Is this deja vu?
By 1984, the Guyana Government, after spending over a billion Guyana dollars on various aspects of the project, including employment costs, and failing to acquire international financing, eventually decided not to proceed any longer with it. As a result, the plan for the aluminium smelter was also shelved.
US$840M Amaila Falls hydro project… Govt. worried about penalties as deadline looms for financial closure
Guyana could very well face penalties if Guyana is not ready for construction of the Amaila Falls hydro project dam by the deadline for financial closure this year end. Government is getting worried as the access road remains unfinished and as the financiers, including the Inter-American Development Bank (IDB), continue their due diligence work.
A section of the Amaila Falls road under construction earlier this year.
After several delays since a 2011 deadline date, the closure has been pushed back as the financiers awaited the road completion and demanded that the country’s power company take steps to ready its systems to take power from the 165-megawatt facility that is to be built at Amaila Falls, Region Eight. Guyana Power and Light must reduce its commercial losses. Questioned about the developments on the US$840M project, Guyana’s most expensive ever, Head of the Presidential Secretariat, Dr. Roger Luncheon, said that given the validity of the Amaila Falls Hydropower Project agreement, financial closure, the access road to the facility, and the actual construction of the plant have to be delivered in a timely manner. The project is designed to reduce Guyana’s dependence on fossil fuel for power with a huge chunk of its foreign earnings going back to pay for that. The framework agreement was signed on July 15, 2010 by the Guyana Power and Light (GPL); Sithe Global’s Amaila Holdings, China Development Bank, and the China Railway First Group, the contractor. The agreement had set out among other things, the parties’ intention to reach financial closure within a stipulated time frame. Closure is now anticipated before the end of 2013 and is “integrated” with the other key component, the access road, Dr. Luncheon said during his weekly press conference today. The road to the site which requires upgrade of 110 kilometres (km) of new roads coupled with upgrades to 85 km of existing infrastructure, faced severe challenges with Government paying the price for not heeding warnings that its contractor, Fip Motilall from Synergy Holdings Inc., lacked experience in the road building of that nature. Days after taking office, the new Donald Ramotar administration in January 2012, fired Synergy Holdings for failing to meet contractual obligations. Government is banking on the hydro power to meet growing demands and spur growth in the manufacturing sector. Already, GPL is spending more than US$40M to rebuild aging transmission lines along the coastland to reduce technical losses. Also being built are seven sub-stations and a state-of-the-art control centre at Sophia that will allow the company to effectively manage power coming from the proposed Amaila Falls hydropower site. The road to the project, including existing ones, is sometimes through harsh terrains and swamps. Already, since the termination of the US$15.4M road contract with Synergy, Government has also fired other contractors for failing to meet deadlines. It has since signed a contract for one of the most difficult parts of the road with China Railway, the hydro facility’s contractor for the dam and power station. Government would be more than mindful of the very real possibilities of breach of contracts with the parties for failing to meet the deadline and having financial closure this year.
