Paying US$7.5M over three years just to improve GPL management skills is troubling

Dear Editor,

Your October 14, 2016 edition featured an article which states that Canada’s Manitoba Hydro International Ltd. (MHI) was awarded a three-year US$7.5M training, capacity building, and knowledge transfer contract with GPL.

My first thought was that this is a very costly contract, which if treated as an expense and recovered through electricity rates, will increase already astronomical rates by about US 0.5 cent per kWh, assuming GPL sales is about 500 GWh per year.

However, given that you have to pay for improvement, the question is exactly what type of service MHI will be providing?

The article quoted Chairman of GPL’s Board of Directors Robert Badal as saying “This programme is intended to build capacity of the GPL’s management and executives, capacity and competences in the area of international standards delivery of all managerial results in all functional areas, [and] implement best practices and international standards as it relates to the generation and delivery of electricity.”

The programme was also referred to as a Management Strengthening (MSP).

Editor, if Guyana is paying US$7.5M over 3 years just to improve management skills I would be extremely concerned. Recommendations to improve management skills can be done through a Management Audit, which is much less costly. If any utility-minded person would like a copy of a public Management Audit of an electric company in New York email me at vijaypuran@yahoo.com.

I hope the scope of work to be covered under the contract will be made available for public review, but I have a feeling Programme knowing how things are done in Guyana that this would be wishful thinking.

There is no doubt that there is need for systems improvement at GPL. Focus should be on adopting an accounting system that meets international standards; conducting a proper cost of service study to ensure that rates are designed properly; improving system protection to prevent collapse of the electrical system for minor disturbances such as a vehicle striking a transmission tower; developing a model for the transmission system so that the need for system expansion could be studied; accessing the system asset conditions to determine what improvements are needed to improve reliability and reduce losses; and developing an energy plan to serve the country’s needs including need for fuel diversification and renewable generation.

There is no doubt that the future of a country depends on its ability to satisfy its energy needs and to provide safe and reliable electric service at just and reasonable rates. Guyana has its work cut out for it in this area.

Yours faithfully, Vijay Puran, P.E.