– says Sithe Global
Sithe Global, the company developing the Amaila Falls Hydro project, has already spent “several million dollars,” Senior Vice President James McGowan said yesterday.
Civil society activist and chartered accountant Christopher Ram has already questioned Sithe Global’s stated intention to put US$200 million into the project.
Financing for the project, estimated by Sithe Global to cost between US$650 million and US$700 million, has not yet been finalised.
“The project will be financed through debt from multilateral and development financial institutions per an agreed upon funding schedule over the course of the construction period, and equity from Sithe Global,” McGowan told Kaieteur News via email.
He said Sithe Global has already contributed “several million dollars to the development of this project and expects to ultimately contribute around $200 million of equity.”
However, he said this equity is not tied to any specific project cost but is being used to pay a proportion of the total project cost.
Sithe Global only received permission one and a half years ago to develop the project, after the original developers, Synergy Holdings, transferred their licence.
Prime Minister, Samuel Hinds, has claimed that in the 13 years Synergy Holdings held the licence it spent US$5 million, which Ram has also questioned, given that this is not accounted for in the company’s accounts.
McGowan had before said that apart from the major components of the project, other “soft costs” mainly related to “project financing and development costs” add up to form the final project cost.
The Amaila Falls Project consists of two main components. The first component is the building of the hydro electricity plant. McGowan said this will cost an estimated US$320 million, calculating at an estimated US$1,900 per kilowatt. The project is now expected to generate 165 megawatts.
The second component of the project would be the installation of a transmission line to relay the electricity generated at the plant to power stations in Linden and at Sophia in Georgetown.
The line will be 270 kilometres long and will form the backbone of the new grid system. This project, Sithe Global says, will cost US$130 million.
This means that the construction cost of the plant and the installation of the transmission line would amount to US$450 million.
Less than six months after Synergy Holdings, under Makeshwar “Fip” Motilall realised he could no longer develop the Amaila Falls Hydro Project and agreed to have the licence granted to Sithe Global (October, 2009), Government handed him a US$15.4 million contract to build roads and bridges leading to the project site.
The government announced the award of the contract to Motilall on March 26, 2010. Synergy Holdings was given the first notice to proceed on October 5 last year for some sections of the road, while the green light for the other section through virgin rainforest was given on January 11, this year.
Those bidding for the contracts were asked to provide their experience in similar large scale projects together with references and credentials, and detail the equipment he owns and would require to carry out the project.
Synergy Holdings has come under the radar over its experience in building roads and its ability to carry out the project. The company’s contract is for the upgrade of approximately 85 kilometers of existing roadway and the design and construction of approximately 110 kilometers of new road. The works also include building bridges across the Essequibo and Kuribrong rivers.
In addition, the contract takes into account clearing the way for the installation of a 65-kilometre transmission line. The Amaila site is located on the Kuribrong River, a tributary of the Potaro River in west central Guyana.
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