Transparency Institute wants independent experts to review Amaila project

Aug 07, 2013 News

A local watchdog group with international links yesterday urged Government to reconsider the financing arrangements for the Amaila Falls hydro project, saying that a different approach may save millions.
The project, which has been hotly debated in the media and between stakeholders and the Government, over its cost and structure, was one of the items on the agenda of Transparency Institute of Guyana Inc. (TIGI), during its monthly meeting last Friday.
TIGI said it is “unequivocally” entirely in favour of clean and environmentally friendly energy to replace in the long-term energy generated from fossil fuels. But the body, which has over time commented on projects of the Government and the processes of procurement, has warned of cautiousness.
“However, in our quest to achieve this worthwhile objective, we have to be extremely cautious, and financially and otherwise prudent to ensure that the project is economically, technically and otherwise feasible, and that all the associated risks are properly addressed.”
Recently, two legislative changes that Government said were critical to the financing of the project were rejected by the Opposition in the National Assembly. The Opposition has said that it wants more information on the costs. The Government has expressed alarm that the project may now be dead and would in the long term affect investors’ confidence. The situation in the National Assembly has been described as a stalemate.
According to TIGI, the stalemate in the legislature and the reactions of the various stakeholders with regard to the Amaila Falls project, were raised during the meeting last week. “TIGI feels obliged to make its own contribution to the debate in the hope that policy makers will reflect on the contributions of everyone before deciding finally on the future of the project.
TIGI wishes to state unequivocally that it is entirely in favour of clean and environmentally friendly energy to replace in the long-term energy generated from fossil fuels. This is what the Amaila Falls Project aims to achieve.”
The body said that a major factor is the apparent high cost of the project, which several knowledgeable persons attribute mainly to the mix of financing.
“TIGI is of the view that the Government should reconsider the financing arrangements for the project since debt financing, as opposed to equity, adds to a significant increase in the cost of the project. The ultimate objective is to ensure the best value for money.”
The grouping, whose members include accountants and lawyers, said it has noted the concern raised by Carl Greenidge, Chairman of the Public Accounts Committee, that there is no conclusive evidence that the electricity tariffs will be reduced when the project comes on stream.
There were also concerns expressed over the formula used that will determine what price the power will be sold by the hydro power company to the Guyana Power and Light Inc. (GPL). A
Power Purchase Agreement (PPA) is being crafted that will spell out the details.
TIGI pointed out that Professor Clive Thomas, an economist of national and regional standing, echoed similar concerns and asserted that the Amaila project in its present form is totally unacceptable.
“Other notable contributors to the debate are Christopher Ram, Ramon Gaskin, Janette Bulkan and Anand Goolsarran, all of whom are knowledgeable and respectable civil society personalities. TIGI urges all the parties involved to reflect carefully on the concerns raised by the various stakeholders, not to be swayed by political considerations or other sentiments, and let reason prevail. It is better to err on the side of caution than to rush into making decisions that we may very well end up regretting.”
The watchdog group urged the National Assembly to appoint a special committee comprising independent experts to address the concerns raised by these stakeholders and to report back to the National Assembly.
“In this way, legislators will be in a position to be better informed before deciding to approve of the project as it is, or to request that it be reformulated to satisfactorily address all the concerns expressed. The ultimate objective should be the highest standards of transparency and accountability, cost efficiency and cost effectiveness, and ensuring the best value for money is achieved.”

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Transparency Institute wants independent experts to review Amaila project

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