GPL was paying above market rates for services by Wartsila

May 09, 2022 News

– former minister Patterson rejects claims that APNU used cheap spare parts to service generator systems

Former Minister of Public Works David Patterson.

Kaieteur News – Former Minister of Public Infrastructure, David Patterson said that pre-2015 the Guyana Power and Light was paying the German service company, Wartsila above market rates for some spares and that all of the maintenance of its systems was being conducted by local engineers, while the power company was being billed for overseas personnel.
Patterson made the comments as he responded to a press release by GPL. Patterson also defended the formation of the Power Producers and Distribution Inc. (PPDI)— a state-owned entity established in December 2016, which took on the maintenance of GPL systems. Since returning to government the PPP/C has sought to downsize the operations of PPDI and has handed back some of the maintenance of GPL systems to the German company.
Patterson’s response came some hours after GPL released a statement claiming, among other things, that the generation systems were being maintained with cheap spare parts under his watch. The exchange between GPL and the Former Minister comes even as the nation continues to experience a series of power outages.
In his written response, Patterson explained that Power Producers and Distribution Inc. (PPDI)— a state-owned entity established in December 2016 under (GPL) to maintain four of its main generation plants used original parts. He asserted that “As far as I am aware all purchases for parts by PPDI, were original spare parts, additionally the company ensured that all companies that they procured from, had a reputable quality system and were on the Lloyd’s of London approved list of manufacturers.”
The former Minster explained that the PPDI was formed after a comprehensive review was conducted of the Wartsila (Guyana) maintenance performance. During this review, he said “there was unmistakable evidence which highlighted that based on the company’s structure, GPL was paying above market rates for some spares and all of the maintenance was being conducted by local engineers, while GPL was being billed for overseas personnel and had a deferred maintenance schedule due to the lack of availability of staff.”
Further, Patterson said that in the period 2017 – 2020, there are no records of GPL raising any issues with the performance of PPDI but on the contrary, GPL was always in high praise of the service provided. The performance was so satisfactory, that by the end of 2020, the former Minister said that GPL and PPDI were in discussions on the expansion of maintenance services for other locations; Leguan, Wakenaam, Bartica, Anna Regina, etc.
”As a contract requirement, PPDI’s annual Operations and Maintenance plan had to be submitted and approved by GPL. This plan included among other information, the list of suppliers that PPDI was proposing to obtain spares from and there was never any objection to the parts suppliers by GPL,” added the former minister.
As an additional safeguard, Patterson said that GPL always had a representative on PPDI’s tender board. He asserted: “every tender for every spare part was in compliance with NPTAB’s regulation, plus it had the extra assurance of being scrutinized by GPL procurement department – to now claim the company departed from these established principles – is nothing more than new GPL’s tangled web.”
To buttress his assertion, the former Minister said too, that the PPDI’s procurement manual was also developed by now Junior Minister of Housing and Water under the supervision of Christopher Ram and later approved by the Public Procurement Commission.
Added to this, the former Minister noted the installation of the submarine cable linking Vreed-en-hoop and Kingston is one of the most absurd and myopic decisions by the pre-2015 GPL. This cable was installed at this location despite warnings from the maritime sector including the regulator (MARAD) as well as the local engineering fraternity.
This ill-advised installation has resulted in the company expending hundreds of millions of dollars in avoidable repairs. In typical fashion, GPL has responded by saying that the new cable laid between Vreed-en-hoop and Princess Street is of a lower capacity, hence cannot be considered a redundant cable – completely overlooking the most obvious question – why the original cable was not laid in this location in the first place? Since the alternative cable was laid, it has not suffered any of the breakage issues and downtime that continues to plague the upstream cable.
As such, Patterson noted that it should be no surprise that GPL is now blaming the almost daily power outages on contractors, which only signals the company’s lack of supervision and coordination. “The location of GPL’s Transmission and Distribution lines is known to all. Therefore, a simple monitoring scheme along these locations would ensure avoidance of these shutdowns. Having blamed others for sixty percent of our daily shutdowns, GPL remains silent on the cause of the additional power outages,” he said.