Sep 04, 2013 News
…Guyana agreed to have any arbitration in Washington DC
The Agreement that was entered into between Government and Sithe Global for the development of the Amaila Falls Hydro Electric Project, “shall be construed and governed by the laws of the State of New York, without regard to the principles of conflict of laws.”
This has been expressly stated in the leaked confidential project document for the Amaila Falls Hydro Project.
The document further states that any arbitration to be had, resulting from any disputes between the parties involved, shall be conducted in Washington DC, in the United States of America.
According to the leaked confidential project document, should a dispute arise between the parties in the agreement, they would have 30 days within which to attempt to settle in good faith. In the event that this fails, it would be determined in the US through arbitration.
According to the project document, should a dispute reach to arbitration the parties will have to apply the substantive laws of New York.
The agreement also says that any ruling handed down by the arbitration panel in the US, using US laws, would be binding and enforceable in any of the countries involved.
The deal signed onto by Guyana also said “all arbitration awards shall be payable in US dollars…However, amounts due with respect to any local Guyanese costs shall be calculated and payable in Guyana dollars only.”
The agreement says that each party shall bear the cost of the arbitration, including the remuneration of the arbitrator.
In recent weeks the Amaila Falls Hydro Electric Project has been coming under intense scrutiny particularly over the cost, the financing structure and repayment arrangements.
This past week one critic of the project, Ramon Gaskin, had opined that were it not for the insistence of the Inter-American Development Bank (IDB) that Government obtain parliamentary approval for two peripheral pieces of legislation relating to Amaila, no information would have been made available to the parliamentary parties.”
He said that had the information not come out, the project would have gone the route of the Marriott.
Gaskin said that like the Marriott, Amaila would have been “burdening consumers and taxpayers with a flawed project costing.”
The financing arrangement for the project, saw more than US$1B being committed for the development and construction of the project, leading Gaskin to call the project a “gigantic rip off.”
Financial Analyst, Christopher Ram, accused Guyana’s lead negotiator on the Amaila Falls Hydro Electric Project, Winston Brassington, of being embarrassed by the revelation of the amateurism he and his team displayed in negotiations with Sithe Global.
Under the arrangement to bring the Amaila Falls Hydro Electric Project into being, Guyana Power and Light Inc (GPL), had committed to spend some US$90M in Capital Works in order to prepare itself for the Amaila Falls Hydro Electric Project.
This money was to be in addition to the US$36M that it would have deposited in an account to service its ‘Senior Debt’ to the Amaila Project for the purchase of electricity.
This would also be in addition to the US$157.2M that Government had committed to Hydro Project.
This brought the total financial commitments on the part of GPL and Government to a whopping US$1,041M or just over US$1B.
A month ago the government had maintained that the overall cost of the Amaila Hydro Project would be US$858M.
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