Mahfood urges Gov’t to sell JPS shares

Jamaica Manufacturers and Exporters Association President John Mahfood believes that the Government should consider giving up its shares in the Jamaica Public Service Company (JPS), the sole distributor of electricity in the island.

Marubeni Corporation and Korea East-West Power Company Limited now each hold 40 per cent of JPS’s shares. The Government of Jamaica retains 19.9 per cent, while the remaining less than one per cent is held by private shareholders.

Mahfood expressed his concern for the divestment at the Lions Club of Kingston’s virtual club meeting held on Wednesday evening.

In bringing more clarity to his views yesterday, he told The Gleaner that his “first position is that the Government should focus on things that relate to the needs of the people”, adding that state funds could be put to better use.

“[The Government] divested 80 per cent of JPS many, many years ago, and retained 20 per cent. Now, they are a silent partner as a 20 per cent shareholder. There’s no reason for them to lock up so much money in owning shares in JPS. It gives them no special rights or privileges and it doesn’t help the country,” Mahfood explained.

“The money that they could get from divesting their interest could be used for other purposes.”

Mahfood believes that by divesting its shares through the stock exchange, the Government would allow thousands of Jamaicans to own a piece of the JPS, which is a profitable company. In turn, the Government could use that money for more pressing matters, whether it is helping to fight crime or buying more useful equipment.

With regard to fears that the full privatisation of the JPS could cause electricity rates to soar even further, Mahfood said that this should not be a worry given that the JPS operates under rules and regulations and is monitored by the Office of Utilities Regulation (OUR).

He said that just as it is with private telecoms firms, the OUR would still be there to protect Jamaican consumers.

“The OUR is the organisation that protects us and watches our interest. The Government’s ownership in 20 per cent of JPS ... gives them no right to monitor the performance of JPS. It’s just simply an investment that is tying up cash,” he said.

At a Jamaica Chamber of Commerce Breakfast Conversation event, which was held at The Jamaica Pegasus hotel in New Kingston on Thursday, JPS President and CEO Michel Gantois stressed that if electricity theft was significantly reduced, the 100-year-old utility company would be able to realise more profits.

This could result in more potential dividends for shareholders.

“Unlike fuel, electricity theft is not a temporary or seasonal crisis for Jamaica, and it is local, under our control. It is the most pervasive and growing crime on the island, committed with impunity and receiving little attention,” Gantois said.

“For the past few years, the theft of electricity has accounted for 18 per cent to 20 per cent of all electricity generated. Think about all that expensive fuel we have burned to produce electricity that was never paid for. The theft of electricity cost Jamaica around US$200 million per year in fuel and lost revenue. We look at a conflict half a world away as one source of our energy problems, but we have a creeping war in our own backyard,” he stressed, adding that electricity theft was not just a JPS problem.

The company, he said, has invested significant money and time to better locate where theft occurs, conduct raids and audits, as well as working with the police to arrest crooks.

Investments have also gone into field testing and expanding social and community programmes.

ainsworth.morris@gleanerjm.com