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Apr 21, 2010 Features / Columnists, Peeping Tom
For years now the name Synergy Holdings Inc. has been associated with the Amaila Falls Hydro Electric Project. Yet the government at a hastily called press conference announced that another company will be building the hydroelectric power facility and that Synergy Holdings is no longer the sponsor.
What does this mean? It is hard to imagine that Synergy Holdings has extricated itself from the actual process of developing the hydroelectric facility and has settled for involvement in building the access roads to the fall.
This is not how things usually work. The concept of the hydroelectric project and the original movers behind this project was Synergy Holdings. The only reason why work did not proceed earlier was, we were told, because of the need to mobilize the financing of the project. Extensions were given and eventually an award was made for the construction of the project.
It is hard to imagine that Synergy Holdings which had invested so much time and no doubt a great deal of money in pursuing this project would simply surrender its rights to the project. That company would have, most likely, from the inception have signed a memorandum of understanding with the government which would have assured it of rights to develop the project.
No serious investor would overlook securing rights to a project. Thus no one else is likely to have come onboard this project unless such a move was sanctioned by Synergy Holdings. It is therefore naïve to think that Synergy Holdings is no longer involved in the actual building of the hydroelectric project. If Synergy Holdings did cop out of the project, it would have to be of its own volition and would most likely have involved a settlement favourable to it.
Thus the media in its preoccupation with the credentials of Synergy Holdings to build the access roads should not lose sight of the fact that Synergy did not originally come onboard as a road construction firm; it came onboard as the technical purveyor of this project. The media should therefore demand to see the original agreements signed between the government of Guyana and Synergy Holdings to see what rights the company has secured for itself in this project and what were the options open to the government in hiring a new company to build the hydro dam.
The media should ask the Prime Minister and NICIL for a copy of the original agreement or memorandum of understanding which was signed between the GOG and Synergy Holdings so as to determine just what rights Synergy had in relation to this project and what were the consequences of it surrendering these rights.
The role of NICIL is of course open to question. What part did it play in the road-building contract? It ought not to have been involved at all. NICIL is supposed to be a holding company for government assets including real property which is either in the process of being privatized or has been or will be privatized.
In terms of the award of a contract one must ask, “What was the role of NICIL?” The award of contracts to build roads comes under the purview of the National Procurement Board. So was it the National Procurement Board that evaluated and awarded this contract or was it NICIL?
The process of prequalifying bidders is one that allows the government to shortlist the most technically competent firms to bid. It does seem a bit strange to the average layman for a company which is not well–known in Guyana for its road building capabilities to be prequalified and to be prequalified for such a major contract, one that is in excess of three billion dollars.
At the minimum one would have expected that for such a contract a company would have had to meet stringent qualification requirements, including showing that it could mobilize the capital and the machinery for the process. And one does not usually expect a company which is not known for road construction in Guyana to be able to mobilize the machinery for one single project. The acquiring of machinery costing hundreds of millions of dollars would not be feasible if a company was only in for this one contract.
But the government must have been satisfied that the company has the requisite skills, managerial capacity and technical know-how to undertake these works. This is no doubt why they got the contract. But in the eyes of many this is a huge risk that the government is taking, to grant such a major contract to someone who is not known to have built any major roads in Guyana before.
We are told, however, that the company did some road-building work in Georgia and another State in the USA, and since the government is most likely to be privy to this information, perhaps they can silence the perennial naysayers by providing the public with the road-building experience of this firm.
After all, it was their judgement that the company has the ability to undertake the works at the price tendered and therefore they have a duty to share with the public, the reasons why they have this confidence for regardless of the safeguards in place, one does not simply award a contract to any and every company.
It does not matter how many safeguards are in place, the ability of the firm to undertake the work should be the primary consideration. For no matter whether it is a house, an office, a factory or a road that is being constructed, there must be confidence in the ability and the capacity of the builder to undertake the works.
The fundamental consideration of the government should be to reduce its exposure and minimize risks. The safeguards are not the answer to reducing exposure or minimizing risks. The safeguards are no safeguards against failure, only against financial losses.
(To be continued)
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