Jul 30, 2013 News
At more than US$5M per megawatt, the Guyana Government is pushing ahead to construct a hydro power plant that is more than double the amount being used for plants being built around the world.
The government is insisting that the project is economical, viable and sustainable.
The most recent comparison was undertaken by Former Auditor General, Anand Goolsarran. He found that hydro power projects around the world are being built at an average of US$2.32M per megawatt, as against the US$5.1M per megawatt being proposed for the Amaila Falls Hydro Electric Plant.
The plant was initially proposed to be built by Makeswar ‘Fip’ Motilall’s Synergy Holdings Inc but when he couldn’t find a financial backer, he sold his license for US$12M to Sithe Global.
In his comparison of the US$840M Amaila Falls Hydro Electric Plant, Goolsaran drew reference to the 147MW Plant proposed to be built in Pakistan at a cost of US$362M.
This would mean that the Pakistani project is being built at a cost of US$2.46M per megawatt.
Goolsarran pointed also to Nepal, where Spark Hydro Power is set to commence construction of a 101MW plant for US$186.2M
This means that the plant is being built at US$1.84M per mega watt.
In Guinea, Semafo Inc., a Canadian Gold Producer that mines in West Africa is building a 130MW plant on the Cogon River for US$230M. That translates to US$1.77M per mega watt.
It was noted too that last month the Ugandan Government awarded a contract for a massive 600MW Hydro Electric Plant along with a transmission line for a total of US$1.65B.
This translates to the cost per mega watt being US2.75M.
In 2009 Benin’s state owned utilities company, Communaute Electrique Du Benin (CEB) and China Sinohydro inked a contract for the construction of a 147MW plant for US$366M or US$2.49M per mega watt.
Goolsarran’s comparisons also drew on the fact that in November 2010, Brazil inaugurated six hydro stations with a total capacity of 645MW in the Goias State
These projects come with a total price tag of US$1.72B, working out to a per mega watt cost of US$2.66M.
The former auditor general did caution that the cost structures in various countries would vary depending on a variety of factors, “but the comparison does give us a general idea that Amaila Hydropower project may be significantly overpriced.”
Goolsarran is among the latest to come out criticizing the project in its current form and suggests that it is not too late for the Government to reset the process to allow adequate time for parliamentarians and other stakeholders to seriously reflect on the Government’s proposal.
According to the Former Auditor General, ever since the conceptualization of the project in 1997 the government did not see it fit to engage the National Assembly on the project despite its magnitude.
“This is despite the fact that it is this body that has to pass the relevant legislation to approve funding for the project, including lifting the ceiling for the guarantee of loans” to cover the Power Purchase Agreement between the Guyana Power and Light and the Amaila Falls Hydro Inc.
Amaila Falls Hydro Inc is the special purchase company incorporated in Guyana to build the plant and facilitate the payments from GPL to Sithe Global.
According to Goolsarran, it was only when the Government needed the support of the legislature that disclosures were made on a confidential basis.
“However, such disclosures raise more questions than answers and the action of the Combined Opposition in exercising caution and financial prudence appears quite justified.”
According to Goolsarran it is perhaps that the Government did not anticipate that it would have lost control of the National Assembly.
He said that had Government maintained a majority in the House, the Hydro Electric Power Bill along with the motion to raise the debt ceiling would have gained easy passage.
|Name||Price||MW||Cost Per MegaWatt|
|Mono River, Togo||US$366.6M||147||US$2.49M|
|Chinese , Three Gorges||US$23B||18000||US$1.3M|
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