Do not sell JPS shares during an energy crisis Paulwell tells Gov’t
With the licence for the Jamaica Public Service Company (JPS) up for renewal in 2027, and amid rising oil prices, Opposition Spokesman on Energy, Phillip Paulwell, said now would be a bad time for the Government to sell its 20 per cent shares in the company.
Paulwell, who made the argument during his recent contribution to the 2022/23 Sectoral Debate in the House of Representatives, noted that the point has been raised that the JPS licence will come to an end in five years time.
“The government must use its greater leverage to effect certain changes early in exchange for concessions that the company will need to remain viable with new licenses under a more liberalised regime,” said Paulwell.
He added that: “These negotiations should start now and be conducted in great earnest to effect some of the changes immediately. The government has again announced that it will be divesting its 20 per cent shares in the JPSCo. We believe that the timing is bad as it is quite unlikely that the government would realise maximum earnings at this time of crisis. Indeed, it is precisely during a crisis that the influence of the government as a shareholder, with directors on the Board, can be used to moderate the natural urges of the business to safeguard itself (sometimes) at the exclusive expense of already burdened consumers”.
Paulwell told the House that the Opposition was also concerned about the method for divestment being contemplated.
“We note that even though the Wigton Windfarm was successfully divested, the stated intention of the government to expand and democratize the stockholdings in the country has not been achieved. Indeed, the anecdotal evidence is that after a few months of the IPO (Initial Public Offering), large investors were able to gobble up the shares that were originally earmarked for small investors,” he said.
The Opposition Spokesman, who has been opposing the sale of JPS shares by government since 2017 for various reasons, said a more creative way has to be found to divest government assets to allow for deeper and more long-term participation of the wider society.
“For example, employee share ownership (ESOP) options,” he said.
“In any event, now is not the time for the government to relinquish its influence on the Board of the JPSCo,” Paulwell added.
