NFP leader misleading the public, says EFL boss
7 July, 2019, 8:55 am
ENERGY Fiji Ltd CEO Hasmukh Patel has denied the claims made by National Federation Party president Professor Biman Prasad that EFL was misleading the public.
Responding to Prof Prasad’s comments, Mr Patel said the NFP leader had misunderstood the intent and purpose of his comments and unfortunately misconstrued it.
“I am not denying EFL is not making profit,” he said.
“In fact as a corporatised entity it is the expectation of the shareholders of EFL that EFL makes and remains profitable thus to provide best return to the investors.
“It is the duty of the management to act in the interest of shareholders and one of the key objectives is to ensure profitability.
“When I stated that EFL cumulatively lost approximately $100 million in six and a half years subsequent to tariff reduction; it is the statement of fact and I am not misleading anyone by highlighting this.”
He said the view that EFL made too much profit was a subjective view and not based on a balanced perspective.
“It must be noted, that, unlike FRA and WAF, FEA and now EFL, never received a government funding for its operations or funding to meet its capital costs.
“All its operations and capital expenditure funds have been, and must be internally generated by EFL.
“Lion share of EFL profit over the previous years have been reinvested to improve and increase the assets base and capacity.
“Therefore, one should understand and appreciate the business model of EFL which it operates under.
“We would like to ultimately bring the best service and reliability of electricity supply to all the people of Fiji.
“We cannot deliver this, unless we make adequate return on sustainable basis, unlike WAF and FRA, Government also provides several hundred million dollars each year to meet its operating and capital expenditure budget.
“Finally, please appreciate we are now a company acting in the best interest for all stakeholders.
“Just like any other private or listed company, we too have the right to make profits and the right of the shareholders to expect dividends.”
He said just because EFL was only able to deliver first ever dividends after 50 years of its existence, does not negate the fact that it has no right to seek tariff review permissible under the law.
“It is part of our fiduciary duty to act reasonably in the best interest of the shareholders.
“EFL is acting lawfully and in a socially responsible manner, considering it is not putting any pressure on taxpayers by seeking or requesting government funding. EFL is also borrowing now from a major bank without the government guarantee.
“People of Fiji should be proud of the success of a state owned enterprise that has been able to sustain itself rather than to be criticised for being successful or trying to maintain ongoing success.”