The Amaila Falls hydroelectric project is estimated to cost roughly US500 to US600 million. At the forefront of this project is Synergy Holdings whose principal and frontman is Makeshwar Fip Motilall. There are grave concerns about Synergy Holdings and about the real benefit of this project. To date, the Government of Guyana has not disclosed its power purchase agreement, which is the transfer cost to the people of Guyana. I am increasingly gripped with the sincere belief that the government is backing this project for the sake of political mileage and without any credible examination of its cost-benefit underpinnings, or most critically, the principal driver of this project, namely Synergy Holdings Inc.
Synergy Holdings’ first incarnation came as Synergy Holdings, Inc in Minnesota, USA, in 1997 with a registered address of Inver Grove Heights. According to the Minnesota Secretary of State website, Synergy Holdings, Inc is inactive. Synergy Holdings, Inc was then registered and domesticated in Florida in 2005. The Florida certificate signed by Mr Motilall reported Synergy Holdings, Inc’s address in Minnesota as St Louis Park and not Inver Grove Heights as recorded on the Minnesota Secretary of State website. Synergy Energy Solutions Inc was first registered in Florida in 2008. It is obvious that within a few years of its formation, Synergy and Mr Motilall were aggressively selling and pushing the Amaila Falls hydroelectric project to the Government of Guyana. Given recent pronouncements, it appears that perseverance found compliant ears. Due diligence by the government failed then and continues to fail now. Synergy Holdings has no experience, expertise and proven history of success in facilitating and developing a project of this magnitude. It palpably lacks the project management background in this type and scale of project. It has no background in hydroelectric power generation. It has not even moderate experience, expertise and skill in power generation or construction of power projects. There is no evidence of Synergy ever engaging in any major energy projects prior to the Amaila project. In fact, the evidence suggests that Synergy was formed with the express purpose of pursuing this project despite its abject lack of experience, expertise and skill. If more foreign businesses realize that it is this easy for their inexperienced and sorely lacking entities to gain millions of US dollars on far-reaching environmental and financial projects then Guyana would be flooded with incompetent and failed organizations selling their wares.
Synergy’s corporate changes over the years are not indicative of stability. The company has shifted jurisdiction from Minnesota to Florida and has several name and address changes. Synergy’s website is shoddy and frankly lacking in information for a company spearheading a massive project. The corporate address has changed several times since incorporation. The address on the recent Florida corporate filing does not match the address on Synergy’s website. The only constant has been Mr Motilall who remains the only shareholder of all these entities. The original filing for Synergy Holdings, Inc in 2005 in Florida shows a total stockholding of either $100,000 or $150,000 on the basis of 10,000 shares worth either $10 or $15 each. Understandably, companies grow but a company with total issued share capital of either $100,000 or $150,000 in 2005 now administering a US500 to US600 million project including overseeing building roads, bridges, etc, and getting US millions is either the demonstration of remarkable business ability or being in the right place at the right time or a combination of both.
Mr Motilall’s perseverance cannot be diminished. He literally created a company with no experience in hydroelectric power generation and is now spearheading a large hydroelectric project. Amazingly, his company did not participate in any major hydroelectric or electricity generation project in the USA or around the world since its inception in 1997. In the 13 years since its formation, Synergy has not gained any quality or possibly any experience in hydroelectric project management or construction or electricity generation. Synergy has not built its profile or gained expertise and experience in its 13 years of existence. It simply sat and waited on Amaila, the only project it has undertaken and probably will ever undertake. Kudos to you Mr Motilall; you have certainly read the Government of Guyana well and understand its inherent weaknesses. How the government managed to entrust a massive financial and environmental undertaking worth US500 to US600 million dollars to a company with such glaring shortcomings and no track record in this field is mindboggling and reeks of waste, poor planning, failed due diligence and stunning incompetence. This is a shocking insult to the people of Guyana. Why should Guyanese be paying for this incompetence? It bears repetition that Synergy has no expertise in any project of this nature and magnitude. The network of roads has expanded from an initial 30 miles to 110 kms (69 miles). The cost has risen from estimates in 2002 of US321 million to now US367 million recently tossed around. The people of Guyana should beware.
