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Amaila project ill-conceived from the beginning – Greenidge
– Argentine consultants did feasibility study
The Guyana Government has for the first time made public the name of the company it says it contracted to conduct an “Economic and Financial Evaluation Study” for the Amaila Falls Project.”
The National Industrial and Commercial Investments Limited (NICIL) yesterday said that Argentina-based, Mercados Energéticos Consultores, had been hired in 2009 to assess the project and that its report had been passed on to the political opposition on a confidential basis.
APNU’s Carl Greenidge addressing the gathering yesterday.
According to a NICIL statement yesterday, the consultancy company found that the Amaila Falls Hydro Electric Project would provide a rate of return of 33 per cent as well as reducing the average supply cost of the Guyana Power and Light Inc. (GPL).
The release of the name of the company that did the feasibility study for the Amaila Falls Project coincided with a symposium held by the Working People’s Alliance (WPA) with input from A Partnership for National Unity (APNU).
At that Forum, former Finance Minister, Carl Greenidge with the support of Professor Clive Thomas opined that the project had been ill-conceived from the beginning.
“Amaila has to be part of a bigger system,” Greenidge stated.
According to the former Finance Minister, the project should never have been a stand-alone project and instead should have been one in a cluster of hydro projects that would utilize the extremely costly transmission line that would feed the electricity from the interior to the national grid.
Professor Thomas reminded of the fact that by 2019 the demand for electricity would outstrip the supply from Amaila. This, he said, would inherently drive up the cost charged to the consumer on top of the excessively high cost to build the project.
The 165MW Amaila Falls Hydro Electric project – as currently proposed – stands at US$858M or US$5.1M per megawatt.
According to Greenidge, “we have a responsibility to ensure that the capital cost of the project is as lowest as possible.”
NICIL yesterday said that in the feasibility study conducted by the Argentine Company was conducted by “an expert team of energy sector specialists.” These specialists, according to NICIL, sought to evaluate the economic profitability of the Amaila project for GPL and ensure the supply of power would be consistent with GPL’s medium and long-term demand projections.
It said that while the report’s conclusions date back to 2008 and 2009, the fundamentals of the economic profitability are more pronounced today in a high-fuel cost environment.
The Mercados Energéticos Consultores report evaluated the Amaila project against oil prices of US$75 a barrel while, fuel prices today are significantly higher.
A section of the audience at the symposium.
NICIL says too that, the report’s findings that the Amaila project would bring structural benefits to GPL, is the optimal low-cost generation solution and is economically profitable for Guyana were key factors in assessing the merits of moving forward with the development of the Amaila transaction.
The NICIL statement lamented that despite numerous consultations with the joint Opposition, access and availability of confidential information for many months and incontrovertible facts showing the economic benefits of the Amaila project, APNU still denied the advantages of cheaper and reliable hydropower to the people of Guyana.
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