‘A bungled project’

Dear Editor,

It would have been wiser if Prime Minister Samuel A Hinds, had just kept quiet about Synergy’s Mr Makeshwar ‘Fip’ Motilall, transferring his licence for the development of the Amaila Falls Hydro-Electric Project (AFHEP) to Sithe Global, rather than pen a back-fired missive taking umbrage with Stabroek News and Kaieteur News for their reportage on the licence transfer.

On August 1, 2010, Kaieteur News carried a lead story, ‘Guyana was to have Hydro Power from today,’ showing a hard copy of a Memorandum of Understanding signed on May 23, 2006 in the Office of the Prime Minister for Synergy Holdings to start generating power from August 1, 2010. The signatories to the MOU were PM Hinds, Guyana Power and Light Chairman, Mr Ronald Alli and Synergy’s Mr Motilall. KN went on to report that not only was the MOU discarded in favour of Synergy being relegated to building the road to the generating facility, but that “when asked about the MOU that he signed, Prime Minister Hinds said that he did not recall signing any such document given the fact that he signs many documents on a dailybasis. The Prime Minister further said the questions being posed to him were specific to the MoU which was not at hand; hence he was not in a position to provide answers. He then asked that the questions be forwarded to his office.”

Nine months later, he conveniently sees a need to defend Mr Motilall’s decision to transfer his AFHEP construction licence to Sithe Global? He pathetically defends the transfer as normal in business circles, but it is not even a matter of whether the transaction was legal or had met the most basic business criteria.

It is about his government’s utter lack of respect for the intelligence and right of Guyanese to know what the government is doing with their funds and resources, and not have Guyanese discover long after the backroom deals have been struck only to go awry in public.

Pay careful attention to paragraphs 3, 4 and 5 of PM Hinds’s letter, which SN converted into a news item (‘PM Hinds defends Motilall over the Sithe deal,’ May 13), to see how his detailed research on the history of Synergy being granted the right to build a power generating facility at Amaila Falls. Then ask yourself how on earth PM Hinds could not recall signing an MOU in 2003 for such a vitally important project.

This is the kind of in-your-face insult to a nation’s intelligence that stains his seemingly otherwise pristine political record and places him squarely in the fray of government’s disingenuousness.

But what is even more troubling, Editor, is that once the decision was taken in March 2010 for Synergy to build the US$15.4M road to the power generating facility, instead of the entire project, many people began publicly questioning Synergy’s road-building experience. Government ignored these concerns.

On October 4, 2010, SN carried a news story, ‘Synergy has seven years road building experience in Florida and Georgia,’ in which Mr Motilall told privately hired PR executive, Ms Cathy Hughes, his company was the “most qualified.”

He declared, “We’ve been building roads for 7 years now in Florida and Georgia,” and “what we are building here is no different than that.

It’s just a little bit larger in size. It’s just one road versus multiple sections.” According to him, the roads that his company built in Florida involved clearing virgin forest similar to this project.

But queries to the Department of Highways in Florida and Georgia revealed no such  record, and pictures of Mr Motilall’s Florida office showed he operated out of a mall where he had a store selling religious items, but whose address was also used as his office address.

In Guyana, his office was an unpainted, partly constructed building.

Ironically, the awarding of the road project was announced on March 28, 2010 by President Bharrat Jagdeo in his office, and he said the financing from the IDB and the China Development Bank of the US$450M project would not be a loan to the government but to the project.

The Inter-American Development Bank and the China Development Bank, he assured, have agreed to finance the US$450 million project; however, because of the importance of the project, the government was engaged in the arrangements to finalise the financing.

I don’t have the space to rehash the details of what transpired since the announcement, but suffice to say, this project, which may now be running between US$600M and US$800M, has seen more changes than the world’s fashion industry, and the recurring theme is this: lack of transparency.

It is as if this was supposed to be the nation’s best kept secret deal involving the nation’s resources and requiring citizens to pay for a product/service they have no detailed information on. How unfair!

And this is why the manner in which the transfer of the AFHEP licence from Synergy to Sithe Global has taken us all by complete surprise, because it was done during one of Sithe Global’s rounds of consultations that would help finalise an Environmental and Social Impact Assessment (ESIA) and close financing for the project. In fact, it was Sithe Global’s Senior VP (Development), Mr James McGowan, who told journalists and other interested parties last Wednesday at Hotel Tower, “I believe we acquired the licence from Synergy Holdings.”

He believes? Did he actually use the word ‘believes’?

He then added that, “Sithe Global and its affiliate Amaila Falls Holdings have since acquired 100 per cent interest of the project from Synergy.” First, it was Synergy, then Synergy and Sithe Global, and now it is Sithe Global and its affiliate Amaila Falls Holdings?

Where did Amaila Falls Holdings come from? And what role exactly will the Chinese be playing, since government helped negotiate a US$500M loan? We’re still waiting also on the WB for its findings on the AFHEP proposal.

Good heavens, this truly has to be the worst bungling of a major developmental project in Guyana, and no amount of damage control spin by President Jagdeo or Prime Minister Hinds or anyone of their subordinates can restore public confidence in government on this and many other ventures.

If the original deal still stands for the builder to assume the role of the owner and operator, and if the rates for consumption of power generated are set to allow the owner-operator to recoup or pay off whatever money was borrowed to build, then if the amount borrowed is anywhere near the US$600M to US$800M estimates, at the end of the day, this project could be a burden to the people of Guyana and the next generation of Guyanese consumers could be saddled with paying off this loan.  How the government could take such a worthwhile venture and screw it up can only be explained by looking at how the government itself is screwed up.

And Mr Motilall is still looking to be compensated after the project is completed!

Yours faithfully,
Emile Mervin

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