Amaila more than double similar Pakistan Hydro Plant …. project US$478M less than Amaila

July 29, 2013, By KNews, Filed Under News, Source

Pakistan has announced that it will be building a 147MW Hydro Electric Plant at a cost of US$362M.

This would mean that the cost per mega watt would be US$2.4M as against the more than US$5M per mega watt that the Bharrat Jagdeo Administration secretly negotiated and inked.

Parliamentarian Joseph Harmon

Shadow Minister with responsibility for Public Works in Guyana, Joseph Harmon, says that the Pakistani Hydro Power Plant demonstrates clearly that hydro power plants can be built far more economically than that which is proposed in Guyana.

Harmon recalled that when the Amaila Falls Hydro Power Plant was first proposed for Guyana, it was priced at a cost of US$340M.

That figure has since skyrocketed to a whopping US$840M.

Not at any price
“We have always been supportive of hydro, but not hydro at any price,” says Harmon.

He said that there must be intense scrutiny of the proposed Amaila Falls Project given that it is not just the current generation of Guyanese that will have to pay for it but “our children and our children’s children.”

Harmon opined that the administration possibly believed that because the project is located in an area out of the public eyes that they would have built it at any price with no questions asked.

“People are asking questions now,” said Harmon.

He opined that the level of scrutiny now being placed on the project was absent years ago because of the lack of information. Alliance for Change (AFC) Leader, Khemraj Ramjattan, in weighing in on the Amaila Falls project as against the Pakistani project,  said that it is important to note that while it is only 18MW less than Guyana’s the difference in cost is a whopping US$478M less than Amaila Falls.

He said too that it is even more critical to point out that the Pakistani Project is being done by private sector joint venture, in a country which in the last 10 years had a coup, several assassinations and three governmental changes – thus must be deemed more politically risky than Guyana.”

The Amaila Falls project has in its financing a Debt Political Risk Insurance to the tune US$55.7M and is being insured in China.

AFC Leader Khemraj Ramjattan

 

Financing Amaila
The Amaila Falls Hydro Power project in recent days has been coming in for extreme criticism given its seemingly astronomical price tag.

Only recently, financial analyst Christopher Ram questioned the financing arrangement for the project that serves as a huge part of the over-all cost.

Sithe Global has been contracted as the developer of the project which has already inked a contract with China Railway First Group to Build the Amaila Falls Hydro Project.

In terms of how the money will be used, Sithe Global officials had explained that the Engineering Procurement and Construction (EPC) cost of the actual project will amount to some US$519.6M.

The total capital costs for the project, according to the Sithe Global officials, will be US$652.5M, taking into consideration additional construction, development, start-up, as well as a contingency.

The remaining US$187.8M will go towards financing costs which include Interest during Construction (US$97.1M), Lenders Fee and Advisory Cost (US$34.9M), and Debt Political Risk Insurance (US$55.7M).

As it relates to the actual construction of the hydroelectric plant the officials explained that of the US$519.6M in total Capital Expenditure, the plant is expected to cost US$314M, with the Transmission Line demanding some US$126M. The additional US$79M is for currency adjustments.

Interest during the construction will amount to US$97.1M.

Per MW comparisons
Experts on the building of such plants say the cost of hydropower construction per megawatt usually ranges between US$1M and US$1.5M.

Some of the most expensive power plants built or under construction include the Chinese Three Gorges power project with a capacity of 18,000 MW at $1.3m per megawatt.

The controversial Ilisu hydroelectric dam in Turkey will cost US$1.6B but will generate 1,200MW of electricity. This means that it is being constructed at an average cost of US$1.3m per megawatt.

In Sudan, the 1,200MW Merowe Dam on the Blue Nile, commissioned in March 2009, cost only US$760M while the Gilgel Gibe II hydropower station in Ethiopia with a capacity of 420MW was built at a cost of US$600M.

and

Know the facts before making comparisons.

The cover story to explain away the fast sums of money the PPP intends to spirit away from this project is laughable. There is no honest bone left in the PPP. All that false propaganda to justify theft is just disgraceful.

I agree, you need to get to the details and costs drivers before making a comparison.  I'm sure there will be a level of wastage as in any such project.

Do you? Why don't you explain the disparity in the final unit costing comparison?

6) The Pakistan project benefits from concessional financing.  According to the aforementioned UNFCC project design document, “the fact that the financing for such huge projects in Pakistan is difficult is evident as the multilateral banks (MLBs) are willing to consider the financing for the project below a competitive margin of 4.75%… If same project would have to be financed based on local sponsors and no Certified Emission Reduction revenue, the MLBs would not have agreed on such terms given the risk profile of the country and local sponsors”

How can Pakistan get concessional financing and not Guyana? Guyana is poorer than Pakistan? Why is the government not willing to work with the World Bank?

4) The project is “low tech” when compared to Amaila.  The Pakistani project uses simpler technology called run-of-river because of its natural conditions.  A run-of-river hydro project is cheaper to construct than a normal hydro because it does not require the significant civil-engineering works such as the construction of an underground tunnel, which is a sizable portion of construction cost.  Amaila will have a three kilometer underground tunnel from the reservoir to the turbines, whereas the physical conditions of the Pakistan project does not require such a tunnel.  The cost of constructing the Amaila power tunnel and headract tunnel is approximately US$ 85 million.

So Amaila is high tech yet consumers will not get lower electricity price. What a shame.

Look that SHAMELESS DAAG Ramjhaaaaaaaaaaaaaaatan!!!

