guyana), there were no funding gaps save and except for the transformational investment of the Amaila Falls hydropower project that was blocked by the Opposition. Another explanation is that there could be an overestimation of the proposed capital budget in the expansion plans. However, this may be an unlikely factor given that the assessment conducted found a series of expansion and development plans for the period under review that remained unverified to determine whether those were implemented.
GPL’s Development and Expansion Plans for the period 2012-2025 – Proposed Development that were implemented based on the budgetary allocations in the National Budgets:
2012-2016
● Expansion of Kingston Power Plant by 15.8MW.
Equipment and materials for construction of new
sub-stations, land acquired for Ruimveldt,
Liliendaal, Good Hope, Columbia Mahaicony,
Vreed-en-Hoop, Edinburgh, and Golden Grove.
● Integrated transmission of 69 KV transferring
power from Skeldon to Essequibo Coast.
● Installation of submarine cable linking Vreed-en-
Hoop and Kingston.
● 3 Wartsila generators procured with total
capacity of 26 MW
● Installation of new Wartsila engines at Vreed-en-
Hoop, upgrading of 7 substations, installation of
transmission lines from Sophia to Onverwagt,
with a supervisory control and data acquisition
system.
● Pilot project to rewire sections of the distribution
network to improve efficiency and reduce
incidences of illegal connections.
● Two new substations built at Sophia and Good
Hope, rehabilitation of and extension of
transmission and distribution networks.
2017-2023
● Construction of Kingston Vreed-en-Hoop
substations.
● Construction of Kingston Vreed-en-Hoop
substations.
● Solar farm interventions, 33 MWs for Berbice,
Essequibo, Linden
● 50 MWs of firm generating capacity to boost
short term needs
● 413 km of new distribution lines and feeders;
new 69 kV transmission line from Kingston to
Sophia and from Edinburgh to Hydronie, new
rehabilitated substations at Hydronie, Sophia,
Columbia, Canefield and No.53 Village;
replacement of 320 inefficient transformers.
Other Investments that were not reflected in the expansion and development plans (2012-2025) but provided for in National Budgets.
● Completion of 4-new substations at Liliendaal,
Ruimveldt, Golden Grove, and Columbia.
● Onverwagt substation upgraded, transmission
lines installed from Columbia to Onverwagt,
fibre optic cables laid from Sophia to Garden of
Eden.
● Relocation of power plant in Lethem and
upgrading of power supply in Culvert City,
Mahdia, and Linden.
● 830 km of main distribution network to be
rehabilitated, aimed at reducing energy loss.
● Utility upgrade programme: distribution net
work.
● Rehabilitation of over 800km of low and
medium voltage network, spanning from Parika
to Corentyne.
● Installation of 10 mini-grids and 4 off-grid
systems, providing 1.472 kW of installed solar
capacity, thereby generating 5,305 kWh of elec-
tricity (Sebai, Iwokrama, Waramdong, Paruima,
Kurukabaru, Annai, St. Monica, Karaburi,
Capoey, Whyaka, Loo and Creek).
● Installation of solar farms in Mahdia, Leguan,
Bartica, Lethem.
● Provision for GTE.
● Construction of 1.5MW hydropower plant at
Kumu, and rehabilitation and upgrade of 700kW
capacity of defunct Moco Moco hydropower
plant, Region 9.
● Completion of 150 kw hydropower scheme at
Kato and for 30,000 PV home systems for
hinterland and riverain areas.
● Rehabilitation of 600 km of medium/low voltage
distribution network.
● Construction of parallel transmission linking
Kingston and New Sophia substations, upgrade
of existing L5 transmission line.
Development and Expansion Plans that were not implemented for the period 2012-2022 (these remained unverified)
● Berbice, 10MW upgrade and HFO conversion by
2011, Guysuco to provide 8-12 MW.
● 600kVa gensets at Leguan and another in
Wakenaam (2012), 3MW HFO fired unit at Anna
Regina and a used 2 MW HFO unit for Bartica.
● Construction of a new 69Kv sub-station at
Williamsburg.
● Expansion of the 69kV network from Edingburg
to Parika and further to Leguan, Wakenaam and
the Essequibo Coast with sub-stations at Parika,
Leguan, Wakenaam and two sub-stations on the
Essequibo Coast.
● Construction and interconnection of a 25MVA
substation at Linden.
● Completion of the frequency conversion and
upgrade of the 50Hz system in Georgetown. This
includes:
● The replacement of 17MVA, 11KV, 50Hz
transformers with 13.8KV, 60Hz transformers.
● Extension of 18Km of primary circuits.
● Introduction of pole mounted breakers with
auto-reclose capability for long feeders.
● Use of pole mounted breakers with remote close
capability to provide alternative feeds.
● Installation of automatic compensation
equipment to maintain a Power Factor of 0.98
● Phased upgrade of secondary networks to the
current construction standard and to meet fraud
proofing requirements.
● Use of concrete and tubular steel structures to
reduce the long term maintenance burden
presented by wooden poles.
● Acquisition of specialized vehicles and
equipment for transmission and distribution
(T&D).
● 17.4MW of generating capacity to be added to
the Vreed-en-Hoop facility in 2018.
● Construct new 10 MW, 60 Hz HFO fired
generators.
● Relocate the power plant at Bartica to a more
suitable location.
● Replace 4.6 MW of aged generation with
5.5MW of new HFO fired generating capacity at
Canefield Berbice.
