Amaila Falls Hydro Electric Project… No financial closure, road deadline extended
…as Govt. gives $833M contract for final section
Head of the Presidential Secretariat Dr. Roger Luncheon yesterday announced that Cabinet has approved a contract for the final stretch of the Amaila Falls road.
“Public Works: For the construction of the Amaila Falls access road section seven, that’s the Kuribrong River bank to Amaila Falls
approach,” he said. This contract, he confirmed, was for $832.8M.
He explained that the contractor is only responsible for this section of road given that other sections have been allocated to different contractors.
Dr. Luncheon, when asked about the obvious extension of the deadline set for the completion of the entire road, said that there is now no “drop dead date”. He did seek to explain that in terms of the deadlines for the completion of the road, the financial closure with the Inter-American Development Bank (IDB) for the substantive Hydro Power Project is the “real drop dead date.”
According to Luncheon, the financing for the Hydroelectric Project for which the road is paving the way, “has not been brought to financial closure.”
He explained that as the financial closure kept being pushed back it made for time to be available for the completion of the entire stretch of road required from Linden to the Amaila Falls approach.
“So indeed we are not locked in,” said Dr. Luncheon as he explained that Sithe Global which has been contracted to undertake the Hydro Power project has not yet assigned a date for the start of its construction.”
When contacted yesterday on the issue of financial closure, James McGowan, Sithe Global’s Senior Vice President of Development informed this publication that, “We will issue a status update to the public within the next two weeks.”
McGowan’s response was prefaced with a sense of urgency for the financial closure, as had been indicated by his CEO, Bruce Wrobel.
Contrary to the utterances of Dr. Luncheon on the urgency of the matter, Wrobel had intimated that should the financial closure not be inked by June, then the project could invariably be shelved for several years given the volatility of the Chinese currency against that of the US Dollar.
The IDB is being sought after for US$175M to complete the consortium of investors in the project which has a price tag of US$840M.
The Sithe Global officials, while in Guyana, had explained that the main concerns of the IDB are with the Environmental Studies and the impact of the project, as well as the Guyana Power and Light (GPL)’s ability to manage the project and to make the necessary repayments, taking into consideration technical and commercial losses already incurred by the power company.
Wrobel told this publication in the presence of his senior Vice President, among others, that should financial closure not become a reality soon, then Guyana could see the project being put on the back burner for the next five to ten years.
As it relates to the access road project, where the Government had terminated its contract with Synergy Holdings Inc., Wrobel said that he is confident that the administration is cognizant of the importance of the road and will ensure its timely completion.
Given the sense of urgency Sithe Global places on the road, as against the pronouncements of Dr. Luncheon, the CEO even suggested that Sithe Global may be willing to incorporate the access road project into the larger project rather than lose on all of the gains made thus far.