Dear Editor,
I was absolutely dismayed when I read an article entitled “Financial feasibility of gas-to-shore a “no-brainer” – VP Bharrat Jagdeo” in the Kaieteur News. This article can be viewed at the following website: https://www.kaieteurnewsonline.com/2021/03/21/financial-feasibility-of-gas-to-shore-a-no-brainer-jagdeo/ The newspaper quotes Mr. Jagdeo as having said the following: “The financial aspect is a no-brainer. Any sensible person with a modicum of sense, a tiny brain, even a residual brain, would understand that,” he said. Backing up his statements, Mr. Jagdeo, explained that, “If you are generating power at $12 or $13 per kilowatt hour with the current price of fossil fuel…if you can supply power at $7 or $8 per kilowatt hour, a mad man would make the decision not to do so and that is what this opportunity offers…to cut the cost of generation by 50% from its current level.” I would like to ask Mr. Jagdeo how possible was it for him to arrive at the figures of $7 or $8 per kilowatt hour or, “to cut the cost of generation by 50% from its current level” as no feasibility study was done?
What Is a Feasibility Study?
The definition by Investopedia says: A feasibility study is an analysis that takes all of a project’s relevant factors into account—including economic, technical, legal, and scheduling considerations—to ascertain the likelihood of completing the project successfully. Mr. Jagdeo has a Master’s degree in Economics and is a very intelligent person, thus I am confused when he says there is no need for such a study. He is supposed to know and understand the vitally important reasons for conducting this type of research, especially for a project as massive and expensive as this Gas-to-Shore project.
What is the importance of a feasibility study?
“The importance of a feasibility study is based on organizational desire to “get it right” before committing resources, time, or budget. A feasibility study might uncover new ideas that could completely change a project’s scope. It’s best to make these determinations in advance, rather than to jump in and to learn that the project won’t work. Conducting a feasibility study is always beneficial to the project as it gives you and other stakeholders a clear picture of the proposed project.” (https://www.simplilearn.com/feasibility-study-article)
The former Energy Minister of Trinidad and Tobago (TT), Kevin Ramnarine is quoted as saying, “that a rough estimate would be US$600M to US$800M for the project.” OilNOW (March 19, 2021). ‘The gas pipeline will bring major economic, environmental and social benefits to Guyana’ – Ramnarine. For a project that is expected to cost Guyana between US$600M to US$800M, is our Vice President and “Minister of Oil and Gas” saying that no feasibility study is needed? This cannot be the correct manner in which our Government is expected to operate, and we Guyanese should be very concerned about not having a feasibility study done for this Gas-to-Shore pipeline.
Sincerely,
Jonathan Yearwood
