Drop in price of commodities fuels optimism

Dec 22, 2008 News

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For decades, various administrations have experienced on-and-off struggles with securing hydropower to enhance this nation’s development drive; and with the current global financial meltdown, that aim is seemingly ever more elusive.

If the average Guyanese were not to guess this already, then President Bharrat Jagdeo, in his most recent press briefing, confirmed it when he said that the financial meltdown in the developed world would have implications for projects in Guyana, such as hydropower.

One may be inclined to hold the President to his word when he said, in his first press briefing this year, that we will build the Amaila Falls Hydropower Plant, “one way or another”.

However, the Head of State, in his most recent update on the status of the project, told media operatives that the most recent tenders came in too high.

He, however, expressed optimism for the next set of tenders, pointing to the recent drop in the prices of commodities such as steel and fuel, which are essential components for the construction of the hydroelectric project.

NO DECREASE IN ELECTRICITY RATES
Despite the fact that the nation was told by Prime Minister Samuel Hinds that hydropower did not necessarily mean lower electricity rates, the populace is still encouraged by the prospect of a stable rate, because the main input (water) of the hydropower facility would be readily available.

Hinds made the disclosure during a session with the Parliamentary Economic Services Committee in June of this year.

According to the PM, alternative energy for electricity generations, such as hydropower, would not see reduced electricity rates; rather, it would ensure a secure price from future significant increases due to the predicted upward spiral in fuel prices.

He noted that, at the time of the proposal for what is currently the largest hydropower proposal in Guyana, namely the Amaila Falls project, it was not feasible to build the plant and run the transmission cable.
“If anyone could have predicted at that time that fuel prices would have escalated to this point, then I’m sure that it would have been built…We would have been paying far less for electricity currently if we had built it,” said Hinds.

He added that even in early 2000, when the proposal resurfaced, it was still not feasible to do.
Hinds added, however, that given the escalating fuel price and the more than doubled demand for electricity on the national grid, he expects that by the end of the year there will be the ground-breaking ceremony for the project’s commencement.

ABOUT THE PROJECT
The project, according to the company that has undertaken its construction (Synergy Holdings Inc), is based on an initial study that was carried out between the years 1974 and 1976 to explore the hydroelectric potential under a grant from the United Nations.

That study was done by Montreal Engineering over the two-year period.
A number of sites were identified, but through a shortlist process, the figure was eventually trimmed to three “most promising” sites.

Further studies by the developer, between 1997 and 2001, relative to the demand for power, the economics, environmental, ecological and political impacts of developing each of these sites, led to Amaila as the location of choice.

In 1998, Synergy Holdings Inc. joined with Harza Engineering Company (now called MW Harza Global) to fund and undertake a detailed feasibility study and environmental impact assessment (EIA) for the first phase of the project.

Between 1999 and 2001, a full feasibility study and EIA was carried out on site, including surveying, drilling in excess of 400 metres, and several site visits by Harza engineers to evaluate the drill cores and the physical characteristics of the site and to install river-gauging equipment downstream of the falls.

A man-camp on site and an access road crew in excess of 50 personnel worked on this project for several months. Drilling equipment was flown in by helicopter, and supplies came in by river and the ATV access road.

Following the on-site investigations and mapping, several alternate designs were looked at, and the developers chose a final design that offered the lowest construction cost while maintaining the expandability of the project.

The Amaila site is located on the Kuribrong River, a tributary of the Potaro, and 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, while access is also provided over land 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, which brings one closer to the site, but approximately 30 miles of additional roads will need to be built to the top of Amaila Falls.

In mid-2005, serious talks were restarted between Synergy, the Guyana Power and Light Inc. and the Government in an attempt to finally put the project on a fast track development schedule.  Following a series of meetings with Government, an MOU was signed between the developers and Government on May 23, 2006, outlining their agreement to proceed with the development of the hydropower plant.

The construction process should have commenced in September last, when the tender process should have closed, but was subsequently extended by President Bharrat Jagdeo, who has publicly committed to building the hydropower station – estimated to cost approximately US$450M — before he demits office.

The fate of the project, at least in the near future, now depends on the extended tender process or, should that fail because foreign investment is dwindling, the Government commits to building it with taxpayers’ dollars.

What happens is anybody’s guess. Only time will tell what the fate of hydropower is in Guyana.

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