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JPS in financial trouble

  There are worrying signs that the country's main supplier of electricity, the Jamaica Public Service Company (JPS) is in financial trouble.

On Tuesday, questions were raised about the company's financial health following a statement in Parliament by Clive Mullings, Minister of Energy.

Mr. Mullings told the House that JPS owes the state-owned oil refinery Petrojam just under $6 billion.

Although a payment plan is in place for the JPS to reduce its obligations to Petrojam it is reportedly struggling to pay off its debts.

More evidence surfaced Tuesday evening that all was not well at JPS.

The Energy Minister who appeared on RJR's daily current affairs discussion programme Beyond the Headlines said there are indications that the power company is facing cash flow problems.

  "Looking at financial, there's nothing to indicate that they will be in a position to liquidate the position that they're in now but I can say that they have Caribbean and international holdings and the question is whether they're seeking financing to deal with their situation here in Jamaica or whether they have to divert cash flows from their international entity," said Mr. Mullings.

RJR News has been informed that JPS has been under financial pressure since its $2 billion pay out to current and former employees earlier this year based on a ruling handed down by the Industrial Disputes Tribunal.

Money owed to Petrojam will soon be paid - JPS

In the meantime, the JPS is promising to clear its arrears with Petrojam before the end of this month.

JPS is admitting that it has been struggling with its fuel bill which amounted to a whopping $37 billion between January and August.

This is a significant increase from the figure reported during the corresponding period last year.

JPS says due to recent unpredictable increases in the price of fuel there have been slight delays in the payment of its bills to Petrojam.

The company normally pays its bills 30 days after receiving invoices.

OUR to probe disconnections claims

  The Office of Utilities Regulation (OUR) will be investigating claims by JPS customers that the company has been disconnecting their power supply for unpaid amounts.

On Tuesday RJR News received calls from angry JPS customers in Portmore, St Catherine claiming that their electricity supply was disconnected.

This was later restored. 

Last Friday, the OUR said the JPS was barred from disconnecting customers who have outstanding balances arising from the slip-up in its billing cycle.

The order remains in effect until December 31.

David Geddes, the OUR's spokesman, says the instruction relates to those customers who received excessively high bills.

He says customers are still obliged to pay regular amounts on their monthly bills.

JPS seeking to offload some operations

  RJR News has been informed that Canadian energy giant Emera Incorporated is the entity being eyed to acquire some of the operations of the JPS.

Emera Incorporated is an energy and services company based in Halifax, Nova Scotia.

The company which has 570,000 customers in Canada already has ties in Caribbean.

The St. Lucia Electricity Services Limited is one of its subsidiaries and on Tuesday,  it acquired 25% of the Grand Bahama Power Company which is part owned by Marubeni.

Marubeni owns majority shares in the JPS.

Negotiations are in progress for Emera to take over JPS's distribution and transmission systems once it acquires a stake in the power company. 

The country first heard of the impending deal Tuesday evening, in an interview with Beyond the Headlines.

Mr. Mullings said the JPS would have to seek consent from the government, which has a 20% stake in the company, and the other minority shareholders.

"Even if they have these negotiations, if they don't get our permission then they would have some difficulty," he said.

According to Mr. Mullings, the negotiations between Emera and the JPS started earlier this year, however he was not sure when a deal would be brokered.

News of an impending change in the ownership structure of the JPS comes a little over a year after the Japan-based Marubeni Corporation acquired an 80% stake in the company.

The shares were acquired from Atlanta-based Mirant Corporation which was placed into bankruptcy.   

JPS works restive, say more money is owed to them  

  And the Jamaica Public Service Company employees have been placed on alert by their trade unions following the failure of the company to pay overtime and redundancy entitlements.

The money is owed under the Industrial Disputes Tribunal (IDT) award handed down in relation to a reclassification exercise conducted eight years ago.

The management of JPS is insisting that it does not owe the employees any more money but the unions are demanding the additional payments.

Clive Dobson, spokesman for the National Workers Union, says islandwide meetings will be held with JPS workers from Wednesday into Friday.

He warned of the possibility of strong action being taken by the workers.

"A decision is going to he taken as to what course we should follow and as soon as we get that mandate from our membership, we're going to proceed with it," he said.

 

 



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