N Touch
Sunday 23 September 2018
follow us
News

Shocking $612M loss

THREE years after the fact, Parliament has only this month received the annual report of the Trinidad and Tobago Electricity Commission (TTEC) for 2013.

That alone would be unsatisfactory were it not for the fact that the picture painted in the report is — to use an appropriate word —shocking.

For the year 2013 alone, TTEC reported a total comprehensive loss of $612 million. This was a somewhat better performance over 2012, when the loss was even more: $692 million. Improved performance or not, hundreds of millions are being lost at the State’s sole retailer of electricity and there are no signs of any meaningful let-up.

But the loss is not the end of the matter. TTEC has billions in debt.

According to the Administrative Report for 2013, debt to the National Gas Company (NGC) stood at $1.3 billion by the end of the period under review. The debt started at about $2 billion in 2012. In March 2014, a Parliament committee heard of TTEC having an overall debt of $2.5 billion to NGC, Trinidad Generation Unlimited and British bank HSBC.

The loss position, therefore, appears to paper over an even more unsustainable position for an entity which relies on the State to remain a going concern.

True, the TTEC outlook may improve given the fall of oil and gas prices. But the losses recorded should raise important questions about the need for self-sufficient State enterprises, balanced with the need to protect the interest of consumers and to cushion the economy from the inflationary effects of price increases.

The company has a history of loss-making: in 2007 it recorded a loss of $85.5 million. Just as we debate the fuel subsidy and foregone revenue caused by the abeyance of property tax, a serious discussion needs to happen in relation to the extent to which electricity should be subsidised by taxpayers. Should industrial customers be made to shoulder more costs so that more revenue is generated to allow TTEC to improve its operations? It is also important to note the $212 million loss came in the year of a crippling nationwide shutdown in power which triggered a national security alert. Indeed, though the cost of providing the country with electricity remains burdensome, there has been no concomitant improvement in the quality of supply. Blackouts continue to occur, as in December 2014, August 2010 and July 2010.

The 2013 blackout was blamed on a disruption from the sole supplier of natural gas: the NGC.

This alone points to the need for a more sustainable model of electricity generation which will be versatile and able to withstand the vagaries of one supply mode. Now is as good a time as any to discuss the generation of power from sources not related to the petrochemical industry.

The global movement for measures to tackle climate change and to reduce the role of oil has a direct bearing on this country.

Climate change will be one of the key issues taken up by Prime Minister Dr Keith Rowley at the Commonwealth Heads of Government Meeting later this week, as will energy initiatives.

TTEC’s importance cannot be over-emphasised. The provision of a reliable electricity supply is essential to transforming Trinidad and Tobago into a more developed nation. Not only was a gas supply problem the main factor in the 2013 outage, but manpower and technical problems also featured and it is hoped these have been satisfactorily addressed.

Meanwhile, we return to the question of why it has taken so long for the 2013 report to surface in Parliament. The delay amounts to a blackout of pertinent information.

This seems in line with TTEC’s history: a similar thing occurred in relation to the years 2001, 2002, and 2003. But the utility must do much better when it comes to shining a light on its operations.

Comments

Reply to "Shocking $612M loss"

News

Amcham’s Budget wishlist

They are Debt Management; Ease of Doing Business; Digital Transformation; Energy Sector Policy; Diversification; and…