Sithe Global sells shares in Canadian power station

May 15, 2011 News

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…says that no plans to sell shares in Amaila project

NEW YORK—(BUSINESS WIRE)— Sithe Global Power, LLC (“Sithe Global”), a company owned by investors of The Blackstone Group, announced that its wholly-owned affiliate, Goreway Luxembourg Holdings sold its remaining 50 per cent ownership interest in its Goreway Station, an 875MW combined cycle power generating facility in Brampton, Ontario.

The Sithe Global subsidiary was a major shareholder in the “Goreway Station”.
The new majority shareholders is the Japanese company, Chubu Electric Power., and Toyota Tsusho Corporation (“TTC”).
The Goreway Station, which achieved commercial operations in June 2009, was developed, financed and operated by Sithe Global.
Chubu and TTC each purchased 25 per cent of Goreway Station in September 2009.
Sithe Global is also the developer behind the US$700 million Amaila Falls Hydro Project in Guyana.
Asked about the possibility of Sithe Global selling the shares in Amaila Falls Project, Mr McGowan said that the new shareholder would be bound by all the contracts in place.
He said that in no way would the Guyanese consumer be affected.
Asked about the impact of the non-completion of the road leading to the falls, Senior Vice President James McGowan, said that the road to the project site will really be needed “several months” after the contractor of the hydro project is given the go ahead.
This revelation by a senior executive of Sithe Global comes at a time when the government has admitted that Synergy Holdings, under Makeshwar “Fip” Motilall, is woefully behind schedule in building the road.
This week, Sithe Global says it hopes to reach financial closure to build the hydro plant before the end of the year.
James McGowan, Sithe Global’s Senior Vice President, said that the road will be needed “some time after that.”
He said that the first phase of construction of the plant will mostly involve design work and “some light travel to the site.”
Phil Mooney, a consultant with Sithe Global, said that the real heavy work on the plant really starts “several months” after the contractor is given the go ahead to construct the plant.
Sithe Global has identified China Railway First Group to build the hydropower plant. The deal with the Chinese construction company is not yet final.
According to McGowan, the Engineering Procurement Construction contract with China Railway First group is still being negotiated.
According to the advertisement the government issued requesting proposals for building the road, it was stated that the construction must be completed by the end of eight months after the effective day of the agreement.
The government announced the award of the contract to Motilall on March 26, 2010.
Synergy Holdings was given the first notice to proceed on October 5, last year, for some sections of the road, while the green light for the other section through virgin rainforest was given on January 11, this year.
Those bidding for the contracts were asked to provide their experience in similar large scale projects together with references and credentials, and detail the equipment he owns and would require to carry out the project.
Synergy Holdings has come under the radar over its inexperience in building roads and its inability to carry out the project.
The company was awarded the US$15 million project to build the roads and bridges necessary for the start-up of the Amaila Falls Hydro project.
The contract is for the upgrade of approximately 85 kilometers of existing roadway and the design and construction of approximately 110 kilometers of new road.  The works also include building bridges across the Essequibo and Kuribrong Rivers.
In addition, the contract takes into account clearing the way for the installation of a 65-kilometre transmission line. The Amaila Falls hydro-project is now expected to supply 165-megawatts of electricity to the country and this will significantly free up resources used to buy fuel to generate electricity.
The Amaila 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 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 that brings one closer to the site but approximately 30 miles of additional roads will need to be built to the top of Amaila Falls.

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