Based on recent news stories related to the Amaila Fall Hydroelectric Project (AFHEP), I feel compelled to suggest that work on the project be immediately postponed until after the 2011 elections to give a potentially new government an opportunity to do a thorough and transparent appraisal of this bungling and very costly project before continuing.
This suggestion is premised on the number of questions that continue to swirl around the changing estimated costs of the project, and now the appearance of the Chinese playing a dominant role in its construction and operation.
Originally, the estimated cost was pegged at US$450M, before jumping to US$500M, and has since been floated between US$600M and US$800M. Also originally, Synergy Holdings was supposed to be the main contractor, as per a published 2006 MOU, and it was supposed to hire Sithe Global to do the construction of the project, but now we are being told that China Railway First Group Limited will likely be building the plant.
Meanwhile, Synergy, which has been downgraded from being responsible for the entire project to merely building the US$15.4M road and river crossings leading to the facility, may now be hiring the Chinese to help build the road. Like the One Laptop Per Family project, this AFHEP project demands transparency now or a halt to its execution until after elections.
While China Development Bank and the World Bank were identified as the principal sources of financing for the AFHEP, the World Bank disclosed it had never received a copy of the project’s proposal for feasibility review, and it gave negative reviews of Sithe Global’s handling of the Uganda hydro project, which incurred both high cost overruns and the ire of Ugandans.
President Bharrat Jagdeo then proceeded to China last year where he signed an agreement with the China Development Bank and the China Railway First Group Company for US$500M towards the AFHEP, after which we learned that the World Bank finally obtained a copy of the proposal and would have released its findings by January last.
As we await the World Bank’s findings, we are suddenly being told that Chinese (whether being brought into the country or already in the country) will make up the majority of the labour force on the project, giving the appearance that the Jagdeo administration negotiated for more than just money; it appears as though it negotiated away the right of Guyanese to make up the majority of the labour force on a project that involves Guyana’s natural resources.
Moreover, if the Build, Own Operate and Transfer (BOOT) clause is in the agreement the President negotiated in China, it could mean that the Chinese, who provided the US$500M loan, could then become the builders and owners who will operate the facility until their investments are recouped, before transferring the facility to the GPL.
The foregoing scenario raises some serious questions, chief among them being, 1) how will we know the actual construction costs to determine whether there are cost overruns? And 2) how will we know the rates which the owners are charging us are fairly set? What is there to protect Guyanese from repaying the cost of this project for the unforeseeable future? Where is the transparency, Mr. President?
For their part, the Chinese, who are not known for transparency, are not in this for global helpfulness, but to make money while gaining political traction as major world players.
And since China has been dubbed the world’s biggest sweat shop where ordinary workers endure 12-hour days and get paid pennies to the new millionaires’ dollars, we have a right to ask whether there will be a disparity in the wages being earned by Chinese labourers versus wages earned by Guyanese labourers on the AFHEP. Any benefits on the table?
I am aware some Guyanese would rather forego those questions in favour of having the project built, even going so far to ask if there is anyone else willing to come up with the kind of money the Chinese have for the project. Personally, I think we do need the project, but I don’t think we should ever sell ourselves short when it comes to our precious natural resources or even our capacity to rise to any challenge that would develop our country. We should not give to the Chinese what we denied Western nations!
And what is US$700M or US$800M among Guyanese at home and in the Diaspora if we have a transparent and accountable government, with a clearly defined vision for building a hydro project to ease Guyana’s energy bills?
Overseas Guyanese remit over US$300M a year to Guyana, so all the government had to do was to come up with the plan for the project and offer government-backed bonds and or shares to Guyanese at home and abroad, so that this project will not only be largely financed by Guyanese, but owned by Guyanese who will be the consumers of the electricity generated. Why should we be paying the Chinese to develop and manage our resources when we can do it ourselves?
Mr. Editor, I may be wrong, but I have this gut feeling that this government does not want to see Guyanese prosper; only a handful of its friends, families and associates. I also wouldn’t be surprised if the AFHEP originally was supposed to be a public-private partnership in which the ‘private investors’ would have reaped the whirlwind of profits on the backs of local consumers, but after the ‘spit’ started hitting the fan, the government was left with a huge mess it is now trying to clean up at the expense of the this generation and probably the next.
I feel deeply uncomfortable that the government may have saddled Guyanese with a process and a project riddled with political, financial and logistical questions, and this is why this project should be shelved until after elections.
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