Amaila Falls hydropower “was not killed by the opposition”- Patterson

Last Updated on Thursday, 26 January 2023, 19:47 by Denis Chabrol

Mr David Patterson

Ten years after A Partnership for National Unity (APNU) and the Alliance For Change (AFC) first refused to unconditionally support the construction of the 165 megawatt Amaila Falls Hydroelectricity Power (AFHP) plant, that coalition said foreign consultants had advised the then People’s Progressive Party Civic administration against that that project.

Opposition Shadow Public Works and Energy Minister David Patterson told the National Assembly’s debate on the 2023 National Budget that the PPP administration had been forging ahead with the project in 2013 though Keane Consulting had recommended that the project be shelved. In July 2002, an interim licence  to Synergy Holdings was issued despite an adverse report on the soundness of the project from their own consultants, Sir… one of your consultants, Keane Consulting Inc;” he said.

Mr Patterson said by July 2015, the APNU+AFC administration had met a team of Norwegian officials and was informed that the expected tariff would have been 25 US cents per kilowatt hour rather than the PPP administration’s much touted 10 US cents. He related that the PPP had changed the objective of the project to reduce emissions rather than the cost of electricity.

Mr Patterson said the coalition administration later realised that the actual cost of electricity from Amaila Falls would have been 30 US cents per kilowatt hour because the power plant would have cost  US$858 million plus US$138 million capital expenditure for the Guyana Power and Light’s transmission and distribution of the electricity from that site,  US$40 million equity for the sponsor and US$3 million for the relocation of 30 residents. “When we did the computation, Sir, this flagship cheap Amaila project that they came up with; the tariff ended up at 30 cents US. That, Sir, was why the project is dead,” he said.

While the PPP notes that the Norwegian consultants, NORCONSULT, had given a favourable review of the AFHP because it was prioritised and the only one with a full feasibility study, the former Public Infrastructure Minister, who portfolio had included electricity, said Norway’s Ministry of Climate and Environment sent a delegation to Guyana in 2018 and held talks with government and the Inter-American Development Bank about the US$80 million that had been owed to Guyana for the preservation of standing forests. Mr Patterson said the Norwegian team came to Guyana believing that AFHP was the only viable option. To the contrary, he said the Guyana government presented its energy transition plan which was fully endorsed by Norway during that delegation’s four-day visit. “At the start of the third day of the visit, the Team Leader announced that they had an epiphany. They discarded any idea of funding the Amaila Falls project and they fully endorsed the APNU+AFC’s energy transition plan,” he said. That plan, he said, was to spend the US$80 million on the construction of a 30 megawatt solar farm with eight hours of storage.

“Sir, for  the Amaila Falls project, for the record,  was not killed by the opposition. It was still-born. It died from malnutrition, Sir; a lack of financial and technical sustenance as well, Sir, bad parents,” he said.

Since returning to office in 2020, the government last year failed to kickstart the AFHP because  China Railway told the Guyana government it could not afford a Build Own Operate Transfer (BOOT) model for US$700 million under an Engineering, Procurement and Construction contract.

Rebutting, Home Affairs Minister Robeson Benn insisted that NORCOINSULT had supported the project. “We have the documents” and urged that the parliamentarians to read Mr Patterson’s documents “properly to understand what is being said.” He said if AFHP had been constructed, it would have provided clean energy to help “rejuvenate” Linden, bring back larger stripping machines and build a more than 1 million tonne alumina plant there. “That was what the Amaila Falls project ultimately intended to do- reduce power by half and bring back large industrial capacity in Linden but their Honourable Member Patterson would stand here again and excoriate the project, pull it down,” he said. He said it was not strange that the visiting Norwegian delegation had realised that the APNU+AFC did not support the AFHP.

Mr Patterson’s AFC had in August 2013 voted with the then minority PPP administration to pass the Hydro-Electric Power (Amendment) Bill and increase the debt ceiling. to GY$50 billion rather than the PPP’s desire for GY$150 billion.

Recalling the timelines, Mr Patterson the project dated back to April 1998, when the PPP administration had signed a memorandum of understanding with Makeshwar ‘Fip’ Motilall to undertake feasibility studies on the proposed AFHP after which he produced a report in 2001 and requested the issuance of a licence.

Mr Patterson said the then PPP administration had ignored its consultants and awarded a US$15.4 million contract to Synergy Holdings to build an access road to Amaila Falls was a bad choice.  Reading from a document in the House, Mr Patterson said the then administration’s consultants had informed that “the appropriate process was not followed as the evaluation was at best a qualitative assessment with too many unknowns and the recommendation cannot stand scrutiny”- that’s the recommendation to appoint Synergy Holdings.”

The road building contract to that company was terminated in 2012, having only completed 30 percent of the work and racking up an additional US$30 million. Mr Patterson recalled that both the Inter-American Development Bank and the World Bank had refused to fund the project.  Back in 2009, Synergy Holdings transferred their interim licence to Sithe Global and on March 2010 the then PPP-led administration received four bids for the access road and awarded a $15.4 million contract to Synergy Holdings