Brassington dodged the many unanswered questions on controversial Amaila Project

Sep 05, 2013 Letters

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Dear Editor,
It is instructive that of the scores of serious, unanswered questions on the Amaila Falls hydro project Mr. Winston Brassington chose to place, at Government’s expense, a full-page advertisement in defence of the rate of return that Sithe Global would have earned if the Amaila deal had gone through.  In so doing and to deflect from his own record, he chose to attack my integrity and competence. Mr. Brassington is easily the last person in Guyana who should question anyone’s competence or integrity.
Let me remind Mr. Brassington of the meeting in his Conference Room where I asked whether in addition to its 19% return on investment of US$150 million over 20 years, which works out at US$570 million, Sithe would be repaid its original capital. The response from a member of Mr. Brassington’s team was that the return is calculated on the original sum while provision for the repayment of the equity is included in the monthly tariff.
To be fair to Mr. Brassington, he did seem surprised with the answer but never challenged his team member. If he needs to jog his memory further let me remind him that during the discussion on the same issue his team stated that the agreement was so worded that even if Sithe’s capital was reduced to 1%, it would still have a 100% control of the company. If the Government wished otherwise, it had to buy-out Sithe.
Finally, because I wanted to be absolutely clear on this issue, I raised it again in an email to Mr. Brassington to which he never responded. It was on the basis of the categorical statement from his team and his non-response to my email that led me to conclude as I did. But let this be known. The US$150 million investment is a gross amount which Sithe was never going to pay anyway.  Conservatively, I would say that their investment, after allowing for various fees and expenses – some of which were not properly chargeable under the Hydro-electric Power Act but to which Mr. Brassington agreed – would have been less than US$100 million.
Mr. Brassington should now state the rate of return on what would have been Sithe’s actual investment in the company.
Let me put some questions to Mr. Brassington.
1.    Is it true that the law governing the proposed Shareholders’ Agreement between Guyana and Sithe was that of the jurisdiction in which Sithe resides and not Guyana?
2.    Can he state whether the agreement between Sithe and the Government had been finalised on the date that Sithe walked? And if not, why not?
3.    Can he confirm the cost stated by Sithe as incurred or to be incurred on the Project at March 2010?
4.    How much of the US$150 million to be invested by Sithe would have been by way of set-off or credits or exchange of cheques for payments by or to Sithe and chargeable to the project?
5.    Is it correct that Sithe has full voting and absolute management control of the company while the Government’s rights are restricted?
6.    Was Sithe to have control of the books and accounts of the company?
7.    Is it true that Sithe would have been paid US$3 million as a construction supervision fee and $17million for the equity participation fee which is at least questionable if not illegal under the Hydroelectric Power Act?
8.    Had the Operating and Maintenance Contract been completed and can he confirm that this would have been carried out by a Sithe company?
9.    Can he say what surpluses Sithe would have earned from Sithe’s O&M company?
10.    Can he confirm that Sithe had fully met the conditions of the Interim licence?
11.    Would Sithe and any of its contractors have been liable to any taxes on their income in Guyana?
12.    Is it true that the Government of Guyana and the Guyana Power & Light Inc. made commitments valued at US$315.2 Million to prepare GPL for Amaila?
13.    What is the purpose of the Amaila Debt Reserve Account of US$36 Million and who would have controlled that account?
14.    Who contracted attorneys to draw up the Implementation Agreement, the Power Purchase Agreement and the Assignment of Receivables Agreement?
15.    Can Mr. Brassington identify those attorneys who participated in the contract drafting for the Guyana Government?
16.    How much of the US$5 million legal fees was to be paid to attorneys for the Guyana Government?
17.    Is he aware of any equity shareholder whose investment is repaid on a monthly basis?
18.    Can he say whether the equity investors in Berbice River Bridge Company Inc. are repaid their investment monthly/semi-annually or annually?
19.    And if they are not, why is Sithe treated differently?
20.    Did the Government of Guyana signal its agreement/disagreement to expenditure of US$70.2 million contracted by Sithe as stated by Mercados?
21.    Does he agree that the stand-alone nature of the project is preferred to the modular approach given that upon completion Amaila would not satisfy the country’s demand for electricity?
22.    Would he confirm that there is no agreement for a fixed payment for electricity supplied by Amaila at 11 US cents per KWh?
23.    Would Mr. Brassington publish a detailed working to show how a typical monthly charge for power supplied by Amaila to GPL is arrived at and how that works its way to the consumers?
24.    Was Sithe being truthful in its statement that there would have been a 40% reduction to power prices for consumers in years  1 -12 if Amaila had come on stream?
25.    I also posed some questions to Mr. Brassington in a letter in the press yesterday. I am asking him to answer those as well. I am prepared to pay for a paid advertisement just in case he is afraid of the editor.
Now let me deal with my and Mr. Brassington’s competence and integrity. It is probably unwise for a person of Winston Brassington’s vulnerability to attack the competence or integrity of others. Here is a brief CV of Mr. Brassington:
1.    His pivotal role in Illegal tax concessions valued at hundreds of millions of dollars for Queen’s Atlantic Investments Inc. (the Ramroop Group).
2.    Sale/lease at undervalue of state property to the same Ramroop Group and costing indeterminate sums.
3.    Award of Amaila road contract to Fip Motilall costing hundreds of millions and perhaps two years in lost time. Mr. Brassington as a proxy shareholder in the Hand-in-Hand can tell us whether that company will meet any liability under the performance bond for $300 million which was incompetently handled by NICIL.
4.    Twisting the arm of the NIS to invest in the Bridge Company/Clico resulting in the loss to the NIS of several billion dollars.
5.    Unlawful waiver of more than one hundred million dollars annually in dividends payable to the State by the Berbice River Bridge Co. Inc.
6.    NICIL’s role in Pradoville 2 and unlawfully financing expenditure of hundreds of millions of dollars.
7.    NICIL’s failure to comply with the laws of Guyana.
8.    Mr. Brassington’s chairmanship of the Guyana Power and Light Inc. which has failed to meet its obligations under its Licence and which costs the country billions of dollars annually.
9.    His directorship of the GNCB’s debt collection agency that operates outside all the norms of public accounting and the law.
10.    His role in the diversion of sewage in Kingston, the withdrawal of the contract from the approved contractor and handing it to an American company. Cost to the country: unknown.
11.    His lead role in arguably the country’s largest illegally operated fund.
12.     His role in Atlantic Hotel Inc. of which he is the sole director and which gave the Chinese a contract that said Guyanese would not be employed.
As egregious as any one of the above is, the Amaila deal which Brassington was secretly spearheading under the guise of confidentiality, would have had untold financial consequences for Guyana. Even in countries with only modest embrace of good corporate governance and laws, the best Winston Brassington could hope for would be to be classified as unfit to be a director of any company. In better ones, society would be protected from him. But in Guyana, Mr. Jagdeo encouraged and protected him.
Christopher Ram

 

 

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