Govt to continue footing GWI electricity bill, after clearing arrears – Dr Singh

– as Finance Ministry’s budget approved

Senior Finance Minister Dr Ashni Singh

Despite having to clear its electricity arrears in 2021, the Guyana Government will still be financially assisting the Guyana Water Incorporated (GWI) to foot its massive energy bill – a move which Senior Finance Minister Dr Ashni Singh explained can be considered as a subsidy to deliver water to people across the country.
He made this remark during the consideration of the 2023 Budget Estimates for the Ministry of Finance in the Committee of Supply of the National Assembly on Thursday.
Dr Singh was questioned by Opposition Member of Parliament Volda Lawrence about a $4.062 billion allocation for electricity charges under his ministry. She was enquiring how much of the amount is for a subsidy to the Guyana Power and Light (GPL) Limited, and how much would cover arrears.

GWI Headquarters

While he did not give a breakdown of the figures, the Finance Minister did explain that most of the money would go towards clearing the electricity arrears at the power company. “It would be recalled that, when we came into office, there was a stock of arrears that we inherited, which we’ve been trying to clear and we’ve been making progress with clearing… And so, thus far, what we’ve paid and what we’re anticipating to pay in 2023 represents clearance of arrears and keeping us current in terms of electricity charges,” he explained.
However, Dr Singh pointed out that there are some public sector entities, such as GWI, that are incapable of covering their electricity cost, and therefore need help to foot their bills. “There are some entities that in fact do have a challenge with their capacity to pay, because they simply don’t generate [sufficient revenues to meet electricity costs]…

Opposition MP Volda Lawrence

“GWI is a good example of an entity whose revenues simply won’t suffice to meet the cost of their entire energy cost. They’re not the only example… [But] the Central Government has historically supported the finances of GWI by either paying their electricity bill or significant parts of their electricity bill. That continues to be the case,” he noted.
In late 2020, it was disclosed that the GWI owes the GPL some $7 billion in arrears. This was in addition to monies owed by other state agencies, such as the Bureau of Standards. GPL’s Divisional Director of Finance, Loris Nathoo, had indicated in March 2022 that substantial payments were made in 2021 on several Government accounts. In fact, he had noted at the time that the GWI arrears were almost up-to-date, while other state accounts were liquidated.
According to Nathoo, GWI’s average monthly electricity bill is approximately $220 to $250 million.
In May 2022, the Chief Executive Officer of GWI, Shaikh Baksh, had revealed that prudent financial management at the utility company had not only resulted in its financial stability, but also a reduction in electricity costs. He noted that the $8 billion bailout from Central Government in 2021 to pay GPL had significantly helped the power company. Nevertheless, during Thursday’s consideration of the Budget estimates, Lawrence further asked what mechanism is in place to ensure that these state agencies pay their bills on time, instead of relying on bailout from Central Government.
In response, Minister Singh revealed that staff at the Finance Ministry have been working closely with those agencies to ensure they meet their obligations. Regarding the GWI situation, however, the Finance Minister stated that there would have to be a comprehensive look at the company’s operations to address this issue. But in the same breath, Dr Singh posited that “…in some sense, the Government’s support to an entity like GWI to pay electricity bill really can be considered a Government subsidy to support the cost of delivering water.”
He further reminded that Government has absorbed the global increase in the price of fuel, paying GPL the difference so that Guyanese are not burdened with an increase in the cost of electricity.
Budget 2023 has allocated $17.7 billion to GWI, almost doubling the $9.9 billion the water company received last year.
Meanwhile, the Committee of Supply on Thursday also approved some $600 million for the implementation of the Caribbean Development Bank’s (CDB’s) Basic Needs Trust Fund (BNTF) 10th Cycle here in Guyana.
In outlining the overview of the projects to be executed this year, Dr Singh noted that the approved sums will be used for the construction of educational facilities, including nursery, primary, and special schools, as well as early childhood facilities in vulnerable communities.
In addition, the BNTF would undertake the rehabilitation of community roads, livelihood enhancement projects, and skills training programmes, as well as the construction of water supply systems in Nappi, Warawatta, Kariako, Kurukubaru and Surama.
Another $100 million would also be injected into special support to vulnerable communities through community development programmes and projects. The Minister noted that the programme is not new, and a dedicated three-member committee has been established to ensure its proper implementation.
Under contributions to local organisations, the Linden Enterprise Network (LEN) received the sum of $50 million to continue its mandate of providing financing to small businesses.
The Finance Minister also gave an update on the National Census, which would continue this year in some regions. He noted that a preliminary report would be done later this year on the exercise.