IS HISTORY REPEATING ITSELF?

Apr 20, 2010 Features / Columnists, Peeping Tom

If you are building a house, the first thing that you would do is to clear the land. But you would not begin to clear the land, unless you were certain that you would be able to find the money to build.
In the previous column on the Amaila Falls Hydroelectric Project, the observation was made that the contract for the building of the access roads to the site where the hydroelectric plant will be constructed has been awarded even before the financing of the project the hydroelectric plant) has been sealed.
We are told that financing may be sought from the IDB or the Chinese government. We can safely rule out the latter since the Chinese government is going to insist that their government’s financing of any major project must involve their companies being allowed to bid, and in the case of the hydroelectricity project, the bids have already been closed and the company chosen to build the hydroelectric plant has already been chosen. The Chinese are therefore not going to be interested.
This leaves us with the Inter American Development Bank. Before this bank commits any sums for any project it would first have to receive a project document.
It would have to study that document, then refer it to its Board. If the Board of the IDB is interested, it would then have to go through a long process to determine the feasibility of the study.
This was done in the case of the Berbice River Bridge which resulted in the IDB expressing an opinion on the feasibility. Eventually, the government opted for local financing of the project. If the IDB has to be involved in financing this hydroelectric plant to Amaila Falls, such financing is not likely to be approved within the next three years.
So why then is there a rush to build the access roads to the site? Obviously, one does not wait until one is ready to build the dams before one begins the roads.
The roads must be built in advance. But is it not too risky to spend three billion dollars on an access road to the falls when there is not yet any clear signal as to where the hundreds of millions of US dollars will come from to construct the dam for the hydroelectric facility?
We are not talking any “chicken feed” money. We are dealing with hundreds of millions of American dollars. Even if we empty the reserves of the NIS, that money cannot be raised locally.
There is no way that Guyana can internally mobilise such funds for a hydroelectric project. No way.
We are not dealing with a few tens of millions as was the case with the Berbice River Bridge. We are dealing with hundreds of millions of American dollars, and that cannot be raised locally for one project.
External financing will therefore have to be found. But from where will we find it? The Chinese are not going to come on board and the IDB will not rush to dole out money to a government, one whose record of financial management has faced major criticisms over the past few years.
There may be some money from Norway and from the many facilities that the World Bank has for clean development initiatives. But all of these will take time, a long time.
By that time we are going to have a new President and this will also slow the process down. So at the earliest if things go right, we may have a hydroelectric plant capable of generating electricity in five years. And this is very optimistic.
Why therefore is there is hurry to award a contract for the building of the access roads? Is it not also possible that we may very well end up with another white elephant and the loss of billions of dollars if this project does not get underway? Burnham built a road into the Upper Mazaruni to construct a hydro facility. But the funding was withheld after he had rejected a demand from the World Bank concerning another project. A road was started to nowhere. Are we repeating history?
Further, should we be building such a major project on the eve of general elections? No government should be allowed to undertake major investments just prior to elections. So why is there such a rush to have a major project one year before elections?
Or is it that this project is about the elections? Is it that this is the pipe dream that the PPP hopes to dangle to dazzle the electorate so that by voting for the PPP they are voting for hydroelectricity?
Burnham once asked the workers of this country whether they wanted a new minimum wage of $14 per day or hydropower. Those in attendance shouted they wanted hydro. They got neither.
TO BE CONTINUED

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