‘Fip’ Motilall to receive US$12M if Amaila goes ahead

Original Amaila Falls developer ‘Fip’ Motilall will be paid US$12 million at the financial closure of the project and he has explained how it was that his company Synergy Holdings Inc and its minority partner Enventure Inc transferred the licence to Sithe Global – the developer since 2009.

He has also made reference to US law which requires that supporting documentation for a multilateral project has to be made public in the United States for at least 120 days before American representatives can vote on it. The IDB is due to vote on the project in October, and if the American representatives abstain, Motilall said, it would be difficult for the project to pass.

Motilall said that of the US$12 million that he will receive upon financial closure of the project, 30 per cent goes to Enventure Partners. “What remains – US$7 million plus – goes towards paying back the US$5 million I spent onthis job already, Harza Engineering, and loans I took from relatives,” he said.

‘Fip’ Motilall
‘Fip’ Motilall

This money is separate and apart from the US$5.8 million that he received from government for the partial completion of the road before his contract as the Amaila road contractor was terminated.

“It might be said that I have my own selfish reasons for wanting the project to go forward, but I spent 15 years of my life on it,” Motilall said. He said that this involved monies spent to build the original access road, and costs associated with environmental and feasibility studies in the late 1990s.

In answering critics about the licence transfer, Motilall said that the Hydro Power Act is clear on this. “When Sithe Global came on board and they were about to embark on this multi-million dollar investment to do the feasibility and environmental impact study of the project, their board required full control of the project. So they approached me saying that they wanted 100 per cent control. Right now Amaila Falls Hydro Inc owns 100 per cent of the licence. They want to be able to make decisions on the fly and they did not want a minority partner,” he explained. He said that at that time Synergy and Enventure had owned the licence on a 70/30 split arrangement.

“Upon Sithe’s insistence of being in full control we came to Government and asked that the licence be transferred,” he said, adding that this was in 2009.

He said that for all of the outlays he made and the loans he took, a mathematical calculation determined that the sum of US$12 million was a fair sum to be paid to Motilall.
US approval

Motilall sounded a warning about the project’s approval by the IDB noting that because of US laws, all of the supporting documentation must be settled upon and made public in the US for at least 120 days.

“The IDB board is to vote on the project in October. They have a policy which states that the finished deal has to sit on their website for 120 days and after that, then and only then the US contingent and representatives can vote,” he said. He was referring to the Nancy Pelosi Amendment which requires US directors of multilateral agencies to abstain or vote against any proposed action with significant environmental effects if it has not received the appropriate environmental assessment or if the assessment has not been available to the executive directors and the public for at least 120 days. “It is not that that cannot go to a vote, but if they go to a vote before the 120 days, the US will abstain. If the US – which controls 40 per cent of the IDB board – abstains, it will be very difficult for this to pass,” he said. He added this is so because Sithe Global is a US based company.

“We must get the US to vote for this project and the IDB needs to put on its website the documents as soon as possible. If August, September and October go by and they voted in November we still could meet this deadline,” he said. He said that on the environmental side, documents showing that the project would not damage the eco-systems around it must go up on the website for the 120-day period, while on the economic side, there must be documentation demonstrating that the Guyana Power and Light is able to meet its payment to the Amaila hydro company or the guarantee that if GPL does not pay, then the government as guarantor will cover GPL’s liabilities.

“From my understanding from talking to Sithe and talking to the government both sets of documentation [environmental and economic] must go in the site at the same time,” he said.
“Further, I think Sithe is very serious in what they said to the opposition. If the country cannot come to a consensus they will pull out. These guys do projects all over the world, they don’t want to be tied to any appearance of corruption,” he said.

“If the project does not close by December and the Chinese exercise their right for rate of exchange correction, which I think they will, that is another 10 per cent adjustment or an additional US$50 million based on the EPC price of just over US$500 million,” he said.

He said that based on the work done by Harza in the early years, the project is a well-engineered one. “This project is well-built… it is engineered by Harza. They built 80 per cent of the hydros around the world. They are the owners’ engineer on this project. So China Rail will have to follow the specifications of Harza, which will have people on site ensuring that it is built to specification,” he said.

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