Dear Editor,
In a letter which appeared in the media on March 22, Prime Minister Hinds stated that failure to implement the Amaila Falls Hydropower Project (AFHP) on the Potaro River will stunt the growth of the economy and continue to keep Guyanese poor. He claimed that the PPP government has been in the forefront to convert the state’s electrical power source from petroleum based to renewable energy, but that the opposition party leader Mr Granger has sabotaged their efforts with counter-opportunistic promises to retool AFHP into a Potaro Development Authority to boost the growth of the manufacturing sector. The promises however were short on specifics.
Unfortunately AFHP has become a football for the politicians as the financial environment suggests that the project will not become a reality for many years to come for several reasons. Firstly, Guyana would be unable to obtain finance for such a costly project as the previously touted sources – the Inter-American Development Bank (IDB) and the Caribbean Development Bank (CDB) – do not have the substantial finances expected from them to invest in AFHP. The World Bank which is the largest source of financing with low interest rates for hydropower projects development in emerging countries, was never approached for financial assistance to develop AFHP by Guyana, one of its members, and Minister Hinds could enlighten us all as to why this was, since borrowing for high risk projects from the world’s capital markets could be very expensive as was evident from negotiations with the Blackstone Group.
Many were expecting a partnership with Brazil to develop a hydro-electric project in Guyana. It was plausible that if former President Jagdeo had entered into negotiations in good faith with former President Da Silva of Brazil, a deal could have been struck to make hydro-generated electricity a reality. However, this expectation is now history as Brazil’s economy is sputtering as the country faces a budget deficit of 6.75 % of GDP and an external debt of over US$250 billion. Therefore, Brazil’s parlous finances leave no room for debt financing of any large overseas project as its gross public debt is at 66% of GDP.
The Moco-Moco hydro plant penstock failed because of inadequate geotechnical investigations of the site prior to design. It was possible that with a re-designed penstock by experienced and competent engineers the plant could have been re-activated within reasonable cost limits, but under Minister Hinds’s watch the damaged facility was vandalized to the extent that it has now been abandoned. A similar fate befell the Tumatumari Plant, and it is doubtful that Dynamic Engineering would be able to mobilize the necessary financing to resurrect the facility to enable it to once again generate a reliable and cost effective source of electricity, the market for which is still to be determined.
The national election is due in May, and neither the PPP nor the PNC has developed any strategic plan to grow the economy and create jobs for all those Guyanese waiting to enter the workforce. Cheap electricity from hydro, wind or solar will help, but it is not a panacea for development of the country’s economy to get poor Guyanese out of the rut they are stuck in, as thriving countries such as Denmark, Holland and Singapore have no hydro-electricity but they do have good governance, which provides their people with reasonable living standards. Therefore the political mud-slinging as to who and what is responsible for keeping Guyanese poor is just a ploy by their elected representatives who have failed them badly, and are shifting the blame for their shortcomings.
Minister Hinds claimed that he has been responsible for energy and electricity for over 20 years. During this period he has overseen Guyana’s only source of electricity – Guyana Power and Light (GPL) – suffer from one crisis to the other, making it one of the most costly, inefficient and unreliable utilities in the region with daily black-outs being the order of the day. Instead of concentrating his efforts in improving the management, reducing the thefts of electricity and making the generating and transmission systems dependable, he has neglected his primary responsibilities and instead has hobbled GPL with subsidies to consumers for political gain, thus making the utility a loss-making state power monopoly and falsely expecting that AFHP will return GPL to profitability and provide cheap electricity for Guyanese. Further, he became a dreamer pursuing alternative energy possibilities with projects such as AFHP which will be going nowhere anytime soon with or without the support of Mr Granger, and despite the costly expenditure on an access road for a doomed project. It is no small wonder he has been shown the exit. Hopefully others who have been milking the state while doing nothing to improve the lot of the people except to assure them with false election promises for a good life will suffer a similar fate at the May election.
Yours faithfully,
Charles Sohan
