Opposition leader Ralph Gonsalves has issued a sharp warning regarding the operational and financial vulnerabilities facing St. Vincent Electricity Services Limited (VINLEC).
Speaking on Star Radio, Gonsalves criticized the government’s policy of forcing the state-owned utility to absorb electricity fuel surcharges, cautioning that draining VINLEC’s cash reserves threatens critical grid maintenance and long-term capital expansion projects.
Gonsalves argued that any relief or subsidy provided to consumers for high electricity bills must be funded directly by the central government rather than imposed on the utility. He disclosed that VINLEC paid nearly $800,000 EC last month alone to cover the government-mandated fuel surcharge subsidy.
Over the course of the six-month directive, Gonsalves estimated that VINLEC will suffer a financial loss of approximately $4.5 million EC. He warned that stripping the utility of its operational cash flow hampers its ability to leverage financing from regional and local financial institutions for essential development works.
Gonsalves highlighted that several of VINLEC’s core diesel engines are nearing the end of their 20- to 30-year operational lifespans and will require costly replacements. While mainland St. Vincent currently maintains an installed generating capacity of about 35 megawatts (MW) against a peak demand of roughly 25 MW, Gonsalves warned that this 10 MW headroom is deceptively fragile.
With electricity demand climbing due to expanding commercial developments and increased air conditioning usage, Gonsalves cautioned that the grid buffer could quickly disappear. He explained that if one engine is offline for routine maintenance and additional aging generators experience simultaneous faults, the utility faces a heightened risk of recurring power outages.
To illustrate current grid fragility, Gonsalves referenced a recent outage that left his residence without power from 11:00 PM until 2:50 AM, noting acknowledged maintenance challenges in the northern district of mainland St. Vincent.
Pointing to VINLEC’s required capital budget of approximately $100 million EC, Gonsalves outlined several indispensable infrastructure projects currently underway or urgently required:
Bequia: A new power plant project valued between $35 million and $40 million EC.
Union Island: Permanent replacement generation infrastructure following post-disaster makeshift installations.
Lowmans Bay: The planned Phase 3 expansion at the Lowmans Bay power station, which currently supplies nearly 49% of mainland St. Vincent’s electricity.
Gonsalves characterized the government’s utility directives as “amateur hour,” urging leadership to restore sustainable fiscal management so St. Vincent does not fall into the severe power rationing seen in other Caribbean nations.
