Bowen: Government ready for international case against Grenlec

June 17-21 is the date set for the much-anticipated hearing of an international tribunal to settle a grievance between the Keith Mitchell-led New National Party (NNP) government and the island’s sole electricity company known as Grenlec.

Minister of Energy, Gregory Bowen – government will repurchase Grenlec shares if the international court gives such a ruling

According to Minister of Energy, Gregory Bowen, the government and its battery of lawyers are preparing to defend its position on the decision taken by GRENLEC to enforce a clause in the contract for the administration to repurchase the 50% shares of the electricity company that was sold to Grenada Private Power Limited (GPP), the majority shareholder in the utility.

Relations have always been stormy between the NNP and Grenlec following the decision of the 1990-95 Congress government of late Prime Minister Sir Nicholas Brathwaite to privatise Grenlec as part of a Structural Adjustment Programme (SAP).

The arbitration tribunal, to be comprised of three judges, will be held under the auspicies of the International Centre for Settlement of Investment Disputes (ICSID) in Washington DC.
Speaking to reporters in St. George’s, Minister Bowen said that Grenada will be represented before the tribunal by the law firm of Debevoise and Plimpton in the US and its local affiliate, Seon and Associates on Lucas Street, St. George’s.

The senior government minister stated that if the tribunal rules in favour of Grenlec and ordered that the shares be repurchased the government is prepared to abide by the decision.

“If the court ruled, we have to do so. We always say that we don’t want to manage these companies, so we’ll give it to you (private sector), ask you to buy it or some other persons to buy it. It might reside with us for a year or two …but we want to regulate and see that the people benefit – we don’t want to own it and then regulate it. It would be easier if you (private sector) own and you regulate but that is not our philosophy – that is not our motto at all and we have made that abundantly clear”, he said.

The position as outlined by the Energy Minister is a shift from the position once articulated by Prime Minister Mitchell that the sale of Grenlec under Congress was the “worst deal” ever and that he would like to repurchase the shares sold by the state to the company.

According to Minister Bowen, the cost of the shares has already been determined by PriceWaterhouse but declined to disclose the figure due to legal considerations.

When asked if he was confident that the government really had a case against GRENLEC, Bowen said: “Certainly, from what we look at and from what we (are) understanding I believe the other side also believes they have a case, but when you talk about these arbitrations and things, I have been there before, you never know what the three judges will say and there is also a time for appeal.
“…We do have a case and not only a case but a right and we have an obligation to defend this country against, you know what is happening …if we do not get our energy sector correct, any development that we are making now, will go to naught”, he added.

Minister Bowen also made mention of another thorny issue between Government and Grenlec regarding the use of monies from the Social Fund which is currently pending in court.
GRENLEC has challenged the legality of the 2017 amendment in Parliament to the Electricity Supply Act which mandates the electricity company to give 5% of its pre-tax profit to a Government-controlled Social Fund.

Until this matter has been resolved, GRENLEC took the decision to suspend its Community Partnership Initiative (GCPI) grant awards from which many organisations and activities were the beneficiaries.

Minister Bowen said the date for this matter is yet to be announced but government is pushing forward with its position on the issue.

He said: “Our matter is that the people should pay with a social fund and if the people are paying for it, you GRENLEC, you can’t control it. If you wish (as a) Corporate Social Responsibility to continue with your fund, do that. Government has one person on the board, you have three or four, you could then tell government I don’t want you on the board – we don’t have a problem because that is your money, your corporate responsibility but if you say you want this thing to be explained, we just go before the court and explain it. The people will pay for it. Right now they have stopped, but we knew they would stop…it must continue.

“… So, since it (the money) would not come out from your profits, your monies, they’re saying that we’re saying we’re going to take 5% that is (the) quantum that we put aside every year. We’re saying that same quantum, whatever it is, the Public Utilities Commission will say your rate is 5 cents per unit but you pay 5.1. What is your point one cent for to bring into this fund for social fund? Who should control this point 1 cent – it has to be the state and then you put it under the Public Utilities Commission.

“GRENLEC can continue with theirs (GCPI) – you make your profit, put your 5% of profit and give to the people. If you don’t want to do it, stop, but the effect is that if you stop, bodies and organisations will be looking for something to continue on, but that is there from the people’s money.

“If you (Grenlec) want to continue with yours, we will just have more to give to organisations, so even if you go to court and the court say retract this law, it is not too clear, we will do it because we’re telling the court our intention, we have told GRENLEC our intention…”, he added.

Bowen is a former General Manager of Grenlec when it was under state-control during the 1984-90 period of the first NNP government of late Prime Minister H.A Blaize.

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