The Amaila Falls project can be expected to cost taxpayers a lot more than is being projected

Nov 01, 2010 Letters

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Dear Editor,
Speaking at the Guyana Labour Union’s Triennial Delegates Conference recently, President Bharrat Jagdeo announced the need for an additional power plant costing taxpayers another US$20 million to alleviate the ongoing problem of increasing blackouts and unstable power supply.
This is in addition to the US$27.5 million 20.7 megawatt plant that was commissioned just last December, despite the assurance given then by GPL Chairman Winston Brassington that “blackouts due to generating capacity would end”.
Some may be quick to denounce the Jagdeo Administration for not knowing what they’re doing, while others may be high in praise for a government that’s feeling the pain of its citizens.
While both may be right, I believe this Administration knows exactly why it is necessary for the Guyana Power & Light (GPL) to install another power plant, and all the recent blackouts may well be deliberately engineered to justify the purchase of same.
In a Confidential Feasibility Study Report on the Amaila Falls Hydroelectric Project (AFHEP) prepared for the Government of Guyana by a Canadian company, Kaehne Consulting Limited, June 2002 (http://www.electricity.gov.gy/amaila.pdf), this Administration is aware that, “The Guyana Power & Light (GPL) load, which provides the cornerstone of the project’s likely energy market, cannot be fully supplied by Amaila (AFHEP) due to the project’s distance from the GPL load. Synergy has indicated that GPL will have to continue to operate end-of-line diesel generation for voltage and frequency support and to provide back-up generating capacity in case of outages on the Amaila supply system……This places a higher level of burden on GPL’s operations to ensure that its customers are not adversely affected by the introduction of the Amaila project as a source of generation. Similarly, when GPL is able to take all Amaila’s output in the future, an outage at Amaila or on the transmission link to GPL will cause a major or total outage at GPL. Unless 100% generation reserve is maintained, such an outage will continue until the problem is solved.”
The report continues, “It has been assumed that 25% of GPL’s gross generation will continue to be provided by diesel. From the operational point of view and due to the long distance over which power must be sent from Amaila, GPL will also wish to continue to operate some diesel to avoid total blackouts if the transmission line is damaged”. The Report also warned of “several significant design issues which will need further investigation as the project progresses, but the most important matter is whether Amaila will be able to deliver supply to GPL in a quantity, of a quality and availability and at a price that will be attractive to GPL and which will be of benefit to GPL’s customers, who eventually will be the consumers of power produced at Amaila.”
Mr. Editor, I am convinced that this Administration is fully aware that GPL will not be getting 100% load capacity from AFHEP, and is seeking to replace some of GPL’s older power plants with newer, more reliably ones, to avoid a severe backlash from the Guyanese people when they realise that with all the billions being spent on the Amaila Falls Hydroelectric Project, we will still need to import a significant amount of diesel to continue operating those generators at GPL.
For as the Report clearly stated, AFHEP will not be able to meet the demands of GPL, due to the project’s distance from the GPL’s system at Sophia. In addition, those Amerindian villages in close proximity to the Amaila Falls may not be able to get electricity from the hydroelectric plant there, because, “Given the small loads likely from these communities, supply from the 230 kV transmission line is impractical.”
The Report also warns that, “The length and cost of transmission for the size of the generation and the load makes the project a challenge. The project will come closer to financial sustainability with the passage of time and as loads grow to better support the project.  The length of transmission will remain a significant obstacle unless a substantial load can be developed closer to the site.”
Considering there are no immediate plans to set up a major industry anywhere close to the Amaila Falls, Guyanese consumers can expect a significant increase to their electricity bills when the hydroelectricity plant is completed, unless this is subsidized by the Government.
In fact, the Amaila Falls Hydroelectric Project can be expected to cost taxpayers a lot more than the Jagdeo Administration wants us to believe; if you add the US$27.5 million power plant commissioned last December to the US$20 million proposed for another new power plant that is obviously being installed in preparation for the hydro project, that’s another US$47.5 million that taxpayers will have to fork out.
According to the Report, “The developers have also advised that a permanent airstrip will be built at Amaila. This will be essential once construction begins for ferrying the supervisory and senior labour force to and from site and for carrying out medical emergency evacuations should that be necessary.” There is no announcement yet from the Administration if this will be done, and who will be paying for it.
When one considers the tremendous cost involved in building the Amaila Falls Hydroelectric Project estimated by developer Sithe Global Power LLC to be US$650 million; the US$15.4 million given to Fip Motilall for the construction of the access road; the US$47.5 million for new power plants at GPL in preparation for the hydro project; the continuous cost of importing diesel to fuel the GLP generators; and the anticipated cost overruns which you know will happen, the Guyanese consumers may pay a big price for the Administration’s folly.
Considering the massive size of the project and money involved, and also in the interest of full disclosure and transparency, I strongly urge opposition members of Parliament to demand full accountability of taxpayers’ money being used in this project, to guard against misuse of Guyanese taxpayers’ dollars.
Harry Gill

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