On the eve of a consultation by President Donald Ramotar on the controversial Amaila Falls Hydropower Project (AFHP), two financial and accounting experts on Wednesday said the facility would cost too much and an end to blackouts was not guaranteed.
Chartered Accountant, Christopher Ram and financial expert, Ramon Gaskin- both harsh critics of the government- poured cold water on the hydropower project that government estimated would cost US$840 million.
But for Ram and Gaskin, the final figure could be US$2.4 billion over the next 20 years when the rate of interest and rate of return are calculated. Factored in, too, is the Guyana Power and Light (GPL) having to buy electricity from AFHP initially at US$110 million per year and increasing. GPL currently spends US$168 million annually on fuel, with 31 percent being a victim of technical losses.
“This project will not lead to a reduction in tariffs and in all probability rates will have to go up,” Gaskin told a forum at the Georgetown Club. Representatives of the international community, political opposition and the National Industrial Commercial Investments Limited (NICIL) were among the attendees.
Gaskin also raised concern that government was spending the most on the project but was getting a minority stake. He noted that Sithe Global was injecting US$150 million or about 18 percent of the cost and ending up with 60 percent of the company while Guyana would be contributing 82 percent but holding a 40 percent equity.
“This not a BOOT (Build Own, Operate and Transfer).This is a joint venture. This no longer a BOOT operation. All the talk about BOOT is a confounded lie,” he said.’
Ram added that there was no shareholder agreement between the Guyana government and Sithe Global
Gaskin and Ram, assuring that they were not opposed to a hydropower project in principle, called on government to cancel all existing arrangements and send the project out to international tender and competitive bidding.
He said the provision of blackout was included in AFHP documents. Reasons could include insufficient water, engineering, force majeure and total project blackout. “It’s all contractual, it’s legal, it’s acknowledged,” he said. In light of that and expected higher tariffs, Gaskin said businesses would not find hydropower and incentive to reconnect to the national grid. “There will be no justification for any self-generators to go back on the grid even with hydropower because you can still get blackout,” he said.
Gaskin noted under the proposed power purchase agreement, AFHP’s responsibility for generation and transmission will end at the point of connection and metering of the electricity supply.
Ram and Gaskin also highlighted that all payments will be pegged to the value of the United States dollar.
President Ramotar and a team of experts are Thursday morning expected to address an AFHP consultative forum at the Guyana International Conference Centre (GICC).