NNP VS WRB Ltd.
This title has been carefully and deliberately chosen because this is truly what we have seen and continue to see being played out before.
This is not about the Government of Grenada (GoG) because government is a continuum and there was no issue with the NDC administration.
This is not about GRENLEC because that’s a local company with a separate and individual corporate identity and values. Grenada Private Power (GPP), a local company formed by WRB to do business in Grenada, is the majority shareholder of GRENLEC, made so under the NDC administration after negotiations between a willing purchaser WRB and a willing seller, GoG, for an agreed sum. The plain truth is that for decades now the NNP administration has held the Grenadian people hostage in this fight with WRB and all the fallout from this bitter struggle will be borne by us all.
There was good reason to sell the shares because we all realised that the vital service provided by GRENLEC was indispensable but the service was unreliable with frequent blackouts, very poor management, inadequate reinvestment into the company, poor staff morale and all of this due to the fact that most of the decisions were made on the basis of party politics and not business. If there was reason to blame the NDC administration, it could only be on the basis of whether the agreed sum and the other attendant conditions of sale were reasonable.
After 1995, it was the said NNP administration that further sold most of the remaining GoG shares to all and sundry, signaling their agreement with the concept of privatization of GRENLEC. For my part, I am of the opinion that WRB drove a very hard bargain and the GoG at the time was not in a strong negotiating position due to the state of GRENLEC at the time. I honestly believe that, as a result, some of the terms in the Share Purchase Agreement (SPA) and in the Electricity Supplies Act 1994 (the 1994 Act) were too heavily weighted against the GoG and gave too much leverage to GPP.
In 1995, Keith and his NNP won the elections, claiming that the price was too low, the terms were unfair and that the NDC was guilty of taking bribes in the course of the negotiations. Psychologists say that people usually accuse the other person of acts that they would have committed if they had been in the same position as the other person. Decades have passed but the NNP has failed to establish its conspiracy theory but has continued in an unrelenting vendetta against WRB, but despite all of this it is fair to say that our electricity supply has been very reliable over the years. However, the governing pricing and regulatory mechanisms have been the subject of much criticism over the years but given the terms of the SPA, the only reasonable alternative was for the GOG to repurchase the shares held by GPP and reshape GRENLEC.
The brilliant Keith Mitchell and Gregory Bowen (a former manager of GRENLEC when it was in shambles), have waited until the year 2016, after decades of investment and growth in the electricity sector to trigger a repurchase event under the very same allegedly“unfair terms” contained in the SPA.
The NNP were so advised when they contemplated the passing pf a new act in 2016, repealing the 1994 Act, that such action was highly likely to be interpreted in arbitration as a repurchase event in
keeping with the 1994 Act and the SPA. My view is that they did not care because in any event they were not personally liable for the compensation to be paid to WRB so they went ahead, hoping to justify
the action based on the need to lower the unit price of electricity and move to renewable energy.
I will address the two issues shortly. I have not seen a copy of the judgment from the arbitration tribunal but it is clear that the case for the GoG was roundly dismissed with costs which has led the GoG to
issue a very dishonest and misleading publication in an attempt to confuse the issues and pour some balm upon the NNP administration’s bruises.
Look at the clear and obvious deception and incompetence:
i. The NNP administration was advised before arbitration that it was highly likely the terms of the SPA would form the basis of the arbitration process;
ii. The overall loss on account of arbitration is in excess of $10 million because they refused to pay the sum dictated by the 1994 Act and the SPA, as requested by GPP, and did not even consider any
negotiations on the matter;
iii. The NNP administration could have considered the demand of about $63 million from GPP, tried to negotiate less, tried to discount the dividends and other factors, but they put the “cart before the horse”
by passing the 2016 Act and were scrambling to find the money to pay off GPP;
iv. It was GoG that forced resolution of the matter by arbitration and not GPP (WRB), given that they knew that it was a repurchase event deliberately caused by them and they were not in a position to compensate GPP;
v. The NNP administration has deliberately tried to mislead Grenadians, or else are very negligent, concerning the true cost to us as taxpayers since international currency is $US, meaning an award of EC$193,468,708.00 at the rate of 2.7.
vi. We then need to add the cost of the lawyers who have been working for the GoG on this matter for several years now. There is the firm of which our London High Commissioner is a part and then there is the legal team that actually presented the case of the GoG at the arbitration;
vi. This is no golden opportunity because we cannot escape the cost of over EC$200 million that this NNP administration has saddled us with since any new investor will seek to recover the initial outlay of
EC$200 million. This a very wicked and dishonest attempt to spin a devastating loss; blame WRB and lie about lower prices!!
