BASSETERRE, St. Kitts, April 3rd 2011 (CUOPM) – St. Kitts and Nevis Prime Minister Hon. Dr. Denzil L. Douglas said Friday that the corporatization of the St. Kitts Electricity Department is in keeping with the privatisation policy of his Government and at the same time completing a similar attempt by the then PAM Administration in 1993.
He said the new entity will take over an asset-based facility that will lead to an efficient and reliable service to consumers and eventually locals purchasing shares in the company.
Speaking in the National Assembly Prime Minister Douglas before the lawmaking body gave its approval to the St. Kitts Electricity Services Act, Prime Minister Douglas said criticism by the opposition People’s Action Movement (PAM) of the privatisation of the electricity services is hypocritical as the previous PAM Administration in 1993 enacted legislation to the parliament to privatise and sell the electricity department to a foreign-owned company.
“People in La Valle, Sandy Point had no electricity when we took office in 1995. It took this Labour Government in 2000, to provide electricity service to those residents for the first time,” said Prime Minister.
“When we were being told in 1993 in the Parliament that electricity rates were to be increased 500 percent at the time, the (PAM) Government of the day was borrowing EC$21 million to place electricity on the Southeast Peninsula for sheep, cattle and goats to see their way over there, but people in the villages of La Valle, St. Paul’s, Saddlers, Shadwell and other areas could not see their way,” Prime Minister Douglas told the Nation and the National Assembly.
He reiterated that his government is today now completing the failed attempt by the then PAM Administration in 1993 to privatise the electricity services in St. Kitts.
Although the Act was passed, it was never operationalised by the PAM Administration.
“They failed because the country was not ready for it. We are ready for it because we have prepared the people of this country for it,” said Dr. Douglas, who noted that the process of privatization of the electricity services started some six to seven years ago with the unveiling of his Government’s privatisation policy with the establishment of the Privatisation and Commercialisation Unit in the Ministry of Finance.
“It was given the mandate first to commercialise some of the government services and to privatise or liquidate those shares that government had in private companies and where there were public corporations to advance them to totally private companies,” said Prime Minister Douglas, who quickly pointed to the privatisation of ZIZ Radio and Television, which is today a private company owned by one shareholder – the Government – but run by a private board headed by a chairman.
“That is what will happen today when this bill (St. Kitts Electricity Services) is passed in this parliament. There will be a legal right for the electricity services to become a private company with one shareholder now – the government and eventually the people of St. Kitts and Nevis through the purchase of shares and own the electricity services,” said Dr. Douglas.
He admitted that people are disgusted with the present level of service from the electricity services and highlighted his government’s selling its shares in Cable & Wireless, which were later sold to locals.
“It is a process of government’s policy being unfolding. We advised people when they were getting their severance pay on the closure of the sugar industry to purchase those shares and invest in Cable & Wireless. We said we wanted to create an atmosphere and an environment where at least in every household persons were owning shares in businesses to change the culture of slavery and empowerment of the masses,” said Prime Minister Douglas.
“What we are seeing today is part of the government’s policy of improving the services that are being provided from these entities. The electricity services will be improved. There will be increased efficiency in operations. The people of this country are demanding greater efficiency of services,” said Prime Minister Douglas.
Under the Privatisation and Commercialisation Unit in the Ministry of Finance the Central Marketing Corporation (CEMACO) has been sold to two local entities.
The Prime Minister noted that the opposition is critical of the government for its expenditure on the purchase of new generators but refuse to give critical support to the privatisation of the service.
He gave the assurance that with the privatisation of the service, the rates will not increase 500 percent as was planned when the PAM Administration passed legislation in 1993 to privatise the service and sell it to a foreign company.
Dr. Douglas said his Government had made it clear during the Budget debate that after the recapping and removal of the surcharge that if ever it had to be reintroduced it would be set at zero and it will depend upon the movement of the price of fuel.
He gave the assurance that privatisation will result in “greater efficiency, a better regulatory system, improved internal control, better financing, greater transparency and accountability.”
“There is no question that a lot of the inefficiencies we see today are expected to end,” Dr. Douglas told the National Assembly.
Prime Minister Douglas who is also Minister of Finance said that with the corporatisation of the electricity services, there will be no financial burden on the Central Government.
“There will be lower receivables and the payment abuse will not be there. Connections will be more efficient, less bureaucracy and there will be greater speed of operation. We are not saddling the new company with old generators. Four brand new and highly computerised generators have been installed and we are saying take them, take over the debt and let the government be free of these encumbrances,” said Prime Minister Douglas as he thanked the Minister of Energy, the Hon. Earl Asim Martin; Attorney General, Hon. Patrice Nisbett; the Ministry of Finance; the Ministry of Energy and the present workers and those who will be employed by the new local company when the vesting takes place.
The Bill was passed early Friday evening.
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