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10 Reasons why the existing Amaila hydro Agreement is bad for Guyana

Jul 24, 2013 Letters

 

 

Dear Editor,
The Government of Guyana is aggressively pursuing the Amaila Falls Hydroelectricity Project. It has kept a lot of the details secret, deliberately failing to provide critical information to the Guyanese.
We do not believe, in the present circumstances and at the present astronomical costs that this Project is good for the country. We set out our reasons below:
1. The Amaila Falls Hydroelectricity Project was negotiated by the Jagdeo Administration in secrecy, outside of the Constitutional Framework and outside of the laws of Guyana and without informing the National Assembly.
2. There was no competitive bidding for this Project.
3. Because of the secrecy, illegality, and the absence of competitive bidding, the cost of the project is prohibitive.Over 20 years Amaila will cost the consumers and the taxpayers of the country US$2,200 million — US$840 million in capital cost and US$1,400 million in Interest and other cost. Under industry norms, a project of this size should cost around US$350 million to US$400 million.
4. Because of these high capital costs GPL will have to raise Electricity Tariffs annually.
5. The PUC will have practically no control of tariff which will be determined by a formula set out in the GPL Licence.
6. In the absence of any regulatory framework and control, GPL will be able to operate without oversight.
7. The inefficient GPL is incapable at the present time to handle 1,000 GWh. GPL currently produces about 750 GWh and sells around 480 GWh because of system losses in excess of 30 per cent. The projected supply to GPL and demand for such a load has not been substantiated by anyone.
8. What was originally touted as a BOOT is now barely a Joint Venture between the Government and Sithe Global. with taxpayers raising 82 per cent of the funds and getting only 40 per cent of the Company while Sithe Global is providing 18 per cent but gets 60 per cent control of the company.
9. Amaila does not guarantee year round supply of electricity. The Hydroelectricity Company can impose six kinds of blackouts. These are blackouts due to Inadequate Water Flows, Scheduled Outages; Total Project Outage; Force Majeure Outage; Emergency Outage and Forced Outage.
10. The project will impose serious exchange rate risks and unbearable debt burdens on the country.
Citizens of Guyana

 

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