US$$M Amaila Falls Road…Project behind schedule again, more extensions granted

Aug 07, 2012 News

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By Gary Eleazar
Region 10 continues to be blockaded, as residents have decided to stand their ground until their demands are met. The administration has been lamenting dire consequences to dependent communities and projects.
One such dependent project which is now being threatened as a result of the blockades is the Amaila Falls Access Road.
This publication has learnt, however, that even before the Linden blockades, the road project had begun to experience problems once again as a result of incessant rainfall in the general location.
Following the termination of a US$15.4M contract that had initially been awarded to Makeswhar ‘Fip’ Motilall of Synergy Holdings Inc., several sections of the road had to be contracted out to different contractors.
Kaieteur News has learnt that every Contractor that had been awarded a section of the road has requested extensions and all have been granted.
The extensions have been made as a result of the weather patterns that have been putting a hold on works, and according to reports, the extensions only take into accounts days lost as a result of the weather.
It has been conceded that the project is again behind schedule and a conservative estimate, based on weather and other projections, now places the deadline at October month-end.
Those affected sections are “between two and six”, while the final section, “seven,” has encountered a plethora of separate difficulties, the latest being the Linden impasse. That contractor has only this past weekend been able to mobilise the equipment and have it transported to the worksite.
The scheduled departure date for the equipment to be taken to section seven of the access road was on July 18 – the day Lindeners commenced their then ‘five-day’ shutdown of the community.
Three persons were shot and killed during the demonstration, presumably by ranks of the Guyana Police Force, and the community has since been on a rigid lockdown.
Traditionally, as a result of its economic viability, the Linden route onto the Mabura roadway has been the preferred avenue for transport, but as a result of the blockades in Linden, the contractor had to use the river route.
The equipment had to be trekked by river, firstly to Bartica, before making its way to the Amaila Falls site, with the works on that section finally being able to commence.
As it relates to ancillary supplies that the contractors on Sections Two to Six would require, this publication has been reliably informed that supplies are currently on reserves.
Fuel, food and other supplies have to be trekked in by river on an emergency basis, and according to reports, the situation is moving disturbingly towards “dire.”
It was in early June, last, that Head of the Presidential Secretariat Dr. Roger Luncheon announced that Cabinet had approved the contract for the final stretch of the Amaila Falls road.
“Public Works: For the construction of the Amaila Falls access road section seven, that’s the Kuribrong River bank to Amaila Falls. This contract, he confirmed, was for $832.8M.
The Access Road Project serves as a part of Guyana’s US$100M equity in the proposed US$840M Amaila Falls Hydro Electric Project (AFHEP), which is currently on hold, as the country awaits word on a US$175M loan from the Inter-American Development Bank (IDB) to complete the financing arrangements.
That financial closure has since been pushed back to 2013, according to the Company contracted to undertake the project, Sithe Global.
The 165MW Hydroelectric Power Plant is slated to be built at the base of the Amaila Falls.
Funding for the project comes from a variety of sources including US$100M in equity from the Guyana Government.
Guyana has already committed US$15.4M for the construction of the access road as part of the equity, with the remainder of the equity coming from the LCDS initiatives such as the Memorandum of Understanding signed with Norway for some US$250M
The majority of the AFHEP funding (70 per cent) will be coming from the China Development Bank and the IDB.
The IDB is being sought after for US$175M while China Development Bank will be providing some US$413.2M, and US$152.1M from Sithe Global, bringing the total project cost to US$840.3M.
In terms of how the money will be used, the Engineering Procurement and Construction (EPC) cost of the actual project will amount to some US$519.6M.
The total capital costs for the project, according to the Sithe Global officials, will be US$652.5M, taking into consideration additional construction, development, start-up, as well as a contingency.
The remaining US$187.8M will go towards financing costs which include Interest during Construction (US$97.1M), Lenders Fee and Advisory Cost (US$34.9M), and Debt Political Risk Insurance (US$55.7M).
At a projected average tariff of US$101M, the plant is expected to rake in more than US$2B over the 20-year period on the Build Own Operate and Transfer (BOOT) life of the project.
The plant is slated to last for at least 75 years.
Sithe Global has in the past indicated that it would be willing to incorporate the access road project into the larger project rather than lose on all of the gains made thus far.
Sithe Global has reportedly invested some US$11.1M in the project.

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