May 14, 2011 News
Sithe Global, the developers of the Amaila Falls Hydropower Project, says that it is confident in the ability of China Railway First Group to build the plant in northwestern Guyana, a senior company official has said.
In July last year, the Guyana Government signed off on a loan deal to build the project and formalize the cooperation between the Guyana Power and Light Company, Sithe Global, China Development Bank and China Railway First Group Company Limited.
At that time, Finance Minister Dr Ashni Singh said that the agreement clearly sets out the parties’ intent to bring financial closure within 12 months, or “ideally…sooner”. Sithe Global now says it expects financial closer towards the end of the year.
The Guyana Government has committed between US$40M to US$60M of the money it will collect from a forest saving deal with Norway for the project, though the final amount is still being negotiated, James McGowan, Senior Vice President of Sithe Global said this week.
Sithe Global has committed US$200 million to the project, which it says could cost as much as US$700 million.
Sithe Global has identified China Railway First Group to build the hydropower plant.
McGowan said Wednesday this week that the company’s main principles have 300 years experience in the power development business and they are confident of China Railway First Group’s ability to build the plant in Guyana.
However, the deal with the Chinese construction company is not yet final.
According to McGowan, the Engineering Procurement Construction contract with China Railway First group is still being negotiated.
“They will be fully responsible for the construction,” McGowan stated.
“We have a construction management group that will oversee the construction and upon completion we turn it over to an operations group, within Sithe, that will be responsible for operations,” he added.
McGowan said that Sithe Global has performed “extensive due diligence” on China Railway First Group and has recognized it as “one of the biggest construction companies in the world.”
McGowan vouched that China Railway First Group had done many other projects like this including hydro projects in countries foreign to China.
He said that Sithe Global has visited some of the plants that China Railway First Group has built.
“So we feel very comfortable and confident that this project will be built to the standards that we require, to give the reliability that we are guaranteeing to GPL,” McGowan stated.
China Railway First Group was founded in 1950, and is a core member of China Railway Group Limited.
The company’s website says it possesses “the super-grade qualification of general contracting for railway and highway engineering, first grade qualification of general contracting for municipal engineering and house building engineering, first grade qualification of professional contracting for railway track laying engineering, highway pavement engineering, tunnel engineering and hydraulic tunnel engineering, qualification of professional contracting for urban rail transit engineering, as well as qualification for international contracting, labor service and business.”
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