… Amaila Falls Hydro Project
Despite recent statements on the Amaila Falls Hydro Project that former developer, Makeshwar Fip Motilall spent an estimated US$5M for work, he has failed to reflect the expense on his financial records.
According to attorney-at-law/accountant, Christopher Ram, there are now more questions than answers with the pressure on Government to come clean on the details of the project.
Over the past week, Sithe Global, the US-based developer, in what has been described as bombshell revelations, said it acquired the license from Synergy Holdings, owned by Motilall.
Prime Minister Sam Hinds then disclosed late last week that Synergy Holdings, because of initial works costing in excess of US$5M, could be paid at least US$10M for coming up with the concept. This payment would come from Sithe Global once the project is successful.
However, Ram made it clear that government has a responsibility to ensure that the country’s assets are protected from “opportunists” who may come knocking.
“In the case of Fip Motilall, the government appears to have conspired and colluded in these efforts.”
There had been accusations that Synergy Holdings was incapable of undertaking any major projects.
Government awarded a major US$15.4M contract to build the access roads to the Amaila Falls project site. Already, the work is said to be way behind schedule and Government has advised Motilall to hire sub-contractors to assist.
The Prime Minister’s explanation about the transfer of the licence has not thrown light on the issue, but rather has confused it, Ram argued.
“…I am not even sure Prime Minister Sam Hinds knows for sure what should be the contents of the licence.”
The outspoken accountant said that he believed that several sections of the law have been “seriously violated” and “not complied with”.
“What we have in the case of the Amaila Falls Project and Fip Motilall is that the government appears to have colluded and conspired with Mr. Motilall for in excess of 13 years. He has been holding the country to ransom in excess of 13 years over the hydro electrification.”
Questioning whether Guyana could not have taken the initiative to talk to other developers during the interim, Ram pointed out that at one time the Prime Minister had denied knowledge of the licence…something that he is now acknowledging, openly.
“Now we hear that he (Motilall) might have been spending millions of dollars. His accounts don’t say that. Where does Mr. Sam Hinds get his info from? And that is why I cannot help but say I think that Government has conspired and colluded with Mr. Motilall in all these excursions and expeditions of his.”
Last week, the Prime Minister said that since the mid-1980s Amaila was recognised to be an interesting site “for development, perhaps the site that best matched our needs.”
Motilall began considering and pursuing that development in 1997; applied for and entered into an MOU in early 1998 on which he had Kleinschmidt & Assoc of Portland Maine, make a desktop pre-feasibility study.
However, documented evidence showed that Motilall signed a Memorandum of Understanding on May 23, 2006. The signatories were Prime Minister Hinds; Ronald Alli as Chairman of Guyana Power and Light; and Makeshwar Fip Motilall on behalf of Synergy Holdings Inc.
On July 31, last year, when a copy of the Memorandum of Understanding was shown to Prime Minister Hinds and he was asked about the signing he said that he could not recall any such signing.
When pressed further, even when shown his signature, he had said that he signs many documents on a daily basis.
The Prime Minister further said the questions being posed to him were specific to the MOU which was not at hand, hence, he was not in a position to provide answers. He then asked that the questions be forwarded to his office.
Last week, Hinds remembered not only Motilall signing, but every detail of the hydroelectric project pursued by Motilall.
“With a favourable outcome, Mr Motilall continued working, seeking partners at that stage and had HARZA Engineering (now MWH) prepare a feasibility study, partly for cash payment and partly for a carried interest.
“On the basis of the positive Feasibility Study an Interim Licence was applied for and granted in 2002 and work continued with the production of an EIA.
Financial and all closure was close at hand with Scudder Latin America Fund and Leucadia about to take the lead, but among other things oil price was low, less than US$30/barrel; financing costs were high for this then purely privately financed project; the projected cost for electricity was greater than electricity from HFO fuelled stations, and the outward repayment cash flows were greater than fuel purchase flows. That arrangement fell apart.”
He justified Motilall transferring the licence to Sithe Global. But in a letter correcting media reports that Motilall sold the licence, the Prime Minister noted, “Synergy won the interest and attention of Sithe Global, now a part of the Blackstone Group. In time, as Sithe Global worked its way into the role of leading partner to take the Amaila Falls Hydropower project to construction and operation, on the request of Synergy and on the Government’s own consideration and demand, a new Interim Licence was issued in the name of Sithe Global in October 2009.”
The Prime Minister added, “It is quite standard practice that a pioneer having developed a project to a certain point finds a bigger, stronger partner to take the project forward.
“The pioneer is rewarded in part or in whole with a cash payment at the time and some equity interest in the realised project.
“Depending upon the profitability of the project the pioneer would receive a multiple of his investment in cash and time. Of course the many more times when the project dies before realisation, the pioneer receives nothing.”
Observers said that Motilall stands to receive many multiples of his investment. But this was a man who could not find US$24,000 to pay taxes in the United States.
Sithe Global, however, does not say that Synergy Holdings is a partner.
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