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EDITORIAL - The truth behind high energy costs

Published:Saturday | October 25, 2014 | 12:00 AM

It is something of a cruel joke for Prime Minister Portia Simpson Miller to stand in front of an audience in 2014 and declare that high energy costs are the single, greatest deterrent to the country's economic growth.

Where was the prime minister when private-sector voices were expressing this concern and pointing to the obvious benefits of growth, competitiveness and job creation? Where was the prime minister when several manufacturers pulled down shutters and relocated their plants to countries in the region where fuel was cheaper? And where was Mrs Simpson Miller when her Cabinet colleagues botched divestment of the Jamaica Public Service Company by hiving it off to an Atlanta-based corporation which had no plan for improving efficiency or energy-sector expansion and development?

At US$0.40 per kilowatt-hour (kWh), Jamaica is in the throes of an energy crisis that is being felt by businesses and householders alike. Even when the world market price for oil is trending down and Jamaica is receiving concessions via the PetroCaribe Fund, electricity costs continue to dig a deep hole in everyone's budget.


We submit that high and inefficient energy supply has been a threat to economic growth for decades, and the response by Mrs Simpson Miller and her colleagues has been feeble, if one were to be charitable.

Addressing an International Monetary Fund (IMF) conference in Montego Bay earlier this week, Mrs Simpson Miller gave her assurance to the IMF bosses that the Government was addressing the matter of high energy costs.

So the question is this: What does it take to create a national response to an age-old problem which has proven inimical to Jamaica's economic development? For one thing, it requires solid leadership. And that is the nub of the problem, for Mrs Simpson Miller has kept in place a minister of energy who has, over time, exhibited a worrying disregard for systems and procedures. His role in the recent bidding process for a 380-megawatt power plant was roundly criticised for lack of transparency and ministerial interference.

The response to that fiasco was that the project was taken away from Phillip Paulwell and outside of Cabinet and placed in the hands of Dr Vin Lawrence, an engineer, and former head of the Urban Development Corporation (UDC), who really has no public responsibility to the people of Jamaica since he was not elected to office. In that appointment, the prime minister appears to have simply substituted weak ministerial management with technical know-how.

Many may also remember that it was under Mr Paulwell's watch, too, that nearly $200 million was disbursed to a little-known IT company called NetServ without proper due diligence being conducted. Crucially, Mr Paulwell projected that NetServ would provide 40,000 jobs over three years. History will show that the company collapsed and it didn't provide one job. In this instance, the minister displayed a surprising naivety, he being an attorney-at-law.

With that kind of track record, it will take a great deal for Mrs Simpson Miller to convince us that her Government is serious about reducing energy costs and has accorded priority to the sector.

When that is matched against the fact that the development of energy alternatives such as wind and solar power is limping along ever so slowly, the implications for Jamaica's development are not in the least encouraging.

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