The Guyana Power and Light (GPL) and APAN Energy – the company that supplied 18 used generators from Honduras in 2023 – are currently in legal discussions as the utility company wants to leverage liquidated damages for late delivery of the engines.
“The matter is being reviewed by external counsel, London House Chambers at the request of GPL with instructions to claim liquidated damages and compensation for any breach of contract established. London House Chambers have already made contact with APAN’s counsel in pursuance thereof,” Attorney General Anil Nandlall SC told the Sunday Stabroek when asked for an update.
During his end of year press conference last week, President Irfaan Ali had informed that he and his Cabinet have said to GPL that once this country pays for a service and delivery and it was not met, “that action must be taken”. He had said that Nandlall was charged with overseeing the process and that action had already commenced. “. All the issues surrounding what happened are being dealt by the AG, performance, every single thing,” the President said.
The deal to acquire used generators from Honduras to ease power woes in the approach to Christmas 2023 had been heavily criticised.
The Attorney General gave an overview leading up to the stalemate between the two sides over payment.
“APAN was contracted to install a 28.9MW HFO Power Generation Plant at Columbia, Mahaicony consisting of 17 generators pursuant to a Turnkey Engineering, Procurement and Construction Agreement dated July 27, 2023, to provide emergency power to the grid. Unfortunately the contractor stated that they were unable to meet the contractual time-frame stipulated because of circumstances over which they had no control, including delay in shipping as a result of industrial unrest that affected operations in the Panama Canal,” he said.
“Sixteen of the seventeen generators have been installed and are operational. An additional generator is scheduled to come on stream shortly and this will meet the full complement of the contracted generational capacity. The process of a transition from LFO (Light Fuel Oil) to HFO (Heavy Fuel Oil) is ongoing and the contractor has undertaken that this process will be completed by the end of March 2025,” he added.
Acting Chief Executive Officer of GPL Kesh Nandlall, (the brother of the Attorney General) also told this newspaper that the company was contracted to deliver HFO gensets and had brought in LFO ones which it said would be retrofitted to HFO but that process took longer than the contracted delivery time.
He said that the generators were all functional but the issue was the timeframe for delivery.
Amid constant blackouts caused by increased electricity consumption and a generator being out for maintenance, GPL procured 17 reconditioned containerized generators from Honduras in 2023 saying it was preparing to ensure continuous power for the 2023 Christmas holiday season.
Last year, GPL had to seek more generating help via two power ships.
Minister within the Ministry of Public Works, Deodat Indar, at a press conference in November had said that the cause of the then load shedding was due to heightened demand and the 7.8-megawatt engine that was taken off for maintenance at the Kingston location.
“So, because we have pulled down that 7.8-megawatt engine at Kingston to do the general overall, it has taken off our reliable capacity by 7.8 megawatts,” the minister disclosed.
He informed, “Right now, in terms of all of the engines that we have either at Garden of Eden, Kingston, Canefield, and Skeldon, together we have the reliable operating capacity of 167 megawatts.
“So, because of that shortfall, we see some blackouts. When the problem started, the peak demand was 184.5 megawatts, it was bigger, the shortfall was bigger, we see the peak now reducing,” Indar had told reporters at the press conference.
The generators from Honduras had experienced several shipping delays. They were first expected here on November 22nd and then December 5th before finally arriving on December 13th 2023.
The Columbia station is in the Mahaicony area and the generators feed into the Demerara/Berbice Inter-connected System (DBIS).
However, there had been no word that the company and GPL had been in any legal tussle as at April of this year Prime Minister Mark Phillips had said that 17 of the 18 were installed. It was unclear if that meant they were functional.