Dear Editor,
In the SN of July 16th it was reported that a framework agreement for the proposed Amaila Falls Hydropower Project (AFHP) was signed formalizing the cooperation between Guyana Power and Light Inc. (GPL), Sithe Global Amaila Holdings Ltd., China Development Bank and China Railway First Group. The last two of these entities are agencies of the Chinese Government.

Guyanese should be cautious in their optimism and expectations of this announcement for the AFHP as this agreement is about ‘cooperation’ and ‘intention’ and not ‘commitment’ for funding and during the next 12 months or sooner any party could withdraw from its stated intent or fail to proceed to the next step as there is no penalty attached thereto.

It was stated some months ago that financing for AFHP was being sought from the Inter-American Development Bank (IDB), CDB, Sithe Global, China Development Bank and other interested investors. It is not clear what has become of the negotiations with some of these potential investors but it seems that the Government of Guyana (GoG) now expects that substantial funding for this project will come from the Chinese Government in a year’s time. Therefore, in the interval it is proceeding full speed ahead to construct access roads and transmission line trails which should be completed by the end of  2010 and soon thereafter construction is scheduled to commence on AFHP. In any case it is now evident that construction of this project cannot start until financing is assured which seems to be sometime late 2011 if indeed GoG’s high expectations materialize.

There is deep apprehension as to where this project is heading as in a year’s time the jungle will have started to encroach on the roads and trails soon to be under construction at great expense to Guyanese and with no maintenance plan in place not only for the roads, trails and drains but the pontoons and landings as well, remedial works at extra expense will have to be carried out before construction of the AFHP starts.

About that time also the country will be engulfed in new elections and the newly elected government will no doubt be engrossed in its organisation to formulate and execute policies to satisfy its election promises and the development of AFHP may not be on its priority agenda.

Sometime next year President Jagdeo, who recently sold his house and appears to be preparing an exit strategy, and those functionaries who are with him in China will have vacated office and may not be around to assist the new government entangle the complex financial instruments and deals with respect to AFHP and other projects they are now concluding on behalf of the already indebted Guyanese people.

Yours faithfully,
Charles Sohan