● 4-new 69/13.8kv substations and expand five
existing substations. New 17MVA substations
will be constructed at:
■ Parika,
■ Canal No.2 Polder, West Bank
Demerara
■ Kuru Kururu on the Linden Highway,
EBD
■ Williamsburg on East Berbice
Substations to be upgraded
● Kingston (additional Bay), Sophia (2 additional
Bays), Good Hope (2 additional Bays),
Columbia (additional Bay), No. 53 Village (2
additional Bays), Vreed-en-Hoop (additional Bay), Edinburgh (additional Bay), Garden of Eden (rebuild former L2 Bay).
Additional Feeders to be deployed, West Bank Demerara.
New feeders to be available to serve along Linden Highway, Kuru Kururu and potential new industrial developments.
Dedicated feeders to be available to serve the growing commercial and industrial load in Parika and up to Roden Rust.
Information Technology
The phased implementation of GIS to serve T&D, Commercial Services, Loss Reduction etc.
The implementation of a modern industry standard Inventory Management System
Procurement and Implementation of a Business Intelligence system as a Management Information System tool.
Procure and implement a Worldwide Web enabled service for customer electricity account on line interaction.
The implementation of Budgetary Control within the current Oracle E-Business suite.
Extension of the All Dielectric Self-Supporting (ADSS) fiber cable from the backbone to GPL Commercial and T and D offices in East and West Berbice.
Procurement and implementation a modern Human Resource Management and Payroll system
Procurement and Implementation of a modern Document Management System
Upgrading of the Customer Information System
Procurement and implementation of a Computerized Maintenance Management System
Buildings
Vreed-En-Hoop: The construction of a building for Commercial Office. This will address the constant flooding of the Commercial office particularly during high tides.
Williamsburg: The construction of a building to relocate the Chesney Commercial office.
Sophia Training School: The construction of a modern facility within the Sophia compound for the Training school.
New Corporate Office: The construction of a modern building within the Sophia compound to accommodate staff from Middle,, Main and Duke Streets.
New I C T Centre: The construction of a building within the Sophia compound to accommodate I T and I T related staff i.e. GIS and AMI and provide a secure and controlled environment for sensitive and critical hardware.
Anna Regina: The rehabilitation of the Commercial and T and D office.
Leguan: The relocation of the Commercial Office away from the Generation station.
Garden of Eden: The removal of asbestos from the Stores and Workshop Building (roof).
Canefield: The removal of asbestos from the Stores and Workshop Building (roof)
Sophia Multi Purpose Building: Recommence construction and complete in 2017.
Versailles: Construct a building for T and D West. The current rented building requires extensive remedial work.
Canefield: Construct a building for the Generation Staff.
Garden of Eden – Phase 2, 54MW (2022).
250MW NG Plant – Phase 1, 108MW (2023)
250MW NG Plant – Phase 2, 142MW (2024)
Crab Island, 54MW (2025).
64.3 km of conductor upgrade to existing 69 kV transmission circuits;
11 new 69/13.8 kV distribution substations (load centres);
13-69/13.8 kV substations upgrades/expansions to accommodate additional transmission lines and primary distribution feeders; and
Installation of a total of 55 MVAr of Reactive Power compensators at the 69 kV level (IaDB Loan funded).
Upgrade of existing SCADA – expanding remote control and supervision reach into power generation and primary distribution levels, respectively;
Reinforce vegetation management;
Use of concrete poles and either concrete or fibreglass crossarms to improve the integrity of structures in primary distribution circuits;
Use of covered conductors in primary distribution circuits in areas of dense vegetation;
Installation and commissioning of 99 Auto-Reclosers;
Installation and commissioning of a total of 3,000 kVAr (4 banks) of Automatic Power Factor Correction Capacitor Banks on Onverwagt F2 (JICA Grant Fund);
Installation and commissioning of a total of 12,000 kVAr (23 banks) of Automatic Power Factor Correction Capacitor Banks on 30 primary distribution feeders;
Upgrading of 55.52 km of primary distribution circuits;
Upgrading 371 km of medium voltage conductors (JICA Grant Fund and GPL)
Construction of 46 new primary distribution circuits (for new and existing substations in the DBIS and Anna Regina); and
SCADA integration of Auto-Reclosers and Automation of Distribution Networks.
The impossibility to verify the foregoing is a cause for concern, which could translate to a deterioration of GPL’s management performance in terms of accountability and transparency. To this end, GPL is required to statutorily produce annual reports that is to be tabled in the National Assembly. The latest publicly available annual reports for GPL are for the years 2009, 2010, 2011 and 2012. Since then, there has been no publication of annual reports by GPL. Consequently, the unavailability of annual reports for the period 2013-2022 has made it difficult to independently verify the achievements of GPL, track and monitor the implementation of the expansion programmes and the overall assessment of management’s performance. In view of the foregoing coupled with the given situation that is of a national concern to all and sundry, the hereunder mentioned recommendations are proposed for urgent consideration/action:
The Board of Directors and Management of GPL should immediately ascertain the status of the development and expansion plans for the period 2012-2025 that appears to be unimplemented (these are unverified);
Management should take urgent steps to have the entity’s annual reports prepared and/or published, and more importantly, laid over to the National Assembly in accordance with section 67 (1) of the Public Corporations Act, 1988; and
Conduct an internal gap analysis of the entity’s development and expansion plans for the period 2012-2023 aimed at identifying remedial actions going forward.
Sincerely,
Joel Bhagwandin
