Does the US Ambassador know America’s per MW hydro construction cost is US $2.94 million vs Amaila’s US $5.1 million?

Aug 23, 2013 Letters

Dear Editor,
The US Ambassador, Brent Hardt, is doing his job. He is seeking to advance the interest of American businesses and he must be commended for it. But his call does not, I repeat does not, alter the financial and economic risks and repercussions of this Amaila hydropower project for Guyana and the Guyanese people. This is a massive project the Guyanese people will have to pay through the nose for. It is an economically unsound, financially shaky, cost prohibitive and fundamentally catastrophic project for a nation already swimming in debt. So, any decision on it must be in the best interest of the Guyanese nation. And the Amaila Falls hydropower project as presented today is not in the best interest of the Guyanese nation! I know the supine politicians in this country, always willing to subjugate national interest for personal endearment to foreign powers, will be swayed by the Ambassador’s plea. However, unlike the Ambassador’s call for local government elections, a democratic cornerstone of any society and a valid demand that will strengthen governance in our society and yield positive value, this call for Guyanese political consensus parties to jump over this Amaila Falls into an ocean of debt is simply an opinion that is unsupported by economic benefits.
This deal in this format will economically devastate Guyana. Contrary to what the Ambassador says, Amaila Falls will not chase foreign investors away. A repackaged Amaila built at a reasonable price will attract investors, including many American investors. The US Department of Energy tells us that overnight capital costs for hydropower projects in the USA is $2.94 million per megawatt (see http://www.eia.gov/forecasts/capitalcost/ ). This is America, one of the wealthiest nations on the planet and a place where the cost of labour is significantly higher than Guyana. Overnight capital costs included civil and structural costs including construction costs, mechanical equipment supply and installation, electrical and instrumentation and control, project indirect costs and owners costs. If America can build hydropower projects at US $2.16 million per MW lower than Guyana and American companies can make a profit doing so, why should a dirt poor, godforsaken, trampled, struggling country like Guyana pay US $5.1 for hydropower? If the land of milk and honey for many Guyanese could do it so cheaply and yet so profitably, then US $5.1 million per MW is an outlandish cost for any poor nation to bear.
If American companies can build some of the finest hydro facilities in one of the best places to live on Planet Earth for US $2.94 million per MW, why is it going to be detrimental and dissuading to foreign investors and specifically American investors who make profits at US $2.94 million per MW to not want to come and build in Guyana at this price or much lower when cheaper labour is factored in? If the right foreign investors, including many major American hydro construction outfits are brought in to bid on a retendered Amaila project, the sheer volume of competing investors would create a reduction in costs. In the USA, a project with the exhorbitant cost will generate the incredible American spirit of resistance. So, why not in Guyana? Everybody needs democracy, fairness, good governance and proper spending of taxpayers’ dollars. These are formidable planks of any society marching towards a better life. Americans demand it at every turn and have built a remarkable society doing and demanding this. Guyanese are simply doing the same on Amaila.
M. Maxwell

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