GPL wallowing in $4.2B deficit

GPL wallowing in $4.2B deficit

first_imgMid-year report…cash shortfall linked to decline in rate collectionAs if the criticism it receives for countrywide power outages was not enough, a report from the Finance Ministry has revealed that the Guyana Power and Light (GPL) is in the throes of a $4.2 Billion deficit.A vessel that reportedly disrupted GPL’s cableAccording to the Finance Ministry’s mid-year report, this deficit— which was recorded at the end of June 2019— was attributed to a decline in sales collection. The report noted that there was a 61 per cent collection rate for government accounts. Actual billed sales fell below budget by three per cent.“In addition, there was reduced income from investments in treasury bills as well as from services provided by the company. These services include new connections, reconnections, tampering charges and service investigation”.“Total current expenditure amounted to $16.4 billion, $925 million less than the same period in 2018. Fuel costs were $1.4 billion more than budgeted, due to payments made in January 2019 for a fuel shipment received in December 2018, as well as fuel purchased and supplied to Skeldon Energy Inc (SEI)”.The report noted that both GPL and SEI have a working capital agreement and as such, the cost will be offset. In addition, it was noted that in the first half of the year, fuel rebate to customers was $2.2 billion or 13 per cent of local sales. This is a slight increase from $2.1 billion or 13.2 per cent of local sales in 2018.There is also the impact of repairs to their submarine cables. According to the mid-year report, GPL was forced to reschedule some of its capital projects as a result of these repairs. With all its challenges, the Ministry noted that GPL is expected to close the year with a $9.5 billion deficit.After persistent power outages, GPL had revealed in June that the 69kV submarine cable on the riverbed along the channel of the Demerara River, connecting its Vreed-en-Hoop and Kingston power stations was damaged.It was subsequently reported that a second GPL submarine cable was disrupted owing to another maritime accident that occurred four days after the disruption of the 69kV submarine cable. This 13.8kV submarine cable, which rests along the upper Demerara River within proximity of Craig, East Bank Demerara, was dislodged by a barge sailing along the Demerara River.As a result of this incident, West Demerara customers from Vriesland to La Retraite were without electricity while efforts were underway to alternatively power these customers from the Vreed-en-Hoop substation.last_img

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