The straight fact is that GoG cannot guarantee that the price per unit of electricity will be lower under any new arrangement. That issue was traversed at length and accepted by all parties during negotiations
between GoG, GRENLEC, and WRB/GPP which were facilitated by the government of the USA under the facilitation of the Rocky Mountain Institute (RMI) before the 1994 Act was repealed in 2016. At the first
session in Washington, WRB/GPP committed to working with GoG to deliver the best price to the Grenadian consumers and the plan was to continue collaboration with GoG to achieve this joint goal. When the second session was convened at the SGU campus in Grenada, Minister Bowen made it clear to WRB/GPP that the repeal of the 1994 Act would go ahead as planned and this led to a temporary walk out by the
WRB/GPP team from the meeting.
The facilitators succeeded in bringing the parties back to the table but the damage had already been done and any hope of any consensus disappeared. The meeting had lost its momentum because it was clearly an empty endeavour as any thought of even postponing the passing of the 2016 Act to pursue an amicable resolution was dismissed roundly, arrogantly and imperiously by Minister Bowen.
The NNP administration needs to stop talking about lower price per unit for electricity and show the Grenadian people how that is possible. Will the Chinese group buy out the Russian group, pay off WRB, produce oil and gas and use it to provide the lower prices? What is the plan? We cannot continue to be like blind people being led by persons who are clearly blind to the realities of life in Grenada.
These are people who have not been at all mindful of our sufferings and debt burden but have chosen to pursue a path of spite, victimisation, vendetta and ill will, all at the expense of the Consolidated Fund which we have elected them to manage properly. Our money is being used as the personal possession of Keith Mitchell and his group; they do what they want and we pay from our treasury.
This nonsense about how competition will drive the price down is a myth that has been perpetrated for decades now by Keith Mitchell and his group in order to justify removing the monopoly position of
GRENLEC and thereby WRB. Even the most elementary student of economics will tell you that meaningful competition depends on the type of endeavour and size of the market involved. We are talking about a very small market in Grenada in an essential service which heavily impacts on the conduct of business and the very way of life and livelihood of all Grenadians.
The only formula that can make any sense is a properly regulated monopoly since there is no room for more than one player, so to speak.
We must be reasonable, since business people invest money in a venture to make a profit, and not for philanthropy. So, why are we even listening to the garbage that is being offered to us by this NNP
administration to cover up their incompetence and their spiteful agenda?
Lower prices can only come in the short term by efficiency gains and even that will take some time to achieve since there must be an evaluation and correction process that is properly monitored and
supervised. Before passing on the assets of GRENLEC to a new entity, we need to have, as Grenadians, the following:
i. Full details of the entity proposed;
ii. Full disclosure of the due diligence that was done on all persons involved;
iii. Full disclosure of the plans of the new entity with a clear explanation of how the objective of lower unit price will be achieved;
iv. Parliamentary and public discussion on all aspects of the proposed change.
Green or renewable energy
The US government was proposing to use Grenada as a pilot project to show what was possible in the area of renewable energy, but the relationship with WRB was an obstacle that was in the way. That is the
reason why the RMI consultation was promoted and funded by the US in the hope that all parties would have been able to find common ground.
GRENLEC was fully committed to moving more and more over to the use of green energy and proposed a solar energy project but the NNP administration refused to cooperate in providing land to develop the
It is a fact that GRENLEC has been moving more and more into the area of renewables and even though the price per unit that is paid for energy that is being supplied to GRENLEC by private producers is rather low, in the overall scheme of things it is still a move in a positive direction and the issue can be better negotiated and regulated. The RMI consultations established as a fact that even a move to green energy does not guarantee a lower price per unit of electricity to the consumer and we all need to accept this and not allow ourselves to be deluded and distracted by that empty noise.
Lowering the price per unit is a lengthy and slow process that involves proper regulation, targeted investment that facilitates a transition that is as seamless as possible. Even if WRB is paid off tomorrow it will take some time and negotiation to arrive at a solution to our problem of high cost of electricity.
In closing, now that it has been confirmed that, according to law, the NNP administration, based on their own deliberate actions, must effectively acquire the GPP shares in GRENLEC, tell me, was the Governor General consulted in all this? Where is the declaration by the Governor General that the acquisition is for a public purpose?
Isn’t this yet another display of arrogance and ignorance by an aging and despotic individual with an inflated sense of self-worth and importance? Anyway, please hurry up and get her rubber stamp on the acquisition.
I am just trying to assist and the Don will not listen to me at all because, to use the words of his Minister of Health, even in the face of a national disaster and threat, “we don’t listen to activists”!!
That is, if you don’t agree with us, we don’t even want to hear what you are saying! Can you believe this? A servant of the people has decided publicly to shut up a member of the public in a time when we all are not sure of the best course of action! It sounds like Keith Mitchell’s, “don’t go there”!
Wake up Grenada! This is the character of the persons who are running our country!!
(Attorney-at-law Cajeton Hood served as Attorney General during the 2013-2018 period in government of the NNP administration of Prime Minister Dr. Keith Mitchell)