Grenada Private Power and WRB Enterprises vs Government of Grenada: Part 4.1

Compiled by Sandra CA Ferguson

Timelines re Grenlec and the Electricity Sector, 1960–2007

Part 4 is an attempt to map key events in the evolution of Grenlec and the electricity sector in Grenada in order to be aware of the political and economic context of the various periods and therefore, assist we the people in putting in perspective the actions and decisions taken by our various political administrations. The writer apologises for any inadvertent errors.

TIMELINE/EVENT	REMARKS
27 September 1960: Grenada Electricity Services incorporated – private company controlled by the Colonial Development Corporation, a statutory corporation established by the British Government.
28 September 1960: 1960 Electricity Supply Ordinance legislated
Exclusive Licence: Initial regulatory framework; Grenlec was granted an 80-year exclusive license for the generation, distribution, and transmission of electricity in Grenada including the outlying islands of Carriacou and Petit Martinique. Rate Setting: The rate making procedure for electricity consumption was set out in the First Schedule to the 1960 ESO. Penalties: There were criminal penalties for self-generation of electricity on the 3 islands unless authorised by Grenlec;
7 February 1974: Grenada attains Independence
13 March 1979: People’s Revolutionary Government assumes power and suspends the Constitution of Grenada;
1979: Grenlec is nationalised
October 1983: People’s Revolutionary Government implodes.
December 1984: The New National Party led by H A Blaize comes to office.
1985: Government of Grenada – USAID Grant Agreement^[1]; a conditionality of the agreement was the “development of a programme to privatise major state-owned enterprises”^[2].
2 February 1990: The Worrel Commission of Enquiry^[3] is set up.
The Worrel Commission was mandated to “to make diligent inquiries into the conduct and management and overall operations” of a number of statutory bodies including the Grenada Electricity Services Ltd. (Grenlec) that was then managed by one, Gregory Bowen. ^[4]All of these bodies were under the purview of then Minister of Communication and Works, Dr Keith Mitchell who had been removed from the position by Prime Minister Blaize.
The Worrel Report, released in March 1991, presents some most unflattering insights into the management of Grenlec during the tenure of Mr Bowen: He took management decisions without the prior approval of the Board of Directors. He did not adhere to proper procurement procedures, costing the company considerable financial loss. The report further noted in Chapter VII: “It is interesting to note the frequency with which the names of the following persons – Gregory Bowen, Denis Campbell, Keith Braveboy, Winston Gabriel – appear either as directors or employees of the statutory bodies and companies under my investigation and at the time I had cause to wonder if the national interests were best served. Another remarkable observation during the course of the enquiry is the failure of the authorities to refer to the police for investigating the disappearance of items from the statutory boards and companies with a view of instituting criminal charges.”
March 1990: General elections results in National Democratic Congress, led by Nicholas Braithwaite, assuming office.
1992–1994: NDC Administration undertakes a Voluntary Structural Adjustment Programme
5 April 1993: Intent to privatise Grenlec is announced by PM Brathwaite via address to the nation.
Planning and Policy Review Committee set up; Price Waterhouse Coopers engaged to advise on privatisation issues and to conduct a Request for Proposals (“RFP”) process for Grenlec’s share. Privatisation Sub-Committee set up to advise on all aspects of privatisation including public information; multi-stakeholder representation
15 September 1994: Privatisation Package Concluded: Parliamentary Approval: Electricity Supply Act 2014 and 2014 Public Utilities Commission Act passed Share Purchase Agreement 1994 signed
Shareholders: GPP purchased 50% of Grenlec’s shares for EC$15 million; WRB effectively controls 61.3% of Grenlec – 50% through its subsidiary GPP and the 11.3 % of the Eastern Caribbean Holdings; Other shareholders: GOG (10%), the National Insurance Scheme (11.6%), and various local individuals and Grenlec employees (17%)
Among the Provisions of the 1994 Share Purchase Agreement were: Exclusive Licence: Grenlec given an exclusive, 80-year licence for the generation and distribution of electricity in Grenada. Rate-setting: the formula by which electricity tariffs to be set; Repurchase Events: Government would be obligated to buy back the WRB shares if these events occurred; 1994 ESA Second Schedule Compensation: The procedure and formula by which compensation to WRB would be determined in the event of a buyout.
June 1995: General Elections; New National Party, led by Dr Keith Mitchell, returns to office;
Former Grenlec Manager, Gregory Bowen is appointed Minister of Communication, Works and Public Utilities; Constitutionality of Grenlec’s privatisation challenged by government; upon reelection, Government took the following actions:
(a) Commission of Enquiry: established the Piper Commission of Inquiry set up in November 1995 to investigate the sale of Grenlec	No Evidence of Impropriety: The Piper Report did not note any evidence of impropriety. Certain Provisions Not in Best National Interest: The Commissioners withheld any opinion as to whether the best terms were obtained by the Government re its shares in Grenlec. However, it was of the view that certain provisions of the Share Purchase Agreement were unfair to the Government and not in the best interests of Grenada.
(b) A Legislative Committee constituted to investigate its allegation that Grenlec was charging illegally high rates;	A Joint Committee compared Grenlec’s rates before and after privatisation. The Committee reported to Minister Bowen, via letter of 15 July 1996 from W R Agostini – It “was of the unanimous agreement of the members of the committee that the actual rates charged by Grenlec over the period investigated, did not differ in any significant or material way from the rates obtained from the application of the old formula.”
(c) declared that for procedural reasons, the 1994 ESA had never taken effect;	While ESA was passed in Parliament in September 1994, it had not been proclaimed into law. The Government challenged the ESA 1994 in the High Court. The Piper Report note that it was matter before the High Court, “therefore we must not comment further on it except to say that it has not as yet been Proclaimed into law”
(d) Government sought to renegotiate of various provisions of the SPA (including the purchase price for the Grenlec shares	Via Communication in 1997, Minister Gregory Bowen, the Minister responsible for overseeing Grenlec, warned WRB – “*renegotiation of the SPA was “not a matter of choice”* and that it had “always been the clear position of this administration” that the SPA was “neither legally nor morally binding on the Government of Grenada” because the Prime Minister of Grenada, who had signed the instrument of ratification “had no authority from Parliament” to sign it”. The WRB initiated arbitration under ICSID seeking an award compelling the GoG to repurchase the Grenlec shares for EC$18.7 million, calculated according to Second Schedule Compensation provisions – a capital gain compared with the EC$15 million purchase price.
July 1998 Supplemental Share Purchase Agreement^[5]: Settlement negotiations led to a Supplemental SPA of 1 July 1998 which confirmed the validity of the 1994 ESA plus other related relief. “The terms of settlement were confirmed by the ICSID Tribunal in an Award embodying the Parties’ settlement agreement that incorporated the Supplemental SPA and ended the arbitration proceedings.” Hurricanes were removed from the list of Repurchase Event of the SPA. GPP and WRB were released from their obligations re environmental cleanup of Queen’s Park^[6], “[i]n consideration of Grenlec’s expansion programme”
7 September 2004: Hurricane Ivan ravaged Grenada: considerable damage to the electricity infrastructure;
January 2007: At the 44th Meeting of OECS Authority in 2007, Heads of Government agree to a proposal to set up a regional, regulatory authority for the electricity sector to address challenges of electricity supply and improving regulatory framework.

