Wartsila ‘seriously’ over-billed GPL for parts, service


Did the Bahamas Government do its research? And what does Shell North America has to say about all this???

By https://www.kaieteurnewsonline.com

BPL’s new Chairman Dr. Donovan Moxey

In the 1990s, the Finnish-owned Wartsila, a power company, came to Guyana to help reverse the fortunes of the state-owned power company.

The country had been saddled with years of power outages with its engines barely limping along.

Since then, Wartsila was granted contracts to managed almost 20 power engines for Guyana.

One of its biggest power plants is the 26 megawatts facility at Vreed-en-Hoop, West Demerara.

Wartsila had about 100 staff members, the majority locals.

However, two years ago, the Coalition Government ended the management contract of Wartsila.

A new, state owned Power Producers and Distributors Inc. (PPDI) was formed.

The staff members were retained and were given the contract to manage a number of the Wartsila engines of the Guyana Power and Light Inc.

Recently there were criticisms of PPDI amid a spate of power outages.

According to the company, in its defense and performance, it was established in December 2016. It entered into an operations and maintenance agreement with GPL to operate and maintain four of its power plants.

According to PPDI, operating companies like Wartsila Operations Guyana Inc. is by and large autonomous.

PPDI denied that ending the Wartsila contract would have seen a loss of managerial knowledge.

“…In fact, all the senior managers and technical personnel opted to remain with the state entity instead of Wartsila Operations Guyana Inc. The Wartsila subsidiary in Guyana was the first operations and maintenance company in the global Wartsila portfolio.

“Noteworthy, the model and way of working for such services was developed and exported to other countries worldwide by Guyanese – the local company was never managed or run by expats except for the first four months of operations.”

PPDI noted that the decision taken by the Government to not renew Wartsila’s Operations and Maintenance Contract mirrors actions taken by other governments and private power producers in the region as in the case of operations in Turks and Caicos, Dominican Republic, Antigua and Brazil.

“Moreover, the decision saves the country several million dollars in operations and maintenance fees, provides 50 additional jobs for Guyanese and allows unfettered access to our Guyanese engineers who were not always available because of secondments to other power plants in the region.”

PPDI insisted that the current contract that it has with GPL also provides greater performance guarantees than that which were previously offered by Wartsila.

“Maybe the letter writer should do some research into the operations of Skeldon Energy Inc. and find out what performance guarantees Wartsila is currently giving them and whether they are currently meeting them. You might be very surprised.”

PPDI also said that there were not a lot of discounts to Guyana benefitted from in the Wartsila arrangement.

“…PPDI wishes to state that there is hard evidence to prove that this discount is a myth. Rather there were instances of serious overbilling of parts and for other technical services. The Local Wartsila operating company had to follow the mandate of their network company bosses.

“It must further be pointed out that Wartsila does not manufacture all of the spares used on their equipment, but rather resells under their brand.”

PPDI said that its management has over the last two and half years managed to negotiate with major suppliers of Wartsila spare parts and other auxiliary equipment suppliers for long term supply contracts, supply contracts that have seen significant savings compared with the same parts offered by Wartsila.

“As insinuated by the letter writer we are not joining any queues for spares, or substitute parts; rather, all parts are certified quality original parts and maintenance is done on time every time.

In relation to the inability to handle design and construction of large new projects, such as the 300MW natural gas facility desired by ExxonMobil. PPDI is an operations company and does not engage in any design and development of equipment.”

However, PPDI said, it certainly has the capacity to be a valuable partner as the current team members of PPDI consists of the same team members Wartsila used.

“Some members of this technical team have a collective experience of well over 150 years in the electricity sector, nearly 100yrs of collective experience on Wartsila plants and equipment; were even used by Wartsila in the Caribbean, South America, Central America and the USA to manage and maintain plants and even worked on projects where new plants were built and commissioned.”

PPDI said it continues to be a valuable partner to GPL in the delivery of operations and maintenance services, and to invest heavily in training and capacity building.

“Since 2017 we have invested heavily in training and development of our team members and count over 9,000-man hours of training, both, local and overseas for our technicians and engineers.”