Thu | Apr 19, 2018

Unwise to divest government’s stake in JPS now

Published:Friday | January 27, 2017 | 4:05 PM
Opposition Spokesman on Energy, Phillip Paulwell

Divestment of the government’s stake in the Jamaica Public Service Company (JPS) at this time would deprive the company the opportunity to maximise the expected increase in its assets, according to the Opposition People’s National Party (PNP).

In a release, Opposition Spokesman on Energy, Phillip Paulwell said the government’s latest proposal to divest itself of the 19.9 per cent stake in JPS, as alluded to in recent remarks by Finance Minister, Audley Shaw, is ill-advised and untimely.

“The transaction at this time would deprive the country the opportunity to maximise the expected increase in value of the JPS assets when the modernisation and energy diversification of the company is completed and the value of the full programme is being realised,” he said.

Paulwell said that while the timelines for the divestment and method of sale have not yet been disclosed, the JPS, which has assets of nearly US$1billion, and revenues of some US$760 million as at end of 2015, is now being positioned to increase its asset base, achieve energy efficiency and significantly grow its revenues.

He said the JPS’ proposed investment of more than US$230 million to build-out new generating capacity and the use of LNG as generating fuel underscores that situation.

Further, the current provisions, including a 20-year 190 megawatt power purchase agreement enjoyed by the JPS “reinforces our position that it would be foolish to proceed with the divestment at this time.”

Paulwell said that “while we recognise and appreciate the fact that the divestment would serve to broaden the ownership base of assets in the country, we urge the government not to squander the country’s assets on the whim of expediency, but to be guided by the cost-benefit analysis of the divestment.”

He added: “Importantly also, despite our reservations with respect to that divestment, we strongly recommend that in the event of a decision to divest, that every effort be made to ensure that Jamaicans are given the opportunity to acquire the publicly held shares in the company.”