May 26, 2011 News
Sithe Global, the company developing the Amaila Falls Hydro project, has refused to answer further questions about the project.
This week, Senior Vice President James McGowan, via e-mail, said that Sithe Global had already spent “several million dollars” on the project.
Kaieteur News then e-mailed McGowan, asking him to say exactly how much money was spent. He was also asked to say what this amount of money was used for. Instead of answering, an e-mail was sent by the Sithe Global team stating: “Thank you for your interest in the Amaila Falls Hydropower Project. We will not be commenting further at this time. For more information, please see www.amailahydropower.com.” Civil society activist and chartered accountant, Christopher Ram, has 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.
This week, McGowan said that the project will be financed through debt from multilateral and development financial institutions in keeping with an agreed upon funding schedule over the course of the construction period, and equity from Sithe Global.
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 18 months ago to develop the project, after the original developers, Synergy Holdings lost its 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 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.
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.
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