Dear Editor,
In his New Year’s address, President Ramotar attempted to assure Guyanese that in the coming months he will achieve financial closure for an estimated US$900M to commence construction of the proposed Amaila Falls Hydropower Project (AFHP) on the Potaro River and complete the job to bring all the attendant benefits to his people.
President Ramotar’s political gaff is similar to the one by former President Jagdeo a few years before he vacated office as AFHP went no where during his tenure despite his flowery promises to have the project completed before he left office.
President Ramotar’s pronouncement lacks substance as it appears to be more of a political gimmick to win public support at the next poll rather than a serious attempt to develop a hydropower project and negotiate finance for it, promises unachievable in such a short span of time. Firstly, a feasibility study will have to be carried out to determine AFHP’s economic, financial and technical viability.
If one was already done then the document will have to be updated to reflect real time costs and circumstances if it is to be seriously considered by prospective investors. If after review by them the project is considered high risk with low return then it is going nowhere. Further, investors stay clear of investing in politically unstable countries such as Guyana however attractive the returns. AFHP is in its preliminary stage of development as much work remains to be done to complete the river crossings for the access road, geological site investigations for final design of the dam and penstock foundations as well as that for the power station. The final detailed design for the project has to be prepared including that for the transformers and transmission lines to the coast as well as tender documents and cost estimates. The project then has to be put out to tender, costs analysed and awards made for construction. Does President Ramotar have a time frame for completion of these items of work including that of the project or does he tacitly expect it to be another East Bank Highway Project once construction contracts are awarded for AFHP? The President should stop pandering in an election year and state specifically where the money will come from to achieve financial closure for his administration’s flagship project as without assured and committed sources of finance, AFHP will once again be going nowhere despite all the sweet talk of the project laying the foundation for a brighter tomorrow for all Guyanese. It is unfortunate that the government has already expended over US$30M of its scarce resources to build an access road with appurtenances to get to the AFHP site without first obtaining finance to fund the project. The costs (capital + maintenance) which are still rising for this white elephant will impact adversely on development of the country’s physical infrastructure so necessary to grow the economy to create jobs. The World Bank of which Guyana is a member has been the largest source of financing for hydropower projects in developing countries.
Strangely, Guyana never attempted to tap this source for financing the AFHP. President Ramotar/Finance Minister Ashni Singh (Guyana’s rep on the World Bank) could probably enlighten us all why this was so. Finally, President Ramotar is aware that the high cost and unreliability of electricity have been the biggest impediments to investment and job creation in Guyana but his government has made no serious attempt to address the problem by first changing the incompetent management of a politically controlled GPL and then reducing the large theft of electricity. Instead he continues as his predecessor to dream that AFHP would soon become a reality and provide cheap and reliable electricity for all Guyana. In much of the USA, a KWhr of electricity costs more than in Guyana but investments continue to flow into that country and creating jobs for all those newly arriving Guyanese.
Hence the government has to look beyond cheap electricity and remove those other impediments such as poor port facilities, roads, water supply, drainage of coastal areas, bribery and corruption that are disincentives to any investor.
Yours faithfully,
Charles Sohan
