AFC leader Khemraj Ramjattan yesterday dubbed Sithe Global’s decision to walk from the Amaila Falls Hydropower Project (AFHP) a “huge disappointment,” while warning of the implications for future investment.
“I am disappointed in the move by Sithe Global. The disappointment is huge… I am crestfallen knowing how difficult it is to find financing,” Ramjattan told Stabroek News, one day after government confirmed that the developer had made the decision to withdraw over AFHP’s failure to win political consensus among the parliamentary parties. “It will have tremendous implications for Guyana as an investment destination. We have to remedy the situation to make investors feel comfortable with the country,” he added.
Sithe Global walked as developer of the US$858.2 million, 165 megawatt hydro venture after the main opposition APNU last Wednesday voted against the Hydro Electric Power Amendment Bill 2013 and a motion to increase the ceiling of loan guarantees, unlike the AFC, which backtracked on its earlier opposition to the measures and voted yes along with the government.
Ramjattan defended the prudence of the party’s decision to pass the back measures in the National Assembly, saying there were other opportunities to stop the project if it was not felt satisfied it was good for the people of Guyana.
Ramjattan noted that the government would have had to at some point return to the Parliament for a sum of $19 billion in GRIF funds cut from the budget earlier in the year. “I am disappointed with APNU for not supporting the project,” he said. “I am willing to support anyone who is willing to put the capital to get the project financed cheaper,” he added.
Ramjattan said that it is necessary that the government provides the necessary information on these large projects so that there could be the necessary buy in to allow it to proceed to completion. He said that while retendering for Amaila is an option, because of the Sithe Global brouhaha investors may want to demand higher returns on their investment.
APNU’s chief spokesman on economics and finance Carl Greenidge, in reaction to Sithe’s withdrawal, said the government failed to persuade legislators on the merits of the AFHP despite political consensus being a prerequisite. He emphasised that APNU wanted clearer explanations of the mechanism used to arrive at the conclusion that the final tariffs to the consumers would be lower than they are today. He said that in meetings with the Inter-American Development Bank (IDB), officials of the Bank could not give the assurance that tariffs were not going to increase after the coming into operation of the hydro dam.
Greenidge said too that the financial package for the project drew its fair share of criticism from the party with regards to the apportioning of debt and equity.
Meanwhile, Ramjattan yesterday also disclosed that the AFC intends to speak with the Brazilian Ambassador on a project on which Brazil is willing to partner with Guyana. He said that the AFC recently viewed a presentation which showed the party details of this project.
