President Bharrat Jagdeo says that if the contractor for the road to the Amaila Falls does not meet the standard required the bid could be terminated and he stressed that the decision flowed from public tendering.
In an interview with Stabroek News at the Holmenkollen Park Hotel in Oslo, Norway last Friday, the President defended the process through which the contract was awarded to Synergy Holdings headed by Fip Motilall. “The thing is that we went through a public tender. We got the engineers led by Walter Willis and the others to evaluate the bids. Politicians shouldn’t be giving contracts to people. They have to have a public tender. You have a technical team assess capability and price and then they make a recommendation to the national tender board which then comes to the cabinet for a no-objection. This is the process that we have to follow. That’s the only transparent process,” he declared.
Asked whether he was concerned given recent revelations about the US-based company’s experience and capabilities as it relates to road-building, the Head-of-State responded that Guyana is not exposed financially. “I have argued that we have to have strong supervision because we are not exposed. Every money that we advance to him is being covered by a bond. So we’re not exposed financially to him. There is the risk that he doesn’t do the road according to the quality, there is that risk so it means if you have strong supervision from day one… that will solve that problem or if he can’t comply then you terminate the bid and we’re not exposed because you’ve paid based on work done,” he said. The President did not address concerns raised that Synergy does not have the type of road building experience which was originally required in the invitation for proposals.
The President told this newspaper that there has been a lot of misinformation about the hydroelectricity project singling out a report that said it would cost US$650 million. “It’s not so. The project cost is, after public tender where you saw 20 companies pick up the bid documents and five companies sent in bids, the final cost for the hydro will be US$306 million, the transmission line US$145 million through a public tender and US$150 million is there for contingency and interest cost,” he said. “So the project is US$450 million.”
He emphasized that the project is good for Guyana. “GPL has indicated… that the tariff could decline by as much as 40% after the hydro is completed,” he said, stressing that Guyanese could see as much as a 40% reduction in the payment of electricity bills. The President said when fuel prices were high in 2008, power was being generated at 18 cents per kilowatt hour and this was only operational costs, excluding capital costs.
“We will buy the power on average at 10.9 cents per kilowatt hour here and that includes all the costs. And this will be stable for 20 years, ok, and after 20 years the project will be handed over to us for free. Hydropower is like 80 years. Maybe 80 to 100 years you can run it. So for 60 to 80 years we will have the hydropower at no cost to GPL or to the government and people of Guyana,” the President told Stabroek News.
“This is a good project. They keep shifting about Africa and all over the place. I’m not concerned about those countries. I’m concerned about Guyana,” he added.
In defending the process through which the tender was awarded for which the administration has come under a lot of criticism, Jagdeo said that a solid evaluation team recommended the project and it was awarded it on that basis. “We have to ensure that the supervision team is strong enough to see that the contractor meets the standard set for the road,” he said. “The road was public tender. IDB is working with us in this regard to ensure that we have all the environmental safeguards in place; to ensure that the road… while it has to be built, that it minimizes the impact on the ecosystem and communities. So we are paying particular attention to those issues too,” he continued.
“If I start clouding this with my opinion then the person I may like may get a contract and the one I don’t like may not get a contract. You have to have [a] public, open process. We follow that process,” he declared. “The newspapers can’t want politicians to interfere with technical processes too much or blame me when a technical process comes up with a recommendation and we agree with that recommendation. Had I said as a politician don’t give it to him, give it to another man, then the same newspaper would have said Jagdeo interfere with the tender process. So you can’t have it both ways,” the President told this newspaper.
Quizzed on the eight-month time-frame for the building of the road which according to a report was not sufficient, the President said it could be built within that time. “I’m sure the contractor would want a longer period. We want to push him so even if we give him an extension, which I don’t want but if the engineers say there must be an extension for whatever reason then that’s fine but we are pushing them to finish the road and not to compromise on quality in a shorter period so that should be in government’s favour. The shorter we fight the road, its less costly and the earlier we get to the hydro. So the eight months I’m told that it could be done if they use several crews,” he declared. “So far I’ve heard he’s meeting the schedule. This is how I see us proceeding,” he added.
Head of the Presidential Secretariat Dr Roger Luncheon had said earlier last week that the contractor was in a difficult position.
“We’re looking to financial closure by year end so the reason we are building the road before is that we didn’t want to sit on US$450 million of debt for eight months or a year while the road is being built at eight percent,” the President explained, He said if this is not done a large interest would have to be paid servicing the loan. If it is completed by financial closure then money is saved and translates into lower power costs to people, he added.
