Power woes continue as we get richer

Dear Editor,

The PPP administration has proven itself to be completely clueless and wholly incompetent in managing the country’s electricity sector.

It has now been more than six years since the PPP returned to office, yet the power sector and its service to Guyanese has deteriorated at the fastest rate seen in the last two decades. Upon returning to office in 2020, the government sought to place all blame for the sector’s problems on the previous administration. Claims of inadequate maintenance and a lack of investment in generation systems were repeatedly made, despite being largely unsubstantiated. Those excuses may have been enough to satisfy their political base, but the familiar chorus of “it’s not us, it’s them” has done little to improve the performance of the state-owned power company.

Unlike the previous administration, the PPP has not faced constraints in accessing financing. Since returning to office, it has spent hundreds of billions of dollars with little to show for it from the power sector. The government has signed agreements with more than a dozen countries, including the United States, China, India, and the Dominican Republic. Yet despite having access to what appears to be virtually unlimited resources, the power sector is getting worse.

Over the past five years, the PPP has sourced generating sets from the United States, China, Finland, and Honduras. Some of these acquisitions were made under highly opaque circumstances. Nevertheless, the country continues to endure daily power outages. The PPP has also procured fuel from Suriname, Trinidad and Tobago, the United States, and several Middle Eastern countries through contracts worth billions of dollars annually. In addition, the government has leased two power ships from Turkey over the last three years. GPL is paying more than G$75 million per day for these vessels, yet citizens continue to suffer from unreliable electricity service. Despite these expenditures and many PR stunts, power outages remain a daily reality for all.

The excuses offered for the country’s electricity woes have been endless. At various times, blame has been placed on excavator operators, erratic donkey-cart drivers, climate change, the war in Ukraine, increased use of air-conditioning units, animals of various sorts, and of course, the previous administration. At no point has the PPP acknowledged that the state of the electricity sector is a direct consequence of its own incompetence, non-strategic management and questionable procurement practices.

Nothing better exemplifies the government’s ineptitude than the ill-fated Wales Gas-to-Energy Project. Hailed by the PPP as a “no-brainer,” the project has instead reinforced what many citizens already believe: that the administration lacks the skills and interest required to successfully execute major infrastructure projects. A lack of skills and competence is one challenge but what is even more problematic is the unwillingness to access the correct skills based on merit to execute the projects successfully.

In its efforts to justify the project, the PPP projected that the country’s peak electricity demand would reach 480 MW by 2026.^[1] Therefore, it cannot now claim that rising demand was unexpected. The government had six years to prepare. Yet in 2026, peak demand stands at just 256 MW, roughly 50% below its own projection made in 2021, to justify the urgent need for the Wales Gas to Shore project. Even at this significantly lower level, the PPP has failed to provide a reliable electricity supply. Setting a target and then failing to achieve even 50% of the required capacity to meet that target is the definition of failure. But why should we be surprised? Doesn’t this sound like another billion dollar project east of the Berbice River?

The crown jewel of the government’s incompetence is the Wales Gas-to-Energy Project^[2], which was presented as the silver bullet to solve Guyana’s electricity challenges. The PPP promised that once completed, the project would not only guarantee a stable electricity supply but also immediately reduce electricity rates by 50%.^[3] Launched in 2021 with a promised completion date of mid-2024, the project remains unfinished. More than two years after its promised completion date, it has yet to produce enough electricity to power a single light bulb. The latest information suggests that after more than two years of delays and cost overruns exceeding US$500 million, only 19% of the project’s originally promised output is expected to be available by the end of 2026. Even that target appears increasingly unlikely to be met.

Undeterred by its failure, the PPP has recklessly moved forward with a second Gas-to-Energy project. Without first demonstrating success on the initial project, and without releasing detailed studies to justify the investment, the government has plunged headfirst into a new venture that is likely to become an even more expensive failure than the first. It is therefore clear that Guyana’s electricity problems will persist for the foreseeable future.

The PPP has repeatedly demonstrated, through projects such as the Skeldon Sugar Modernization Project, the Fibre Optic Cable Project, and now the Wales Gas-to-Energy Project^[2], that incompetence and corruption continue to undermine its ability to deliver critical national infrastructure while Guyanese continue to suffer as though our GDP is still US$5.17 Billion as in 2019 versus the US$33.96 Billion that it is expected to reach in 2026.

Why should we be experiencing our worst experience from the electricity sector, when as a country we earn six times more??? No right-minded Guyanese would accept this from their family or their business, but yet our leaders march on with their full chest proclaiming development for some!!

References

1. A contextual Economic & Financial Analysis of Guyana’s Gas to Shore Project - Petroleum Management Programme — petroleum.gov.gy ↩
2. First phase of gas to energy project should be completed mid next year - Stabroek News — www.stabroeknews.com ↩
3. Gas-to-Energy Project to deliver 57 MW by yearend – PM Phillips - Guyana Times — guyanatimesgy.com ↩