Eugene Hamilton, the Deputy Political Leader of the People''s Action Movement, exposed the Governments lies to the public on the recent Electricity Rate increases. Mr. Hamilton used the Governments own official Estimates for 2005 to show that the Electricity Department has been making surpluses on the operations since 2003. Therefore there was no need for Government to subsidize the electricity department''s operations. Government Lied!
Hamilton expressed the view that he believes that the real reason for the surprise increase originates from Governments plans to sell or privatize the Electricity Department. It would look a lot better, in any Prospectus for the sale of the Electricity Department, if the present value of the future income of the operations looked healthy.
The assets of the operations are primarily the Generators, the T & D lines and any items that are in stock and a cursory examination of those assets shows that Generators are of little book and real value because some are over twenty years old and the others that cost the country over thirty million dollars are no good. Hamilton supported his point by showing that the Government has budgeted $3.5m for loan repayment and also $6m for repairs to the same Generators. Given those facts any investor of note will conclude that the physical plant is in need of replacement and therefore of very little value.
He further supported his point by pointing out that Government was the largest income earner from the importation of petrol with a combined income from duty, consumption tax, and levy that exceeded both the importer and the retailer together. He further showed that in 2003 Government realized a $2.5m surplus from Electricity and a $10m surplus in 2004 if the Budgeted figures presented in February 2005 are to be relied upon. Further Government was projecting a surplus from the same Electricity Department of over $6m in 2005 and he called upon Government to give an undertaking that the so called interim increase would be removed in conjunction with a decrease in the world prices because the only beneficiary of lower prices is the heartless Government that would rake enormous profits from the levy also known as surcharge.
The recent sixty six percent increase is not about subsidies, as diesel prices are not subjected to the same levy as gasoline is and Government is therefore not loosing any income from it, but Hamilton explained that it is about misleading all citizens in anticipation of the sale of the department as well as the collection of revenues to offset the bribe that was given by the Prime Minister of $500.00 on the eve of the General Elections in October 2004.
The citizens of this country are being forced to suffer increased hardships merely to make the presale figures of the electricity department appear attractive and also for the Government to recover what was given as an election gimmick by the Prime Minister without proper authority.
Except for the Election bribe, price hikes per kilowatt of electricity has been implemented in other Caribbean Territories leading up to privatization of their electricity generation plants, which is why Minister Martin could so gleefully state that there were others with higher electricity rates in the region.
Privatization of Governments assets is an important undertaking and PAM believes that a Private sector led initiative would ensure that sale of the electricity department would result in the ordinary citizen becoming a shareholder rather than a friends and family undertaking that results in cronyism, corruption and fraud as has become the practice of the most corrupt Government in the Post Colonial Caribbean.
Mr. Hamilton was supported in his views by a former electrical engineer, Mr. Welsh, who gave technical insights into the purchases of the prototype generators and the efficiencies of operation, also did not agree with the rate increases. Mr. Welshs suggestion would be to concentrate on cost saving strategies and improvements in efficiency. His presentation underscores the point that the Generators are over priced and that we may have paid millions over that actual price a cause for investigation.
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