ROBERT PICKERSGILL, who was at the time acting as head of the Government, told parliamentary colleagues last week that it was the administration, rather than Mirant, which holds the blade with regard to Mirant's plan to sell its 80 per cent stake in Jamaica Public Service (JPS).We confess to not being enamoured with Mr. Pickersgill's imagery, but we get the idea. It is an admittedly good position to be in.
The point Mr. Pickersgill was making was that as a 20 per cent shareholder in JPS, the light and power company, the Government has veto power over Mirant's capacity to sell and to whom it sells. Such a clause was placed in the partnership agreement of 2001 when the Government decided to sell majority stake in JPS.
In the face of concern whether the interest of Jamaica and Jamaican consumers will be protected in Mirant's move to off-load its JPS shares, Mr. Pickersgill sought to present the buffer clause as a prescient act on the part of the Government. And in a way it was.
Mr. Pickersgill, should be careful, however, of how he gloats lest he be reminded of the facts. One fact is that until Mirant's surprise decision, the Government was about to sell off its own shares in the company, through a public offering and listing on the Jamaica Stock Exchange. This would have had the value of helping to enhance private share ownership who were to be targeted, but it would have left the Government in no position of influence in JPS, except via the regulatory arrangements.
In the normal scheme of things, this newspaper would find nothing wrong with that, believing, as it does, that it is the responsibility of governments to establish the regulatory environment, leaving the private sector to get on with the business of business. That has proved the most efficient and productive way.
Except that in the current case, light and power is a strategic sector, critical to the competitive position of the Jamaican economy, and JPS, is, effectively, a monopoly. Moreover, Jamaica has among the highest costs of electricity in the world.
If it is assumed that in the context of Jamaica an electricity monopoly continues to be a preferable option, it is important that least-cost development of generating and distribution capacity in Jamaica be defined with an emphasis on the need to lower cost to consumers and on enhancing the competitive position of the economy. This will be a bankable commitment by the new owners of JPS to invest in the technologies, within a defined time frame, that will deliver on a clearly articulated demand.
In that regard, we expect openness and transparency on the part of the administration as it reviews any partner Mirant brings to the table, including public hearings on the options being placed before consumers.
