APNU wants key agreements on hydro project… hopes for more openness after road tour

June 25, 2013, By KNews, Filed Under News, Source

The country’s major opposition coalition bloc, APNU, says that it would be requiring key project documents on the Amaila Falls hydro project and on the road being built to the Falls.

After repeated requests, the government last weekend facilitated a visit by APNU and the other opposition Parliamentary party, AFC, to various sections of the road being built to Amaila Falls.

According to APNU, the government was willing to provide adequate answers to questions asked, but more information would be required.

An artist’s impression of the completed Amaila Hydro Power Plant.

“This engagement is a good beginning in what we hope will set the standard for openness in the provision of timely and critical information relating to projects which affect this nation,” said Joseph Harmon, a leading executive of APNU.

Ronald Bulkan, another executive of APNU who was on the tour, said that the agreement with China Railway to build the actual hydro power plant to the cost of US$506 million, would be asked for by APNU.

The main opposition party would also be interested in seeing the Power Purchase Agreement with the Guyana Power and Light Company, which will reveal if indeed electricity costs would go down.

For the construction of the hydro plant, APNU said that it would be interested in seeing the extent to which locals would be employed on the project.

This concern has arisen from the fact that the leader of the Amerindian Village of Kaburi, through which the road passes, asked China Rail about employment of his people in Section Seven of the road, but was told that the time frame for the project would not make that possible.

Harmon said that is what the village leader told them, but that the Minster of Public Works Robeson Benn suggested that there were other ways that the village could benefit from the overall project.

Harmon said that he was not sure if the position taken by China Rail was the final position of the company on the road project.

But for the larger hydro project, he declared that local labour must be involved and if not that the contract should be renegotiated.

“This is not grant money we are talking about here. This is a loan which we are taking and we are requiring the people of this country, we, our children, and our children’s children to be paying that back.

“So there must some benefit which must accrue to the Guyanese people up front,” Harmon stated.

China Development Bank and the Inter-American Development Bank (IDB) are lined up as the key financiers of the hydro project.

Financing for the project hinges on a due diligence being currently done by the IDB and the satisfaction of certain conditions established by the Chinese bank, Harmon stated.

During last weekend’s visit, the opposition came to the consensus that the cost for building the road to Amaila Falls could double and that the year-end deadline to complete could very well be missed.

Completion of the road is one of the key benchmarks that have to be met for the government to secure financing for the Amaila Falls Hydro Project, which it says will provide cheap power to spur development and make it lighter on the pockets of ordinary electricity consumers.

Harmon said that China Rail’s contract to complete Section Seven of the road is US$8.5 million. This adds to the US$6.2 million which was given to the first contractor – Fip Motilall, the man who was awarded the entire project by the government of former President Bharrat Jagdeo.

The entire project should have cost US$15.4 million, according to the original contract given to Motilall.

When Motilall buckled under the weight of the project, he was fired by the current Donald Ramotar government. The project was then put in the hands of various contractors to complete the seven sections of the road.

Pasha Engineering was awarded Section Seven of the road, which is a 48.8 kilometre stretch from the Kuribrong River to Amaila Falls. He too failed on the project, but not before he was already given US$1.5 million, Harmon stated.

So, at this point, the cost of building Section Seven alone is now estimated to cost US$11.2 million.

As a result, Harmon suggested that the original contract sum of US$15.4 million cannot be the figure envisioned at this time, and he put a rough estimate of the final cost to be almost US$30 million.

In 2012, the government put the total cost of the project at $3.92 billion and of that sum requested $2.35 billion. This was approved by the National Assembly. Of the amount granted, the government said $2 billion was actually spent.

This year, the government curiously revised the total project cost for the road at $5.23 billion and requested a further $2.35 billion, which was again approved by the National Assembly.

In the original contract, Motilall was required to cut the path for the transmission line which will take the power from Amaila Falls to the various distribution points. Harmon said the new contracts to the various contractors does not make provision for cutting this path for the transmission line, adding further uncertainty to the cost of the entire project.

He said that Sithe Global, the developers of the hydro project, would be responsible for cutting the transmission line.

Of the sections of the road that are behind schedule, Section Seven is the more uphill task, suggested Dr Rupert Roopnaraine, another senior executive of APNU who was on the site Saturday.

In this section alone, Harmon says 58 bridges have to be built, including one across the Kuribrong River.

He said that all the contractors on the project have underestimated the scope and nature of the works and they face massive hurdles in meeting the December 30 deadline to complete the work.

According to Harmon, the contractors face the problem of frequent rainfall, and in cases where there is good weather, there is insufficient equipment to accelerate work.