Yours faithfully,
Michael Maxwell
Editor’s note
We sent a copy of this letter to Mr Fip Motilall for any comment he might have wished to make and received the following response:
“Thanks for forwarding this letter for my review and frankly, I am not sure where to start to respond because this person has no clue of the deal. I had indicated to your [reporter] Mr Mark McGowan that I will be doing a press release as there are so many unsubstantiated claims and errors made by the people who want to write these letters, that it seems difficult to understand that in all the years of following the project (as many interested Guyanese have because of its national significance) this letter writer seems to missed two or three basic points.
“1.0 This is a private development meaning government does not spend the US$500-600M but rather Synergy, our partners and the lenders do. This is a privately funded project with GPL purchasing the power. The cost of the power from Amaila to GPL is going to be less than 50% of what it costs to produce with fossil fuels. And in 20 years this project gets turned over to Guyana (yes even this letter writer gets to own piece of it) for $0.00 dollars. At that point, and for the next 80+ years, Guyanese will enjoy a generation cost of US$0.025/kwh… yes, that is not a typo… I meant ¼ of 1 cent/KWH.
“2.0 The developmental costs to date on this project are in excess of US$4M. Synergy has spent over $1M of our own money developing this project. Does that sound like sitting back and waiting for government to do something? What were we developing? Site drilling on 3 different programmes, surveying, design, bid specifications, evaluation, engineering, and all that jazz. The engineers on this project are MWH (formerly Harza Engineering). They have designed over 70% of all the hydro dams in the world, so I think we have competent people on the job.
“3.0 If this letter writer had bothered to follow our “shoddy” website, he would have noticed that Synergy/Motilall has done several real estate developments in USA totalling in excess of US$50M in the last 8 years.
“4.0 Synergy Holdings registration moved from Minnesota to Florida because I moved the company so we can be closer to Guyana to carry out development works. Synergy has been the same company that started and continues to develop Amaila Falls. Synergy Energy Solutions did not replace Synergy Holdings but rather it is a sister company set up in 2008 to do solar and wind projects in USA based on the increased awareness of green energy in USA.
“The misinformation in the press is unbelievable, and that’s why I need to do a detailed press release/conference, but I am right now focused on getting our team and equipment on the ground so we can move on this access road, etc. For the public’s information, we are in the final stages of financial closure with IDB and other multilaterals, and as such there is a period of confidentiality during these negotiations that is normal for these deals. We were asked not to do any press releases, etc, during this time as we are dealing with a very fluid situation, and until all the commitments are in place the multilateral banks do not want to pre-empt their boards by appearing to have made a decision to fund a project before the bank’s board has been briefed and approval given. The same is true for the equity partners.
“I therefore request patience and continued support from all Guyanese, and I assure you that the last 12 years of development of this project have not been easy, so let’s not scare away foreign investors by making unsubstantiated claims in the press.
I know we are all excited and want this to happen, and it will shortly. Let us work with our lenders and get this deal built so all Guyanese can enjoy cheaper, more reliable power. You have waited for 12 years, so 8 more months is not such a great deal, especially when you find out that this project is no longer 100 MW but its current size is 154 MW (hence the higher price tag).
Amaila Falls will guarantee Guyanese cheaper and more reliable power, far into the future. In fact, the construction of the project has already started with this access road as the construction time for the total project is 48 months, which includes 8 months for the access road, so in actuality, we will be able to bring in the hydro in 48 months from today or 40 months from completion of the road. This is a very complex deal and this little response does not do justice to it, but I promise to give a more complete project update shortly but I felt it necessary to make sure additional misinformation does not get out there. Thanks for the opportunity to respond.”