Oh that is so intelligent. Did you get a 4.0 GPA at CUNY?

I would not even ask you that same question, there is no need to.

He is living there and fighting corruption on the front line with hundreds of death threaths to him and his family. This project is a big scam on the people and future generations.

the level of scrutiny now being placed on the project was absent years ago because of the lack of information. Alliance for Change (AFC) Leader, Khemraj Ramjattan, in weighing in on the Amaila Falls project as against the Pakistani project,  said that it is important to note that while it is only 18MW less than Guyana’s the difference in cost is a whopping US$478M less than Amaila Falls.

When was the Pakistan Hydro built??

The very first sentence says :

Pakistan has announced that it will be building a 147MW Hydro Electric Plant at a cost of US$362M.

When dem done build am must tell me the cost.

How can Pakistan get concessional financing and not Guyana? Guyana is poorer than Pakistan? Why is the government not willing to work with the World Bank?

You certainly have a lot to learn but you will not get FREE lessons from me.

One would always get misleading answers when comparing apples to oranges; breadfruits to bread; etc., etc., etc..

Not necessarily wastage but with contracts in all parts of the world, there are always uncertainties, hence there are provisions for day-works, which are priced differently and separately at higher costs and are distinct from the contract price.

So explain why Guyana can't get World Bank financing for this project?

Therefore, Amaila has more uncertainties? More Uncertainty = More Risks. Anyone who did some finance/accounting/business knows that more risks = higher price. Should Guyana with its small GDP undertake these great risks at this point?

There is no comparison between the wise and a certified CUNY dunce. 

More evidence that Guyana is overpaying for Amaila Hydro… World average per megawatt US$2.32M; Guyana agrees to pay US$5.1M

At more than US$5M per megawatt, the Guyana Government is pushing ahead to construct a hydro power plant that is more than double the amount being used for plants being built around the world. The government is insisting that the project is economical, viable and sustainable. The most recent comparison was undertaken by Former Auditor General, Anand Goolsarran. He found that hydro power projects around the world are being built at an average of US$2.32M per megawatt, as against the US$5.1M per megawatt being proposed for the Amaila Falls Hydro Electric Plant. The plant was initially proposed to be built by Makeswar ‘Fip’ Motilall’s Synergy Holdings Inc but when he couldn’t find a financial backer, he sold his license for US$12M to Sithe Global. In his comparison of the US$840M Amaila Falls Hydro Electric Plant, Goolsaran drew reference to the 147MW Plant proposed to be built in Pakistan at a cost of US$362M. This would mean that the Pakistani project is being built at a cost of US$2.46M per megawatt. Goolsarran pointed also to Nepal, where Spark Hydro Power is set to commence construction of a 101MW plant for US$186.2M This means that the plant is being built at US$1.84M per mega watt. In Guinea, Semafo Inc., a Canadian Gold Producer that mines in West Africa is building a 130MW plant on the Cogon River for US$230M. That translates to US$1.77M per mega watt. It was noted too that last month the Ugandan Government awarded a contract for a massive 600MW Hydro Electric Plant along with a transmission line for a total of US$1.65B. This translates to the cost per mega watt being US2.75M. In 2009 Benin’s state owned utilities company, Communaute Electrique Du Benin (CEB) and China Sinohydro inked a contract for the construction of a 147MW plant for US$366M or US$2.49M per mega watt. Goolsarran’s comparisons also drew on the fact that in November 2010, Brazil inaugurated six hydro stations with a total capacity of 645MW in the Goias State These projects come with a total price tag of US$1.72B, working out to a per mega watt cost of US$2.66M. The former auditor general did caution that the cost structures in various countries would vary depending on a variety of factors, “but the comparison does give us a general idea that Amaila Hydropower project may be significantly overpriced.” Goolsarran is among the latest to come out criticizing the project in its current form and suggests that it is not too late for the Government to reset the process to allow adequate time for parliamentarians and other stakeholders to seriously reflect on the Government’s proposal. According to the Former Auditor General, ever since the conceptualization of the project in 1997 the government did not see it fit to engage the National Assembly on the project despite its magnitude. “This is despite the fact that it is this body that has to pass the relevant legislation to approve funding for the project, including lifting the ceiling for the guarantee of loans” to cover the Power Purchase Agreement between the Guyana Power and Light and the Amaila Falls Hydro Inc. Amaila Falls Hydro Inc is the special purchase company incorporated in Guyana to build the plant and facilitate the payments from GPL to Sithe Global. According to Goolsarran, it was only when the Government needed the support of the legislature that disclosures were made on a confidential basis. “However, such disclosures raise more questions than answers and the action of the Combined Opposition in exercising caution and financial prudence appears quite justified.” According to Goolsarran it is perhaps that the Government did not anticipate that it would have lost control of the National Assembly. He said that had Government maintained a majority in the House, the Hydro Electric Power Bill along with the motion to raise the debt ceiling would have gained easy passage.

Risks/uncertainties are always present in every aspect of life, e.g., when a person steps out of his/her home, or falso when a person wakes up, etc., etc., etc..

What you have said their is not original or insightful in any way or form. Everyone knows that. However, it is amazing how flippant you are with the money of a poor country. I guess this is the gambling style we get when we vote for dunces and engineers who failed a nation. 

Don't leave home without your depends.

Spewing perpetual nonsense seems to be your focus.

I am merely pointing out how careless you are with Guyanese money.

You choice to engage with nonsense; after all it is your time.