Latest update April 17th, 2024 12:59 AM
Jul 22, 2010 Letters
Dear Editor,
To quote from page 27 of the 2006 PPP/C Manifesto, “The PPP/C will continue to build on its solid track record of strengthening accountability, transparency and good governance”. This is the promise that President Bharrat Jagdeo made to the Guyanese people in an effort to get reelected.
Unfortunately, a more truthful statement would have been, “The PPP/C will continue to build on its solid track record of ignoring the people’s call for accountability, transparency and good governance”, for there has never been another administration shrouded in such secrecy.
We still do not know the names of the “technical evaluation team” in the Administration, who certified Makeshwar Fip Motilall and Synergy Holdings Inc as having the “appropriate experience” and technical expertise and equipment – a requirement for being awarded the contract, to build the Amaila Falls Hydroelectric Project road; neither do we know the details of this contract.
It is truly amazing that Finance Minister, Dr. Ashni Singh, in reporting the “good news” to the National Assembly last Thursday, of the loan agreement reached between the Guyana Government and China Development Bank paving the way for the start of the Amaila Falls Hydro-Electric Project (AFHP), failed to disclose the amount that the Jagdeo Administration has committed our children and grand-children to repaying the Chinese Government.
How can anyone get away with this? Where is the promise of accountability and transparency Mr. President?
In previous reports, Mr. Rafael Herz – Sithe Global Project Manager for the Amaila Falls Hydropower Project estimated the cost of this project at US$650M, while President Bharrat Jagdeo put the cost at US$450M.
Other government sources have placed the AFHP at between US$500M and US$600M.
Because there is such disparity in the estimated construction cost by the Government of Guyana and Sithe Global, the citizens of Guyana demand to know exactly how much of their tax dollars will be committed to this project, and how much will be invested by Sithe Global and other investors.
We know that the Guyana Government has committed between US$40M and US$60M of the Norway/Guyana climate fund to the AFHEP, and Sithe Global said that it will ultimately contribute US$150 million of the equity.
So exactly how much is the Amaila Falls Hydropower Project expected to cost the people of Guyana? Maybe not as much as we’re led to believe, and if so, why is this inflated amount of money being floated?
Let us examine this hypothetically: Suppose you go to the bank to borrow $100M to build a house in Lethem. The house actually costs $50M, but a friend who is the President of an Association, asks you to apply for an additional $50M loan in your name, because he and other members of the Association’s Board of Directors needed the money for the Association.
The bank declines your application because you do not have the collateral to cover the loan, and based upon the size and design, they know it would cost a lot less than $100M to build a house there. So your friend, the President of the Association and other members of the Board, go with you to the bank.
Your friend, the President, signs over the assets of the Association as collateral, and BINGO! You’re approved for a $100M loan! You get your G$50M to build your house, and the President and his Board get the other $50M for his Association.
The following year, the Association elects a new President and Board of Directors. When the Association’s books are audited, the $50M cannot be accounted for, and the members are stuck with the repayment of the loan. Get the picture?
Some of the world’s most expensive power plants built or under construction include: The Chinese Three Gorges power project with a capacity of 18,000 MW at US$1.3M per megawatt
There is the controversial Ilisu hydroelectric dam being built in Turkey at a cost of US$1.6B. This plant will generate 1,200 MW of electricity at an average cost per megawatt of US$1.3M.
Gilgel Gibe II hydropower station in Ethiopia with a 420 MW capacity was built at a cost of US$600M at a cost per megawatt of US$1.43M.
Sithe Global Power LLC is involved in the construction of a hydropower plant in Uganda which is proving to be one of the most expensive in the world. The cost went up from the original budget of US$500M to US$860 million, and may hit the US$1 billion mark before completion. According to some experts, the cost of hydropower construction per megawatt usually ranges between US$1 million and US$1.5 million. As such, the US$860M Bujagali’s Hydropower plant in Uganda will cost at least US$3.4 million per megawatt.
The Ugandan Energy Minister, Hilary Onek, said last year in the government-owned New Vision newspaper, “There were mistakes in the Bujugali project. It is a bad project, over-delayed, and over priced. If I had been there (as Minister of Energy), I would not have allowed poor negotiations for this project”.
In Guyana, the 140 MW Amaila Falls Hydropower Project will cost between US$3.2M and US$4.6 million per megawatt, depending on whether you use President Jagdeo’s figure of US$450M or Sithe Global’s estimate of US$650 million.
In any event, the construction cost quoted for this project is at least US$170M, and at most US$370 million overpriced, even if the construction cost is estimated to be an above average US$2 million per megawatt. US$370 million is a lot of money to be unaccounted for.
If the Guyana Government’s contribution to the AFHP is only US$40M to US$60 million, and President Jagdeo in an earlier report stated that the financing of an estimated US$450 million from the Inter-American Development Bank and the China Development Bank is not a loan to the Guyana Government but to the AFHP, namely Sithe Global and whoever private investor/s they may have, why did the Government of Guyana guarantee a massive loan in Shanghai on the backs of generations to come?
Sithe Global is big enough, with enough equity worldwide to secure financing of its own, unless the China Development Bank and the China Railway First Group Company Limited are convinced that the Amaila Falls Hydro-Electric Project is not worth the value of the loan, thereby demanding additional security in the form of a willing guarantor: The Guyana Government.
For what it’s worth, the CEO of Sithe Global, Mr. Bruce Wrobel, is known to have made political contributions of US$1,500 to the Democrats in 2004, and US$4,600 to the Republican Party during the 2008 US Presidential Campaign.
Sithe Global Canadian Power Services Ltd., an affiliate of Sithe Global, contributed $5,000 to the Ontario Liberal Party during the 2007 elections there. Both the USA and Canada have limits on the amount that can be contributed to any political party, and these amounts are reported and made public.
In Guyana where there is no restriction on the amount of political contributions one can make, and there is no system in place that I am aware of, to effectively monitor contributions made to any individual or political party; leaves me to speculate just how generous Mr. Bruce Wrobel of Sithe Global and Makeshwar Fip Motilall of Synergy Holdings will be to the re-election campaign of the PPP/C as a sign of gratitude. In the millions? I wonder.
Harry Gill
JAGDEO ADDING MORE DANGER TO GUYANA AND THE REGION
Apr 17, 2024
2024 CWI Regional 4-Day Championships Round 7…GHE vs. CCC Kaieteur Sports – After a highly-successful round 6, Guyana Harpy Eagles will look to take full advantage of the out-of-sorts...Kaieteur News – Every school teacher should take a close look at the students in his or her classroom. The probability... more
By Sir Ronald Sanders Waterfalls Magazine – On April 10, the Permanent Council of the Organization of American States... more
Freedom of speech is our core value at Kaieteur News. If the letter/e-mail you sent was not published, and you believe that its contents were not libellous, let us know, please contact us by phone or email.
Feel free to send us your comments and/or criticisms.
Contact: 624-6456; 225-8452; 225-8458; 225-8463; 225-8465; 225-8473 or 225-8491.
Or by Email: [email protected] / [email protected]