There is a “great likelihood” that Dynamic Engineering and Australian gold mining company Troy Resources Limited could reach a deal that would see the reactivation of the Tumatumari hydropower facility on the Potaro River, Prime Minister Samuel Hinds has disclosed.
He also revealed that government has approac-hed the Inter-national Renewable En-ergy Association (IRENA) to obtain partial funding at concessionary rates for a broad electricity scheme in the Rupununi including redeveloping of the defunct Moco-Moco hydropower facility. Hinds made the disclosures in a letter in the Sunday Stabroek as he responded to comments by APNU+AFC presidential candidate David Granger who recently told business leaders that if elected president he would move to maximise alternative energy options and signalled plans to reform the Amaila Falls Hydropower project. Granger had also lambasted the government for the abandonment of the Tumatumari and Moco-Moco hydro facilities.
Hinds, in response, said that government has been keenly pursuing alternative energy possibilities for Guyana. Speaking about the Moco-Moco facility, he said that when it was disrupted by a landslide in 2003, a team from China was brought to review the situation and make recommendations while the views of others were also sought and three options were put forward.
Option 1 involved replacing the damaged sections and relay penstock as it was with minimal correction to the sliding of the land. The budget was about $50 to $70 million “but the likelihood of repeated sliding would be minimally reduced – you would have to live with that likelihood and would insert enough flexible and rupture joints to minimize damage and quicken repair,” Hinds explained.
Option 2 involved replacing the damaged sections and relay penstock as it was, “but now with significant amount of geo-engineering of the sliding area thus reducing but not eliminating the likelihood of subsequent slides. Budget about $100 million to $200 million,” the Prime Minister said. He added that Option 3 essentially involved a total rebuild of the project with the penstock routed along another face of the mountain and a new power station built with the budget in this case being about $500 to $700 million.
Genius
“This was definitely not as Mr Granger stated a case of some “genius” deciding that we couldn’t afford $70M to realign the tube. Rather, we did not accept Option l, with the chance that the land could slide again in subsequent rainy seasons, as there have since been. One could imagine the PNC opposition then querying, which “genius” wasted some $70 million of public money, just putting the penstock back in place and having it broken again in a subsequent slide,” Hinds declared.
He said that government has been pursuing opportunities with interested Brazilian companies -typically small and not very well known- for the redevelopment of Moco-Moco.
Further, he disclosed that last year, following calls from IRENA for renewable energy projects which the agency may consider for funding – half the amount at concessional rates – government proposed a Rupununi electricity company based on developing Wamakaru falls, about 3-4 megawatts (MW), redeveloping Moco-Moco, judicious quantities of wind and solar at various villages, with back-up Heavy Fuel Oil at Lethem (2×2 MW); and with a main transmission backbone linking Lethem, Annai, Santa Fe Farm, Karasabai, and subsequently, Aishalton.
“As presently envisaged this would be a public-private partnership of about US$20 million with the government guaranteeing the US$10 million loan from IRENA,” if the allocation is granted, Hinds said.
“Last year we got over the first hurdles but the concessionary rate was not concessionary enough for the government to guarantee the loan. This year we are being offered a lower rate sufficient to attract the government guarantee. It is projected that if we win the IRENA financing, electricity would be generated and transmitted to the centre of villages across the Rupununi at an average, blended all-in cost of less than $40 per kWh. And this could happen in four years if we win an IRENA allocation. If not we would keep looking for a way to get it done, but prices would be significantly higher with a purely commercial venture,” Hinds wrote.
As it relates to Tumatumari, Hinds noted that Dynamic Engineering was granted a licence to redevelop the Region Eight hydropower facility and the early business plan focused on producing wood and stone products in the area. “The startup mini-electricity utility at Mahdia was then pursued. We could offer only what the demand and readiness to pay of that market would be; no one could offer guaranteed quantities. That market seems not to have been enough to satisfy the financiers,” he said.
“With the knowledge of the Karouni gold mine coming on stream in the Kaburi area, the government encouraged both Dynamic Engineering and Troy Resources to get together on obtaining power from Tumatumari. My latest update from both parties is that there is a great likelihood that a deal of mutual benefit would be concluded and implemented,” the Prime Minister stated.
Stabroek News had reported last year that Dynamic Engineering Company Limited of Eccles was spearheading the rehabilitation of the long-defunct hydroelectricity station in Region Eight (Potaro/Siparuni) as part of a wider plan for industrial development in the area. Work had begun in 2010 but halted in early 2012 owing to financial difficulties.
The hydroelectricity station at Tumatumari Falls on the Potaro River was the first hydropower station in Guyana and was constructed by British Guiana Consolidated Goldfields Limited to power two large dredges for gold mining there and at Konawaruk in the mid-1950s. It was said that it had an installed capacity of 1500kW and used 2 x 750kW Francis turbines. Following a prolonged workers’ strike, the operations were closed in the early 1960s but put back into use in 1976 by the Guyana National Service (GNS) to supply power to its administrative centre and other activities. Up to 1987, one turbine functioned.
Hinds also noted that government has been pursuing Brazilian interest in obtaining power from Guyana.
