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I have my concerns about those Amaila Falls project benefits
Jul 25, 2013 Letters
Dear Editor,
I have recently read a lot about the Amalia Falls Hydroelectric Project, with the Government making great claims about how beneficial it will be to Guyana. I have my concerns about those benefits and would like to raise them now, as follows:
1. The Government claims that the project will result in reduced costs for electricity, but nowhere do they say what the estimated actual cost to the consumer will be. Minister Ali is reported as saying that it will result in a 20% drop in charges. Is this confirmed? Does the power purchase agreement identify a specific price at which power will be sold to GPL and how do we then add GPL’s transmission and distribution costs? Anyway, at this stage, I would have thought that the Government could provide a real number as to the projected cost of power to the consumer. What is it?
2. The Government claims that the facility will be owned and operated by SITHE for 20 years. Why then do the people of Guyana have to pay for it now? Why doesn’t SITHE build it and have the citizens pay for it with electricity charges over time?
3. The Government also claims that the life of the facility is 75 years and I ask myself, can this Government and the people of Guyana be so gullible? This plant includes significant electromechanical equipment which is normally scheduled to last 15 years. How can the Government talk about a lifespan of 75 years and believe this? In the US, even the dam will have to undergo major inspection, rehabilitation and re-certification after 20 years. Sometimes at significant cost. Therefore, while the facility may continue to exist after 20 years, it will not be efficiently functional unless major rehabilitation and repair works are carried out at high cost.
4. The Government talks about the savings in foreign payments for fuel. But these should be compared with the foreign payments to service the loan. How much of an offset is there? Aren’t the loan payments nearly same as the cost of fuel or what is the difference?
5. Has Guyana attempted borrowing the money by issuing bonds? Interest rates on bonds are quite low right now.
This is to raise issues which have concerned me for some time in the hope that the Government may provide some answers.
James Smith
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