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Amaila Falls Hydro

Jan 29, 2012 Editorial

The road to the Amaila Falls Hydro-Electric Project (pun intended) has been a long and harrowing one. And it still has not been completed – neither the road nor the project. We do not even have the financing for the project in place.
In our Thursday edition, we published the timeline of the project that began in 1998, with the signing of a Memorandum of Understanding between the government of Guyana and Synergy/Hazra.
Like an old Cecil B. DeMills biblical production, before we are through, electricity from Amaila would have been “decades in the making.”
We would like to make one point most pellucid, before we proceed with our review. We have always agreed with the principle that electricity for our national grid that is generated from our naturally occurring hydro potential is a positive initiative for our national development. How could we not? Fossil fuels are a fast depleting world resource. Its price will only keep spiralling upwards as it inevitably becomes scarcer, while world demand increases with the rise of the BRICS emerging economies and others.
Even if we do strike oil in the coming years, this will present us the opportunity to benefit from high world prices as we export our production while satisfying our needs from Hydro Electric power. This use of “green power” may actually become a source not just of goodwill but probably of funding, as our “bio-gen” fuel at Skeldon is at this moment.
While our remote hinterland with its towering forested highlands has proven to be a barrier to development up to now, the rivers that originate there on account of its high rainfall will now become centres of development, after we absorb the technical learning curve with our first mega-hydro project. We understand and accept all of this and have so declared in this space. Where we have parted company with some of the local boosters of the Amaila Falls project is in the lack of transparency in the entire process.
This perspective is not a case of paranoia or witch hunting as some may believe. It is simply a case that we Guyanese must demand value for our money, if for nothing else save we are a very poor nation and the project will place severe burdens on our pocketbooks.
Ever since the project was conceptualised, its costs have skyrocketed and from all we are hearing, this process will continue. We are learning about risks involving the value of the Chinese currency vs the US dollar. As matters now stand, the project is estimated to cost US$840 million. We predict that before the dust settles we will be footing a billion-dollar hydro project.
With an economy of our size we have to ask questions: the risk of such a large investment not coming on stream in a timely fashion will be catastrophic for us. It will make the troubled Skeldon Modernisation problems seem like child’s play. Additionally, in the world of globalised and instantaneous communications we have learnt of the costs of so many other projects – even in the developed countries – being inflated that we would be foolish to remain complacent.
We take no pleasure in pointing to the inability of Synergy to deliver the road to Amaila Falls. We only mention it to highlight the need for greater scrutiny to the construction phase where so much more money is involved.
Against this background we welcome the acceptance of the government to release – in conjunction with Sithe Global that has also agreed – to place the contract for public scrutiny.
We fail to see how this exercise of transparency can affect the project negatively. If there is no “hanky panky” with inflated prices or payoffs in the contract, then there is nothing to fear from any quarter. The government and Sithe will be receiving free publicity and the education of the populace about the hydro project that is crucial for its ultimate success and replication.
We look forward to receiving the contract so that we may fulfil our mission to keep the Guyanese people informed.

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