by Curlan Campbell, NOW Grenada
- Tribunal hearing in Washington DC scheduled for Monday, 17 June
- Arbitration tribunal filed by Grenada Private Power Limited (GPP) on 5 May 2017
- Hearing between government and GPP expected to conclude on 21 June
A tribunal hearing in Washington DC is scheduled for Monday, 17 June to decide whether the Government of Grenada will have to repurchase the 50% shares of Grenlec that were sold to the majority shareholder, Grenada Private Power Limited (GPP), and at what cost.
The arbitration tribunal was filed with the World Bank International Centre for Settlement of Investment Disputes (ICSID) by the Grenada Private Power Limited on 5 May 2017.
Grenada’s Minister for Infrastructure Development, Public Utilities, Energy, Transport and Implementation, Gregory Bowen and Energy Officer in the Ministry of Energy, John Ogiste, are expected to be present for the hearing. Grenada is being represented by the law firm of Debevoise and Plimpton in the United States and Seon & Associates in Grenada.
Minister Bowen said the necessary documents had been submitted and if the tribunal rules in Grenlec’s favour, the government is prepared to respect that ruling. “If the tribunal rules that we have to buy back the shares then so be it, but what I am very concerned about is the impression given to people that WRB doesn’t want to leave. If you do not want to leave why are you forcing the state to buy it back? Stay; the state has never asked you to leave.”
The energy minister is anticipating a quick resolution to this matter. “The hearing can be from anywhere from 6 months to a year and a half as the case may be but we expect a quick ruling on it and at any time the parties, just before the tribunal rules, the parties can get together and say we agree on something,” said Minister Bowen.
This move by GPP and parent company WRB Enterprises Inc. (WRB), was prompted by the enactment of the Public Utilities Regulatory Commission Act 2016 and the Electricity Supply Act 2016, which took effect on 1 August 2016. The utility company claims that the legislation had negative effect for Grenlec, including government’s effective abrogation of the Grenlec licence that the SPA parties committed to establishing as the central aspect of Grenlec’s privatisation in 1994.
The company also questioned the legality following an amendment to Section 20 Electricity Supply Act in 2017 which stipulates that 5% of the electricity company’s pre-tax profit must go to a Social Fund controlled by the Minister for Public Utilities and an appointed committee.
As a result, the company was moved to suspend its Community Partnership Initiative (GCPI) grant awards, which since 1994 has invested more than $22 million into various programmes and projects.
Grenlec indicated that in accordance with the specific repurchase valuation requirements dictated by the SPA and set forth in Schedule II of the Electricity Supply Act of 1994, the repurchase demand for GPP’s 50% ownership interest in Grenlec amounts to EC$176.65 million.
The hearing between the government and GPP is expected to conclude on 21 June.