Mar 01, 2013 News
– Winston Brassington
The fact that the Guyana Power and Light Inc. (GPL) is losing money and requires subsidies from the National Treasury to sustain its operation, coupled with its struggle to meet the high cost of fuel, is a clear indication that the company can barely afford to pay a five per cent inclusive increase much less a union-demanded eight per cent across the board increase.
This assertion was made yesterday by Chairman of the power company, Winston Brassington, during a press conference in the boardroom of the entity’s Duke Street, Kingston, Georgetown headquarters.
The press conference followed on the heels of countrywide strike action by National Association of Agricultural, Commercial and Industrial Employees (NAACIE)-represented employees, which has affected customers in many sections of the country.
“The fact that we are offering a five per cent increase which has to be a part of the subsidies from Government, means that we are paying more than we really can afford, because we are not making the money,” Brassington stated.
Even in light of this state of affairs, he noted that GPL recognises the importance of its workers, and the fact that some level of increases would be expected. For this reason, he said that efforts were made to offer a reasonable increase package. He disclosed that the wage bill for the NAACIE-represented employees is in fact substantial, with the average cost per member being about G$1.7 million per annum.
Moreover, they represent an average cost to GPL of over $140,000 per month, which is in fact quite high, said the GPL Chairman who noted that “they may argue that they don’t see all of that…that some of it is NIS, some of it is allowances…but that is what it costs the company and that is our real cost for employing them… and it’s a significant number.”
NAACIE employees attached to GPL amount to about 700 individuals, thus the wage bill for this faction of workers translate to some $1.5 Billion, Brassington said.
“I don’t think any other state-owned entity or any other entity with comparable employees that would have a higher average wage bill for employees,” added Brassington, who revealed that GPL has significant amounts of non-salary benefits that also cost the company, and which contributes to the total wage bill.
Moreover, Brassington insisted yesterday that the ongoing strike action can only be considered as “unreasonable” even as he recounted that GPL has over the years enjoyed a good working relationship with NAACIE.
He, nonetheless, is optimistic that “in the next few days we will be able to amicably resolve our differences and all of the employees will return to work.” In his attempt to unveil the facts of the situation, Brassington related that GPL offered a five per cent increase, all-inclusive, to NAACIE, an offer which has been rejected, resulting in the strike action.
STATING THE FACTS
The GPL Chairman asserted that the offered increase should be taken against the background that in the last six years, substantial increases were paid to employees. He recalled that in 2007, a nine per cent all-inclusive package was offered and in 2008, 2009 and 2010, a six per cent all-inclusive package was made available.
In 2011, eight per cent was offered, Brassington added.
“These are significant amounts for GPL to pay,” the GPL Chairman stated, even as he reiterated that the finances of the company have not been doing well.
Brassington disclosed that the company was in receipt of a subsidy from Government to the tune of $6 billion. Initially a $5 billion subsidy was approved by Parliament and late last year it was increased to the former mentioned amount which was requested.
This was however not the first year that Government made available subsidies to the power company, as according to Brassington, subsidies were approved in 2008 and 2011.
In addition to that, Government has loaned GPL substantial sums for investment, all of which have to be repaid, thus, Brassington stressed, “GPL as an entity has not been generating the cash flow that it requires and is dependent on the treasury for subsidies for its operation and for its capital investment”.
This dilemma, he said, is coupled by the fact that oil prices have been rising, with increases being evident in 2007, 2008 and then in 2011 and 2012. As a result, GPL was forced to spend over $24 billion on fuel alone, representing 83 per cent of the company’s revenue, Brassington disclosed.
“So when we look at the increase we have to offer, it is against this background that every dollar increase that we have to offer has to be received as a subsidy from the treasury and you have to look at it in the context of what has happened to other companies in other parts of Government,” he added.
“Last year there was a five per cent paid to many parts of the Government sector, so our offer is not unreasonable; our offer is much more than what we can afford, and so today when we look at the position of NAACIE in striking, we believe that they are not telling you the truth about what our offer is and what the state of the finance of the company is…” Brassington also pointed out that every dollar put towards increases takes away from maintenance and investments.
IMPACT OF THE STRIKE ACTION
The impact of the strike action was especially felt in Essequibo where according to Chief Executive of the Company Bharat Dindyal, Leguan and Wakenaam were Wednesday without lights. As a result he said that “we are working feverishly outside of GPL to get the assistance of a contractor to operate there.” However at Anna Regina and Bartica, he disclosed that service was provided, although workers on duty Wednesday night in Bartica were permitted the day off yesterday morning with the understanding that they would have resumed work by afternoon. Anna Regina, however, has benefited from continuous service since the strike action, Dindyal said.
The generation capacity in Demerara was however not affected, as according to the CEO, “most of our generation in Demerara is coming from Wartsila. We have contract workers in Leonora and we have senior staffers at Versailles and Garden of Eden who are carrying on the operations.”
In Berbice on the other hand he said that GuySuCo has been providing a significant amount of the power and “we have a skeleton staff both at Canefield and Onverwagt providing service.”
Further, he said that contractors have been providing emergency services in both Demerara and Berbice.
Reports out of the Berbice area are that workers continued sit-out strike action outside the GPL Commercial Offices. Over one hundred employees, comprising linesmen, clerical and commercial staff, polesmen and transmission and distribution, were among those engaged in the industrial action.
GPL was sent a 28-day ultimatum to review the plan or the workers would take industrial action. This preceded a breakdown of talks between NAACIE and management of the power company a few weeks ago.
General Secretary of NAACIE Kenneth Joseph had disclosed that the workers were anxious to strike in a bid to force GPL to meet their demands. In fact, he had indicated that the union wanted GPL to respect the bargaining agreement and pay a three percent increase to the workers for 2012 and 2013, retroactive from January 1 of 2012. They are also asking for the increment increase for 2012 and 2013 to be paid.
This publication understands that no business is being transacted at any of GPL’s offices in Berbice. As a result there were reports that customers are rushing to the Bill Express offices to pay their bills for fear of being disconnected.
In Georgetown, too, the GPL’s main commercial office at Main Street, Georgetown, remained closed yesterday as disgruntled workers continued strike action. The employees guided by the Union downed tools on Wednesday and protested the GPL’s Executive Secretariat at Duke Street, Kingston rejecting the proposed increase.
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