Local contractors buckle on Amaila Falls road

Apr 03, 2013 News

– China Rail moving in

With local contractors buckling on the construction of the road to Amaila Falls, the government has secured a deal with China Railway First Group Co. Ltd (China Rail) to get the job done.
Kaieteur News understands that the agreement is almost signed off and key officials of the company are expected in the country to get their bulldozers on the road.
Before the actual construction of the Amaila Falls Hydro Electric Project begins, an all-weather access road to the proposed site is necessary for the transportation of heavy-duty equipment needed for the construction.
China Rail will construct the section of the road called Block 7.
The government has expressed continuous concern about the pace of the road works.
Speaking recently about the move to China Rail, Head of the Presidential Secretariat Dr. Roger Luncheon said it reflected the “concerns about the capacity of the domestic contractor to deliver the goods on time”.
China Rail is the same contractor that was awarded the contract to build the Amaila Falls Hydro Electric Project.
Once the deal is finalised with the Chinese company to execute works on the section described as “very technical and difficult”, the previous agreements with local contractors to complete the same stretch will be voided.
Several contractors have been involved in constructing the road, through contracts that were assigned in “lots.”
The Amaila Falls Hydro Electric Project reached major milestones in September, with the signing of key project agreements in Xi’an, China.
The Engineering, Procurement & Construction (EPC) contract, valued at US $506 million, was executed by Amaila Falls Hydro Inc. (AFH) and China Railway First Group Co. Ltd. (CRFG). Neither Guyana Power & Light Inc. (GPL), nor the government is a signatory to the EPC contract. AFH, as owner of the Project, has the contractual obligation to build and finance the construction of the plant, then sell the power to GPL, pursuant to agreements to be entered into with GPL and the government.
The Investment Agreement, governing the fiscal arrangements and certain legal obligations related to CRFG’s activities in Guyana with respect to the Project, was executed by CRFG and the Government of Guyana.
The Mandate Letter, an agreement that formally initiates the documentation and due diligence phase related to the planned participation of the Inter-American Development Bank (IDB) in the financing Project, was executed by AFH and the IDB.
On January 12, 2012, the government cancelled the controversial contract that was won by Synergy Holdings, under the Bharrat Jagdeo Presidency.
The new Donald Ramotar government terminated the contract from Fip Motilall’s Synergy Holdings and moved to seize all of his equipment. The government further determined that the contractor would pay US$120,000 in liquidated damages.
Luncheon had previously indicated that even if costs are recovered maximally from Synergy Holdings, the cost will still be more than the original contract sum.
The project site is located on the Kuribrong River, a tributary of the Potaro River in West Central Guyana. The nearest point of access is the airstrip at Kaieteur Falls on the Potaro River, approximately 15 miles to the south.
An overland trail exists from Kaieteur to Amaila. Access is also provided overland by an all-weather road through Tumatumari on the Potaro River and on to Mahdia and Kangaruma.
River access along the Potaro-Kuribrong Rivers to the foot of Amaila Falls involves several portages around rapids and waterfalls.
The road from Tumatumari was recently extended to Mahdia/Kangaruma that brings the project closer to the site, but approximately 30 miles of additional roads needed to be built to the top of Amaila Falls.
The Government of Guyana had granted the road building contract in March 2010.
The then Bharrat Jagdeo government had vociferously defended the contract given to Motilall and his company, Synergy Holdings, and refused to terminate the contract, despite mounting controversy over Motilall’s suitability and ability to complete the contract.
Government has allocated US$80M in this year’s budget for the Amaila Falls Hydropower Project. This sum is Government’s equity in the project and comes under Guyana REDD+ (Reducing Emissions from Deforestation and Forest Degradation) Investment Fund – GRIF, Dr. Ashni Singh, Minister of Finance, said in his budget speech last week.

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Local contractors buckle on Amaila Falls road

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