GPL’s management, accountability and transparency (Pt 1)

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 (hereinafter “GPL”). I don’t know by whom, but here is why.
Although I am cognizant of the macro challenges over the last 15 years, when 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 in order 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 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 aims 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 management actually began since 2012. In this respect, GPL failed to produce annual reports for the years 2012-2022; those ought to have been laid over in the National Assembly pursuant to Section 67 (1) of the Public Corporations Act (1988). Resultantly, it is difficult to independently scrutinize the work of this entity for that 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.

Synopsis of
financial performance
GPL’s operating revenue grew from a position of $29 billion in FY 2012 to $37.9 billion in FY 2022, representing an increase of $8.9 billion, or 30.74%. For the same period (using FY 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 FY 2012 to reach $81.5 billion in FY 2022, reflecting an increase of $33.6 billion, or 70%. Notably, non-current assets increased by $26 billion or 78% for the ten-year 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 was 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, which remained unverified to determine whether those were implemented.

GPL’s Development and Expansion Plans for the
period 2012-2025
Proposed development that was implemented based on the budgetary allocations in the National Budgets:

* 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 26MW
* 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 incidents of illegal connections.
* Two new substations built at Sophia and Good Hope, rehabilitation of and extension of transmission and distribution networks.
* Construction of Kingston Vreed-en-Hoop substations.
* Construction of Kingston Vreed-en-Hoop substations.
* Solar farm interventions, 33 MWs for Berbice, Essequibo, Linden
* 50MWs of firm generating capacity to boost short term needs
* 413km of new distribution lines and feeders; new 69kV 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.

Yours respectfully,
Joel Bhagwandin