WINNIPEG -- Manitoba Hydro is making changes to one of its international subsidiaries, the Crown corporation announced on Tuesday.
In a statement, the corporation said it will reorganize Manitoba Hydro International (MHI) following an independent review of its operations. The reorganization will see MHI continue to operate as a subsidiary of Manitoba Hydro and the sections focused on technology solutions would still operate.
However, the international consulting portion of MHI will gradually be wound down.
“The comprehensive review determined that MHI was operating in higher-risk international countries that exposed Manitoba customers to potential liabilities, including security risks for employees and financial risks,” the statement reads. “It was also identified Manitoba Hydro customers effectively subsidized MHI through MHI’s use of Manitoba Hydro assets.”
Manitoba Hydro said MHI was created outside of the purview of the Public Utilities Board, due to operating in a global competitive environment, the company said, saying the structure was also to keep it separate. However, Hydro said the structure does not support the company’s commitment to transparency and accountability.
“The reorganization will further strengthen our governance, oversight and public accountability that Manitobans expect and deserve,” said Marina R. James, Manitoba Hydro-Electric Board Chair, in a statement.
Manitoba Hydro said existing contracts will continue to be honoured, and all permanent MHI staff will be offered employment at Manitoba Hydro.
“This timing of this decision made sense following our examination of the business realities, including the highly competitive nature of the industry and risks that come from operating the consulting business in international and developing markets,” Manitoba Hydro CEO Jay Grewal said in a statement.
“Today’s announcement brings an even greater focus to our core business while retaining access to and continuing to market the world-class made-in-Manitoba technology offered by MHI.”
Crown Services Minister Jeff Wharton also welcomed the decision.
“Prior to this review, our government was unaware of the risks taken with the operation of Manitoba Hydro International,” Wharton said in a news release. “As a major public asset, we want to ensure the activities undertaken by Manitoba Hydro are in the best interest of its owners—Manitobans.
“With this reorganization, Manitoba Hydro continues to strengthen its focus on their core business: to provide clean, affordable and reliable energy to Manitobans."
The Manitoba NDP said the decision will cost Manitoba Hydro money and lead to increased rates in the province.
“This is essentially a giant giveaway to the private sector and it is privatization by a different name,” said Adrien Sala, the NDP’s Manitoba Hydro critic, during a news conference Tuesday afternoon at the Manitoba Legislative Building. “What we’re seeing here is the government winding down an incredibly profitable aspect of Manitoba Hydro’s business.”
Grewal said the decision is not privatization.
“It still is part of Manitoba Hydro,” she said. “The model will continue, and all of the assets, the models, the technology, the capabilities will continue to be owned by Manitobans, not the private sector.”