^[1] The first state-owned enterprise to be privatised under this agreement was Grenada Telephone Company Ltd. (GRENTEL). Dr Keith Mitchell, Minister of Communication, Works and Public Utilities.

^[2] Report of the Piper Commission of Enquiry, pg. 3

^[3] The Commission of Enquiry was conducted by Lindsay Irwin Worrel and began its public hearings on 5 February, 1990. This Commission of Enquiry was appointed by Prime Minister Ben Jones, head of The National Party, the breakaway faction of the NNP, following a fallout between Prime Minister Blaize and Dr Keith Mitchell, Minister of Communication & Works, over party leadership. PM Blaize fired Dr Mitchell. Prime Minister Blaize died in December 1989 and was replaced by Ben Jones.

^[4] Bowen entered the political arena in 1995 and became the Minister of Communication and Works, in the New National Party administration of Dr Keith Mitchell following the elections of June 1995. He is currently the Minister with responsibility for Infrastructural Development, Public Utilities, Energy, Transport and Implementation.

^[5] ICSID Tribunal Award, para. 80,81, 82 & 83, pp. 32-33

^[6] ICSID Tribunal Award, para 82, footnote 74; pg. 32

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Tags: electricity gregory bowen grenlec h a blaize keith mitchell nicholas brathwaite piper commission sandra ferguson w r agostini worrell commission wrb enterprises

Comments 2

Anderson Farray says:

6 years ago

The people who has the power to solve problems that they has created in the past leaves Grenada with the simtoms of division of the economy due to the unique skills they got to influince governments with resources that they refuse to train and assist poor countries with instead of building economies globally, Grenada economy is vacuumed by bad abuse of power and democracy needs to get to work on the percent of shares the locals own in that company WRB With their carbon technology . There is enough natural and vibrant efficient economically cheap resources like the sun and wind. We are living in the modern time when technology is at its highest peak with solar power and wind power that can be set up and be distributed clean and cheap .
I THINK WRB should convert fron those carbon generators that is polluting the atmosphere and forget the large profit , now is the time to reduce electricity bills by 75 % from this ironic fear that cause poor people to unplug their refrigerators to try to save $100 on very little horsepower burned from house hold items .WRB should also take in front to transform and expand in technology for Grenada and don’t wait on governments who see the the changes needed to be made . Find a way to work for everyone and help not only to put food on the table but try to strengthen Grenada economy in this dreadful time of racial and social discrimination , COVID19, and poverty .Why in this modern time poor people salary is so small and their bills are so high .With knowledge ,skills, and freedom to govern your own power energy and a local university to train people. Grenada and Grenadians will start to come out of financial slavery and discrimination .
Time to shut down all fuel vehicles too and bring the electric and water cars and trucks. We all know that COVID19 is no respector of persons so let equality be for all .
Anderson Farray says:

6 years ago

Many countries in the west has their greatest investments such as factories , energy companies , communication companies and mining companies based in colonial countries just as how WRB is based in Grenada .
Where is our investments around the global economy ? And when is probably never .What will it cost is to grow and produce with the help of good will investment without monopoly in business for Grenada electric energy.
The bill for electricity on the island for consumption of electricity is shy high .
I think that 3/4 of the population has to be paid 3000-5000 US dollars a month to be able to afford to meet demands such as food health and utilities.
Technically, Grenada is deep in poverty and triple slavery through secret organization that leave local Government with all the problems to fight amongst the uncivilized population who they had brought through colonialism from the beginning to now and if the people choose to become civilized as they are by wanting to set up their own energy , they loose billions of dollars and many laws will change .