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Controversial Amaila Falls hydro…Govt. stands behind Chinese contractor – says IDB has safeguards

Feb 27, 2015 News

– says IDB has safeguards
Government has dismissed concerns by a leading non-governmental watchdog body over the Chinese contractor involved in the US billion-dollar Amaila Falls hydro-electric project, saying that enough safeguards are in place to protect Guyana from corruption.
The Guyana Human Rights Association (GHRA) on Wednesday warned that a key ethics committee in Norway has blacklisted the parent company of China Railway First Group (CRFG) over corruption. The association called for Government to hold off on the 165-megawatt project until public consultations and investigations are carried out on the contractor.
According to Government in a statement, GHRA drew “incorrect” and “misleading implications”
of a recommendation made for Norway’s Government Pension Fund Global (GPFG), the largest investment fund of its kind in the world.  The fund has monies invested in China Railway Group Ltd (CRG), the parent company of CRFG.
CRFG is the company awarded the US$506M contract to build the hydro project.
Norway would be concerned how monies are being spent, as that country has a US$250M agreement with Guyana for this country to maintain its forests in a sustainable manner. Some US$80M will be used from the Norway money as part of Guyana’s equity for the project.
Government accused the GHRA of being an “opposition-aligned” organization and said the allegation is largely based on a corruption case in China that involves state-owned China Railway Engineering Corporation (CREC).
“CREC is a parent company of China Railway Group that is in turn a parent company of China Railway First Group, which is the actual partner on the Amaila Falls Project. The main parent company, CREC, is one of the world’s largest firms and has hundreds of subsidiary firms under its umbrella. Therefore, it’s very misleading and nonsensical to draw such a comparison with the partner company of the Amaila Falls Project.”
Government insisted that the organisation failed to point out that the Amaila Falls project, by virtue of being developed under the governance of the Inter-American Development Bank (IDB), adheres to the IDB’s strict and internationally recognised standards.
“As a member of the IDB, the Government of Norway endorses IDB’s policies including its financial and fiduciary safeguards. The integrity concerns raised by the NGO are based on allegations made for projects taking place in China. The safeguard policies for these projects are very different from the strict IDB safeguard policies followed in the Amaila Falls Project.”
Government said that it follows “high standards” and will continue to defend against baseless attacks that try to derail Guyana’s development.
“The Amaila Falls Hydropower Project has best in class international partners and is being developed according to the highest standards, and it will deliver transformative social and economic benefits for the people and economy of Guyana. The Government of Guyana remains fully committed to realising these benefits for all Guyanese.”
In a report released last year, Norway’s GPFG Council on Ethics (CE) recommended “the exclusion of China Railway Group Ltd. (CRG) from the investment universe of the GPFG due to the unacceptable risk of the company being responsible for gross corruption.”
The hydro project has been seen as a crucial one for Guyana, with Government arguing it will bring down costs of power and improve reliability. However, the project stalled in 2013 after the Opposition-controlled National Assembly refused to pass key environment legislation required for IDB to approve the part of the required financing.

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