Responding to Gerry Gouveia

Aug 16, 2013 Letters

Dear Editor,
I just saw an open letter from Gerry Gouveia to Christopher Ram and Ramon Gaskin and while I am sure that these two gentlemen can and will reply, I just felt compelled to also reply to some of the questions raised, especially since the same points seem to have been made by President Ramotar.
Before I do, I must also say that I recently saw a picture of Mr. Gouveia with his hand casually around president Ramotar in Canada, as friends presumably because it could definitely not be an official photograph as one should not approach a president like that, unless they are true friends.
To the questions:
1. PUBLIC DEBT: The president and Mr. Gouveia seem to be saying that Guyana and Guyanese will not be responsible for financing the debt incurred to pay for Amalia. My question to them then, is who is borrowing this money and who will repay it?? I imagine that their reply will be that it will be paid by the company who owns the hydropower facility, Amaila Falls Hydro Inc (AFHI). But this company is partially owned by the Guyana Government. Further, by way of the Power Purchase Agreement, GPL must pay this company enough money to cover loan repayments and operating costs. So eventually, Guyanese have to pay whatever it apparently costs to construct this facility, even if these costs are inflated.
But returning to this point, are Mr. Gouveia and the President saying that Guyana and Guyanese will get this hydropower facility for NOTHING? Do they really believe that all Guyanese are so gullible? MONEY IS LOANED AND HAS TO BE REPAID BY THE PEOPLE OF GUYANA EVEN IF THE GOVERNMENT TRIES TO SAY IT’S NOT THEIR LOAN. The total to be repaid will approach US$2.2 to US$2.4 billion quoted by Ram and Gaskin.
1. TAXPAYER SUBSIDY FOR GPL: Mr. Gouveia is again repeating what was said by the President in that the subsidy to GPL will be removed. GPL is subsidized because it cannot raise enough revenue to cover its costs. MY QUESTION is why or HOW will the subsidies be removed? Will GPL suddenly raise enough money to cover its costs including its payments to Amalia plus its distribution and management costs?
As part of its Power Purchase Agreement, GPL must pay the costs for loan repayment and the operating costs for Amalia annually. My estimate of the loan repayment for US$850 million is US$85 million per year, plus Amalia Operation and Maintenance costs of 1.5% or US$12 million plus profits to Sithe of US$19 million giving a total of US$116 million. Thus, there is no way that the GPL subsidy can be removed as suggested by the President and Mr. Gouveia.
1. CONSUMER TARIFF: APNU has clearly asked for the calculations showing the proposed reduction in tariffs but nothing has been provided. Yet the President and all officials continue to talk about a reduction without supporting this statement. AGAIN, ARE GUYANESE SO GULLIBLE TO BELIEVE WITHOUT PROOF? To do this, one must think of the Government as GOD, where one is forced to believe without seeing the facts.
1. THE PRICE TAG: What everyone has been stating is that this price is very high and apparently has been developed behind closed doors between a few people. What we are asking for is an open transparent bidding process that provides the basis for the price provided. Use of the DESIGN/BUILD approach to get prices from bidders is a common approach these days but the government and its agents must develop a concept design prior to bidding.
James Smith

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Responding to Gerry Gouveia

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