EDITORIAL - How the gangs 'tax' energy

There is no surprise at the consensus among corporate leaders and technocrats hosted by this newspaper last week that Jamaica's high energy cost is a monumental drag on the country's economy.

At the US$0.30 per kilowatt-hour (kWh) they have to pay for electricity, the bosses held it is difficult, and close to impossible, for their firms to compete with their counterparts in the Caribbean.

Jamaican businesses need electricity at around US$0.10 per kWh if they are to be in the ballpark of competition. Our governments, present and past, agree.

Yet the gangs of Gordon House, the political parties that have alternated in running the country for more than half a century, have done nought about the tax, amounting to two-thirds of the cost of the power bills consumers pay.

We use tax here in the context of an entirely avoidable cost, which is borne without a concomitant good or service. This is the consequence of inadequate and bad policy.

All talk, no action

Look at another way, electricity in Jamaica is three times more expensive than what is required for a competitive economy, and what it could be because of the ineptitude of the country's governments. They gangs have talked long and hard about energy, but have produced little.

The decibel goes up during periods of high oil prices, as is the case at present, and during the oil shocks of the early and late 1970s, the early 1990s, and at the start of this century. Our governments, however, go quiet once the shock recedes. The gangs then go back to doing what they do best - looking out for the interest of themselves and adherents.

The upshot of this is that while Jamaica's output per unit of oil has improved only in the low double digits, in developed countries it has risen by upwards of 50 per cent.

We will be reminded that the current Jamaican administration has refined, and launched, an energy policy that was shaped by its predecessor. Jamaica has committed to liquefied natural gas (LNG) as the fuel of choice for electricity generation.

A task force led by Mr Christopher Zacca, an adviser to Prime Minister Bruce Golding, is overseeing this project. It has invited tenders for 480 megawatts of generating capacity based on LNG.

But Mr Zacca's task force has been proceeding with a lack of transparency which, frankly, we find disconcerting.

It may be that the Government is pursuing the right strategy and that Mr Zacca will deliver energy at US$0.10 per kWh, or lower. That we would welcome. The problem, however, is that the Government has kept the technical and economic information on which it based its decision to proceed with LNG close to its chest.

Some business leaders, including Mr Christopher Levy, the CEO of Jamaica Broilers Group, have advocated for coal, or maybe a mix of coal, LNG and other fuels. The Government may argue that Mr Levy, and others who hold that position, don't have all the facts. The public doesn't.

It is Mr Zacca's job to remedy this deficit and get on with the job, in partnership with key stakeholders, of delivering energy at a cost that gives the Jamaican economy a fighting chance.

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