Dear Editor,
This is my position on the government’s latest press conference and the information reported by the government in that conference. I have questions for the government and Synergy; here they are:
1. The government at its latest press conference stated that Synergy had built roads in Florida and Georgia. The public needs to know the scale of these road-building projects to determine how they compare to the Amaila project.
2. Three local companies with local road-building experience were rejected in favour of a company with zero road-building experience on this scale. Mr Brassington stated that the government paid a higher than estimated cost for the project to Synergy. If the government could pay more than it estimated to a company with zero experience why not pay a little more (US$1.25M) to not one but three companies with road-building experience?
3. The RFP to bidders specifically required them to provide estimates for the cost of a multi-cell pontoon crossing across the Kuribrong River. Synergy flouted the RFP and proposed to build a permanent steel superstructure. This was not what the government wanted in its RFP but the government publicly referenced Synergy’s breach of the RFP and gave preferential treatment and favoured status to such action which was clearly outside of the RFP. A woefully inexperienced company failed to stick to strict RFP conditions and got favoured over those experienced companies that stuck to RFP conditions. Is this an example of the procurement laws the government so boldly crowed about at the press conference?
4. The Government of Guyana rejected tenders that met the pre-qualification and RFP terms and favoured one that did not on the basis of price, but nothing was seemingly considered in respect of quality. An investigation should be launched because the issues are whether Synergy gained (1) a financial/ cost advantage and/or (2) a competitive advantage to the extent that the government was more likely to accept a permanent steel structure as opposed to a multi-cell pontoon structure once proposed. Also, did the government breach any aspects of the Procurement Act? At a minimum, the government should have (1) amended the RFP and allowed new bids (2) restarted the entire process and (3) given the other bidders an equal and fair opportunity to amend their bids and propose their cost position on the permanent steel structure.
5. The Minister of Finance explained the pre-qualification criteria/process for Synergy. I cannot repeat this enough: Synergy does not meet pre-qualifications or the conditions required by the RFP. Anybody with half a brain can read the requirements and see that Synergy does not satisfy them and fails devastatingly on virtually all of them. I will not waste time repeating failures for the public. The men who relentlessly and shamelessly quote criteria knowing Synergy does not meet them can do some explaining for the public.
6. A still-to-be-selected engineering firm, from four submitted tenders, will provide general oversight of the works carried out by Synergy Holdings. Why give a contract to a company that has no experience and expertise and then have to hire an engineering firm to oversee that company? Will this oversight eventually cost more than hiring a company with experience and expertise and its own engineering team?
7. Who is paying for the insurance security bond provided by Hand-in-Hand Insurance Company, the government or Synergy?
8. The issue is not one of the government not paying more than for the work completed. It is the competency of the company doing the work and most importantly the quality of the work. The government has paid before for shoddy work and had to pay more to fix shoddy work. This project is US$500-600 million. If there were to be shoddy work here it would cost a lot of taxpayers’ money to fix.
9. One can derive from Mr Brassington’s statement at the press conference that there will be an annual tariff paid by the people of Guyana for this project for 20 years. That tariff will depend on (1) the cost of building the project and (2) the cost of the returns from those who invest in building the project. My question to this government is this: would Synergy and Sithe’s involvement in this aspect of the project be counted towards the cost of building the project and eventually result in higher tariffs to Guyanese?
10. Mr Brassington said the plant will result in a drop in electricity costs by some 40 per cent upon its completion. I say, prove it; but assuming he is correct could it have been done more cheaply if middlemen were taken out of the process?
11. If the project sponsor for the construction of the Amaila Falls hydroelectric power plant is Sithe Global Power, what purpose is Synergy serving still? Is it that Synergy still retains the licence for the project?
12. Given the government’s involvement in negotiations with IDB and the China Development Bank, the fact these entities rarely lend on this scale to private players and considering their regular practice of requiring state parties to indemnify loans, are the Guyanese people ultimately responsible for these loans from the IDB and CDB if Synergy pulls out or goes bankrupt or the project fails for some reason before the 20-year mark?
Yours faithfully,
Michael Maxwell
