Ramjattan: `We are still uncertain about a number of things, like rates coming down, losses coming down and so on’
Following emergency meetings among Government MPs and members of the Opposition on brokering an arrangement suitable to all sides, the House on Wednesday and early yesterday morning passed both the Hydro Electric Power Amendment Bill and a government motion aimed at raising the loan guarantee ceiling for public corporations.
The end of the marathon session marked the commencement of the parliamentary recess from now until October.
As part of the ‘horse-trading’ in Parliament, Government and the Opposition agreed that after the House voted on the return of the two Amaila measures into the business of the Order Paper, they would join the queue to be debated after the raft of legislation concerning Local Government Elections.
The Amaila matters, one dealing with the reserve area around the hydropower site and the other addressing loan guarantees for public corporations, were resuscitated after a ground-breaking application on Wednesday by Prime Minister Sam Hinds before the National Assembly. Bills and motions that have been voted down cannot be brought back in the same parliamentary session but Speaker Raphael Trotman on Wednesday permitted it to go to a vote because of the importance of the matter and the Alliance For Change sided with the ruling PPP/C for both matters to be presented again for debate. APNU voted against bringing back the two matters.
At this point, APNU and the AFC then insisted that the business of the sitting be re-ordered to allow the four local government bills to be addressed first. The PPP/C then sought time to discuss the request and subsequently agreed that the local government bills would be debated first.
Following the debate and passage of the four local government related Bills, the debate began on the Hydro Electric Power Amendment Bill, with Prime Minister Sam Hinds extolling the benefits of the proposed 165-megawatt scheme.
Prime Minister Hinds declared that the controversial and hotly-debated Amaila project was worthy of the unprecedented move in Parliament yesterday to revisit the two matters.
He said that government was surprised about the developments which led to the July 18 rejection of the two matters when they were first brought to the House.
Hinds said if Amaila does not go forward Guyana could lose the money made available through the Norway-financed GRIF forest fund. He said that the deadline for this is November.
He added that Government is prepared to forego its return on equity in order to keep the cost to the consumer down.
In his wrapping up of the debate, he said that Government has taken cognizance of the concerns of the Opposition and other stakeholders and has been planning with these concerns in mind. He said that plans are in train to have an arrangement with the Brazilians to have in about ten years from now another hydro facility as part of a network. He said that while there is concern about Guyana’s capacity possibly outgrowing the rated capacity of Amaila, such an eventuality has been borne in mind.
APNU MP Carl Greenidge, speaking after PM Hinds, maintained that his party could not support the bill despite the PM’s explanations about the benefits the completed Amaila Hydro Power Project would bring. Greenidge stated that his party could not support the bill for a myriad of reasons.
Among those reasons Greenidge said was the fact that APNU, based on information provided, was not fully convinced that the project would lead to a reduction in power tariff levels.
He also said that the party was not convinced that the financial size of the project would not increase, and added that scepticism concerning the Guyana Power and Light Inc.’s (GPL’s) ability to efficiently perform were also among their concerns.
Greenidge said that Hinds had conflated the cost of generation with the cost to the consumer and pointed out that these are two different things.
Greenidge added that the Inter-American Development Bank (IDB) – one of the intended financiers of the project – did not give an assurance that the price to the consumer would go down. He criticised government on the cost of the project and blamed the financial architecture.
He contended that the burden of the transmission and distribution network for the project is causing it to increase in cost. He said Government should have examined a different financing arrangement for the project. He added that government participation on the board does not reflect the equity that government put in. He also expressed disappointment with GPL in terms of losses and said an intended US$10 million project by the IDB could not bring losses down.
Following the passage of the Bill with a number of amendments that Hinds had proposed, Minister of Finance Dr. Ashni Singh led off the debate on the motion on the debt ceiling.
The Minister’s motion called on the National Assembly to approve the aggregate amount of the liability of the Government under section 4 (1) of the Guarantee of Loans (Public Corporations and Companies) Act, in respect of guarantees given under section 3 of the Act, and that this guarantee not at any time exceed $130 billion. The Minister’s motion also made the arrangement specific to the GPL and Amaila.
“Provided that this amended aggregate limit shall only apply to the obligations of the Guyana Power and Light Inc. to make payments to the Amaila Falls Hydropower Inc., its lenders and their respective lawful successors, pursuant to any agreement,” the resolve clause of Dr. Singh’s amendment to the motion said.
However, AFC MP Khemraj Ramjattan proposed a ceiling of $50 billion and an undertaking that this is renewable every three months.
Singh lamented that this proposed figure by the AFC will not be sufficient for the obligation by GPL. He said it is left to be seen whether Sithe Global will accept this figure of $50 billion.
APNU’s Greenidge said that there are questions not satisfactorily addressed so APNU could not support the motion. He said if the private sector is so convinced that it is a good project then they should put their money in it instead of looking to the IDB for the additional US$150 million to close the deal.
Ramjattan said if Guyana has to guarantee the GPL debt, it means GPL is not doing a good job. He said Government was not making a proper case for the motion.
“I must say that Government has provided the documentation but the guarantee of $130 billion is still too high,” he said. “We have to act cautiously…we don’t want to jump in with a $130 billion guarantee,” he said.
He said it is important to hear what the IDB says on the economic and environmental studies attached to the project.
“We are still uncertain about a number of things, like rates coming down, losses coming down and so on,” Ramjattan said.
While APNU voted no to the motion, Government and the AFC voted for it, rendering it carried in the House.
With the Bill passed and the motion carried, it is left to be seen how the developer Sithe Global will react. They are to make a statement to the media today.