Mr Fip Motilall’s transfer

Prime Minister Sam Hinds took exception to the lead story in Thursday’s edition of SN headlined `Motilall sold Amaila licence to Sithe’ which reported on the revelation at a public forum on March 11 of the transaction.

In a letter to SN and the Kaieteur News the PM said that the two newspapers “prefer to continue the innuendos about some sort of corruption and to be flippant about this tremendous development for our people and country, rather than to take the opportunity to educate our population at large, about what is a very common way in which big projects, such as the Amaila Falls hydropower project, get done”.

Why the Prime Minister would seek to suggest there was innuendo in the SN report about “some sort of corruption” is inexplicable. While we can’t speak for KN, the SN report was mainly concerned with reporting that Mr Fip Motilall of Synergy who has been associated with this project since 1998 had transferred his supposed labour of love to Sithe Global and that he would presumably be handsomely rewarded at some point. Indeed, the PM himself volunteered that Mr Motilall might have spent around US$10M on “development” of the project and depending upon the profitability of it the “pioneer would receive a multiple of his investment in cash and time”. Quite unusual for the PM to bat for Mr Motilall in this respect and moreso as he provided no details about the “development” of the project that Mr Motilall engaged in.

It may very well improve the Prime Minister’s argument, since he made bold to cite approximate sums of expenditure, to list in clear detail all of the efforts Mr Motilall made on behalf of the project and the rationale behind them. Moreover, he should confirm what elements of the original MOU Mr Motilall lived up to and what in this performance led to multiple extensions of the licence despite the lack of tangible progress on the project. Of course, it would have been much easier for Mr Motilall himself to provide such but he has avoided the media. In the absence of a fuller explanation, the transfer of the licence in 2009 represents a sort of finder’s fee being cashed out by Mr Motilall to Sithe. It is not the kind of transaction that anyone in this country should be thrilled about because we can be absolutely certain that Sithe – whenever it makes good on the monetizing of the transfer – will build it back into the project cost that the citizens of this country will have to foot.

Despite its opportunistic attachment to the low carbon economy, this government has dawdled on the urgent need to find renewable and greener sources of energy. By its own admission in PM Hinds letter, the government left a supposedly key platform in its energy drive in the hands of Mr Motilall since 1998. Thirteen years later, all that Mr Motilall can show for his purported development of this project is heavy weather building an access road to the Amaila site and which road he has since been instructed by the government to have work on it subcontracted because of the poor progress he has made.

By the PM’s own account Amaila was recognized to be an “interesting site for development” since the 1980s and Mr Motilall began pursuing that development in 1997, eventually sealing an MOU in 1998. From that point onwards Mr Motilall occupied the space assigned to develop this project and precious little materialized. Yet the government saw it fit to continue with multiple extensions of a licence until 2009 when Synergy acceded to a transfer of it to Sithe with the prospect of a handsome compensation.

Such dedication on the part of the government to inactivity on an important hydro venture jars with President Jagdeo’s enthusiasm for a low carbon economy. The delay in moving to a reputedly able developer like Sithe is either attributable to indolence on the part of the government or to some hypnotic hold on it engineered by Mr Motilall.

What this country needs is not the enlisting of investors to lock off important streams of development but persons of action who can either deliver within a defined deadline or bow out with grace and dignity.

If the government had really been serious about Amaila in 1998, 2005 or even last year, it would have dispensed with the services of Mr Motilall and invited the top hydro dam builders globally to the site for an inspection and presentation of proposals if any were interested. There would then have been no need for a discussion of Mr Motilall’s transfer of licence. That is what should have been done and that is what the PM should have been priming Go-Invest to do. Go get serious investors in hydropower for Guyana.

The tedious meandering of this project is a reflection of the unwillingness of the government to dislodge Mr Motilall from his perch for some unknown reason or the inability to attract a credible developer because the investment climate was not attractive enough and/or fraught with political risk. That is the conundrum the PM should attempt to explain.

The PM also drew a comparison between Mr Motilall’s participation in Amaila and the development of Omai Gold Mines Limited. It is an unfortunate disservice to the many serious prospectors and junior explorers who were engaged in this project and brought it to fruition.  The comparison was entirely inappropriate. The PM might have been on firmer ground had he evoked a comparison with another enigmatic investor who the PPP/C cultivated i.e. Mr Shivraj of the Buddy’s Hotel fame who upon being awarded multiple concessions and cash assistance by the government promptly turned around and sold the hotel to a Turkish investor for a healthy profit.

As if the prospect of a windfall for the licence transfer was not enough, Mr Motilall managed to subsequently secure from the government a lucrative contract for the access road through thick forest to the Amaila site that to this day he is unable to convince the  public he deserved to have. For months, the media and independent voices sought assurances from various government officials and spokesmen on the road building bona fides of Mr Motilall only to be pushed around and fed with propaganda. PM Hinds in his letter steered clear of this US$15.4M contract to Synergy which as many people anticipated has seen Mr Motilall falling very far behind schedule with serious questions being posed as to whether he will be able deliver an all-weather road. One hopes that an adequate and sound performance bond exists to cover the country in the event of a default.

As one of the key officials in the energy sector in 19 years of PPP/C governance, PM Hinds himself must shoulder the blame for the poor returns in energy diversification and greener sources of power. The present state of the Amaila project is ample testimony of this.