Soil stabilisation dispute settlement soars cost of Wales electricity, natural gas plants by almost U$100 million over contract price

Last Updated on Thursday, 14 May 2026, 21:29 by Writer

The cost of the Wales gas-fired electricity generation and natural gas liquids plants has increased from the original contract price of US$759 million to US$856,152,000 as a result of a settlement with LINDSAYCA for extra cost of soil stabilisation, the Prime Minister’s office said on Thursday.

The government said as a result of the settlement, which was agreed to instead of moving to arbitration, the United States (US)-headquartered LINDSAYCA would be paid an additional 12.8 percent or US$97,152,000 over the original contract sum of US$759 million.

The settlement also includes project delay costs, the Prime Minister’s office said.

Under the deal, both parties have forgone their rights to historical liquidated damages, capped at 10 percent of the contract price.

“Underpinning this accelerated momentum is the decisive resolution of all outstanding contractual matters to ensure that construction advances without delay, the Government and LINDSAYCA Guyana Inc. have reached a resolution on two matters decided by the Dispute Avoidance/Adjudication Board (DAAB) in January of 2025 relating to soil stabilization works required at the Wales site and to delay-related provisions,” the Guyana government said in a statement.

While seeking to assure Guyanese that the “overall economics of the GtE (gas to energy) project remains firmly on track” and that the 300 megawatt power plant is expected to begin supplying electricity by the end of 2026 to be followed by all gas turbines fully commissioned by the first quarter of 2027 and the Combined Cycle operation to be completed by June 2027, the government suggested that the settlement agreement provides for the reinstitution of liquidated damages if there are further delays.

“Failure to meet these milestones will allow the Government to re-instate liquidated damages against the Contractor. This arrangement reflects prudent project management practice, ensuring that the resources necessary to complete construction are in place,” the Prime Minister’s office said.

The Prime Minister’s office said the number of workers is expected to increase to 1,100 in the second quarter of 2026 and peak between 1,400 and 1,600 workers as construction reaches its most intensive stage.

The government’s “substantial progress” has also been recorded in works at the site so far, with stringent milestones set to move forward following the agreement with LINDSAYCA Guyana Inc.

In 2024, the United States Export-Import bank approved a US$526,873,240 loan for the project, and repayment of US$60 million per year would begin in 2031.

The Prime Minister’s office on Thursday also sought to assuage concerns in some circles that the cost of the electricity and natural gas liquids plants was ballooning way over budgeted projections.

The government said the total expenditure for the wider project, comprising the 300 megawatt power plant, the natural gas liquids facility, transmission works, substations, 230 kilovolt and 69 kilovolt lines, and the new national control centre at Goedverwagting, East Coast Demerara, remains within the a 10 percent contingency of its budget of US$1 billion based on the published contract price.

The overall cost is not expected to exceed US$$1.1 billion including the 10% contingency, government added.

“The Wales Gas to Energy project represents a defining moment for Guyana and for the energy future of every citizen of this nation. We are satisfied with the progress being made and remain fully committed to ensuring that Guyanese households and businesses benefit. This project will cut electricity costs in half, and we are firmly on track to deliver on that promise,” Prime Minister Mark Phillips was quoted as saying in his ministry’s statement.

The government reiterated that the project aims to reduce electricity costs by 50 per cent and support domestic production of liquefied petroleum gas (LPG) for cleaner household cooking.

Beyond immediate energy benefits, the GtE project is expected to enhance industrial competitiveness and strengthen the national energy mix, the government said.