Amaila and trust

For a government that has never been shy of railroading laws and big-ticket projects through Parliament and other places, it was passing strange that in recent months the Ramotar administration seemed more solicitous of the opposition’s views on a clutch of important issues. For while the administration has managed to get around the impact of budget cuts on agencies like GINA and NCN by innovative and unusual financing methods, it has no antidote for international arrangements where its partners clearly recognize who is in control in Parliament and what that could mean for projects and undertakings. Hence the government’s imploring of the opposition to co-operate with it on the anti-money laundering legislation which ironically it could have done on its own in 2011. Hence the present uncertainty about how the specialty hospital and the Cheddi Jagan International Airport expansion projects will proceed.

The dilemma was further accentuated last week when officials of the prospective developers of the Amaila Hydropower project, Sithe Global and the Blackstone Group visited the country on a lobbying mission. The team said in a briefing document to Members of Parliament from all sides “The project is a major undertaking for Guyana and will require widespread support to be successful. Without support at the next sitting of Parliament, Sithe cannot continue to fund development expenses”. That stark warning is a clear reflection – even though the government continues to live in denial about the 2011 election results – that the Ramotar administration has to begin mature, frank and transparent negotiations with the opposition in a series of areas.

It also means that the opposition, both APNU and the AFC, now have an important decision to make. There are two discrete dilemmas facing the opposition. The first is the trustworthiness of the government and the second is the major unanswered questions about this gargantuan project which is intended to provide clean and hopefully cheaper energy.

Twelve years of the Jagdeo administration and 20 months of this one have made it clear that they are untrustworthy, determined to have their way at any cost and dismissive of institutional checks and balances.  They have lived up to very little of what they have committed to and their governance has been defined by poor performance, the absence of transparency and unwillingness to compromise.

The evidence of their failings is boundless and requires careful examination. Perhaps the grossest abomination in the recent decades of the country’s history was the involvement of Mr Roger Khan in the prosecution of a private campaign against the people he declared to be criminals all the while conducting his drug trade uninhibited. The involvement of the state apparatus in his operations and the collusion between senior officials and Mr Khan on various fronts, including the acquisition of scanners to track mobile communications, stand out as the clearest example of the criminalization of the state. Any government which stoops to these levels or avoids a robust examination to clear its name of these allegations cannot be considered a serious partner in large scale enterprises that demand transparency, openness and honesty.

There are many other examples of duplicity and opaqueness including the 2008 commitment for serious police reforms with UK financing at the height of the three massacres only to be reneged on when the security situation improved.  More recent examples would include the disastrous Skeldon Sugar Factory and its enormous cost to the economy, the extraordinary decision to hand the complex Amaila road project to Mr Fip Motilall, the determination to move ahead with the ownerless hotel in Kingston despite the many serious concerns raised by the public and the opposition, whose support is now being sought for Amaila, and the awarding of the specialty hospital contract to an Indian company that seems to have amazing allure, at least as far as the government is concerned, but no track record.

There is another blemish that the Ramotar administration is solely responsible for: the  unacceptable manner in which serious undertakings given to Region 10 in the aftermath of the deadly protests last year over electricity tariffs have been handled. While Region 10 is not blameless in this matter a year has passed and very little has been done or achieved and there is no sign of imminent progress. The list can go and can include the implacability of the government on the vulgar handing out of radio licences to friends of the administration and President Ramotar’s clear refusal to address the scandal at NCN that involved money from the phone company, GT&T. The point is clear, the government’s word is not its bond.

It would be a stretch for the government to expect the opposition to provide support on a platter for a massive project like Amaila without the opposition eliciting clear and enforceable guarantees that the poor and deformed governance emblematic of the PPP will be a thing of the past.  How would the opposition be sure that the commitments that the government might give in relation to Amaila will be followed through? For example, how will the government convince the opposition and the public that the debt to be contracted and the regulatory framework will be handled in such a way that there is no risk of the government backtracking?  How exactly will Parliament be involved in this project to ensure that it delivers what it promises? The constituency of the opposition would also not be assuaged unless it was evident that better sense would prevail at the Office of the President and that the prevarications and dithering on important institutional controls such as the Public Procurement Commission, the Integrity Commission, the Ombudsman, the Public Service Appellate Tribunal and a properly constructed access to information act would end as these all interface with the general accountability which is lacking but absolutely essential for a project like Amaila.

That is one issue. The other major area would be the technical issues that are still unsolved and the new ones that crop up each day. Without full information that is tested and verified it is difficult to see how the opposition could be easily convinced. The matter of the tariff that GPL will charge to the end user remains a big puzzle along with the factors at the Amaila end which might push these up. The breathtaking disclosure that around 15 megawatts of power could be lost along the transmission line immediately ups the cost per megawatt and raises questions about the conceptualizing of the project and delivery of power to the coast as opposed to the hinterland or closer areas. The escalating costs, the rates of return agreed for the private capital and the interest charges remain a serious area of concern. Could this project not have been financed in an entirely different matrix without reliance on capital that is coming with a high cost? Might not Norway have seen the wisdom of investing a larger chunk of its financing deal here for a patently cleaner source of energy and without usurious financing charges? Might not Brazil have been keener to help with multiple projects which would have productive tie-ins with the needs of its own northern states? One of the several elephants in the room is the Guyana Power and Light. In the hands of this government for over 20 years it is still not in a position to perform as the host and supplier of the Amaila power. Sweeping changes have been urged for it including the hiring of foreign managers and another tranche of money is to be poured into it. It is these and other areas that the opposition has to be convinced on. As we stated in last week’s editorial, what the government and the opposition should do is agree on the immediate recruitment of two experts in hydropower projects: one on the plant side and another on the financial side. They could then be asked to review all of the documentation of the project so far and offer advice on what changes should be made. The government has a real selling job to do on Amaila and this time it must know that there has to be some transparent and workable way in which it  can be held to its word. Trust is what won’t be easily given to it after its dismal record over 20 years.

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