Nothing as claimed is moving full speed ahead with the Amaila hydro project

Dear Editor,

As reported in SN of October 31, the Government stated that “preparations for construction of the Amaila Falls Hydropower Project (AFHP) are moving full steam ahead with steps being taken to procure key services.” The progress made thus far suggests otherwise as key benchmarks are yet to materialize.

Financial closure, the key element to get this project started is still in the doldrums. Earlier this year the Government stated that a significant loan would have been made available by the Inter-American Development Bank (IDB) in July but this date was later changed to September. With no firm financial commitment by the IDB in sight, Sithe Global, AFHP Financial Coordinator expressed concern that without a substantial financial component from the IDB financial closure of the AFHP will be difficult to achieve.

In a SN Article of Oct 23, the IDB Country Representative in response to questions clarified the Bank’s procedure in providing finance for this project. She clearly stated that IDB had started a due diligence process for the AFHP which will finally determine whether or not the Bank finances the Project. Further, a decision will only be made after Sithe Global provides the IDB with a feasibility study on AFHP to enable its Specialists to review and appraise the project from many perspectives to determine its economic and financial viability. In other words AFHP has to show that it can generate enough revenue to service its debt, grow the economy and not become another Government ‘sinkhole’ like the Skeldon Factory.

The mandated Feasibility Study which the Bank’s Specialists will review to ensure that Guyana’s limited resources are put to their best possible use will be the hallmark on which the IDB’s Board of Directors make their decision as to whether the AFHP qualifies for a loan and this crucial decision can very well go one way or the other since AFHP perspectives to be examined will include GPL’s management, technical capacity and its ability to reduce electricity losses from thefts and system inefficiencies. This has been a tall order for GPL to achieve over the years as GPL’s customers from Lethem to Upper Corentyne can attest to its continuous poor performance in these areas.

Therefore no firm commitment to finance AFHP is likely under five years while certain assurances may have to be complied with before loan disbursement if any is made.

The access road to the AFHP construction site should have been completed nearly two years ago and is now unlikely to be completed before Yr 2014 given the number of bridges to be built and a complex segment of the road finished in Section 7 (from the Kuribrong River to the AFHP Site). Unfortunately the access road now under construction is useless without completion of the Kuribrong Bridge/Section 7 to get materiel to site and the tenders to construct this Bridge was only opened a few days ago. Therefore by the time an award is made and construction of the Bridge/Section 7 completed and becomes operational, it will be Yr. 2015 given the Government’s penchant for generous time extensions to contractors.

Finally, it appears that the Government has not finalized what AFHP including Power transmission to the coastland will cost and where the money will come from. Because of this vagueness they have no idea of the AFHP construction starting date and when it will be completed and nothing as claimed is moving full speed ahead. They probably should be forthright and just say that AFHP is evolving and they are taking it one day at a time.

Yours faithfully,
Charles Sohan

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