TOO BIG FOR THE PNCR

Mar 22, 2015 Features / Columnists, Peeping Tom

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The Upper Mazaruni Hydroelectric Project was always too big for the PNC. The development of the Potaro Basin may also be too big a burden for the PNCR.
But misguidedly, APNU, of which the PNCR is the major party, is proposing to take Guyana down a similar road to the one that the PNC took Guyana in the mid-1970s when it pursued the ill-advised Upper Mazaruni Hydroelectric Project course.
The Upper Mazaruni Hydroelectric Project effectively died in 1978 when Burnham, no longer able to feed the nation, and unable to convince anyone to come on board his grand pipe dream, decided that national development priorities had to switch to agricultural infrastructure.
APNU is now proposing hydroelectricity through projects in the Potaro Basin. A rose by any other name is still a rose, and what we are witnessing is the resuscitation by APNU of Burnham’s desire for a massive hydroelectric project, the very idea that caused billions of dollars to be overrun by the forest when the plans for the Upper Mazaruni Hydroelectric Project were aborted.
Interestingly, APNU is now embracing a hydroelectric facility at Amaila Falls. This, of course, is different from saying that it supports the PPP’s pet project. APNU has expressed concerns over a number of aspects of that project, including the overall cost and the cost to the consumer of the energy produced. It says, however, that it is open to a reformed project for the development of a hydroelectric facility at Amaila as part of the development of hydroelectric projects in the Potaro Basin.
Had Burnham been this open in the mid-1970s, he would not have pursued the Upper Mazaruni Hydroelectric Project. That project was always going to be too big for the PNC and too big for Guyana.  Burnham seemed oblivious to the fact that a small nation like Guyana, with an underdeveloped economy, could not carry such a massive investment at the time.
Burnham had been advised instead to pursue smaller hydroelectric projects including at Amaila, Kaieteur and Tumatumari. But instead, he went for his grand scheme without having any idea as to where the financing was going to come from and more importantly, where Guyana was going to export the power produced so as to meet the demand assumptions necessary for producing low cost energy.
The public were told that the energy produced would satisfy local demand, with the excess being used to power an alumina smelter. This was one of the principal demand assumptions – a smelter. What the public was not aware of was that another demand assumption was that excess power had to be exported.
The PNC had no strong indications of anyone willing to invest in a smelter. It had no concrete plans on stream in this regard. Nor did it know exactly where the export market for exporting energy would have come from. It was hoping to export the power to Venezuela, but that was all it was doing, hoping.
But if that were not bad enough, the PNC had little commitments as to where the money would come from to build the facility. The Guyanese people have long believed that the Upper Mazaruni Hydroelectric Project collapsed because the World Bank blocked financing for support for an aspect of this project following objections from the Venezuelans. Well, the assistance sought from the World Bank was always going to be negligible when compared to the overall cost of this project. And while the PNC asked the Americans to “smile” on the project so that the World Bank would come on board, this coming on board was merely to be used as a vote of confidence so that other investors, both multilateral and commercial, would take an interest.
Declassified documents recently released by the Americans reveal that at one stage, Guyana approached an envoy to the British Prime Minister, in the hope of obtaining commercial financing from European and Arab sources for the project.
But if money was a major bottleneck, a far greater hurdle was what was going to be done with power produced. Even with a smelter, for which there were no takers, there would have been the need to sell excess power outside of Guyana, if the objective of low cost energy was to be realized. The thinking was that perhaps, of all people, the Venezuelans would be interested. Yes, the very nation which had staked claims to two-thirds of Guyana just after independence.
The Upper Mazaruni Hydroelectric Project was a flawed scheme. It was a pipe dream. The lessons of what happened there should not be repeated. But it seems as if APNU has not learnt that lesson. It is once again proposing ambitious plans to develop hydroelectricity in Guyana, this time in the Potaro Basin.
When the PPP launched Amaila, critics pointed out that the power to be produced would not meet local demand. The development of Potaro would, based on the combined capacity of the various potential projects in the Basin, produce energy in excess of local demand. So once again, the questions arise: Where will the excess energy be sold? Where will the money come from for these projects?
But more importantly, the full development of the hydroelectric capacity of the Potaro Basin would probably at best take about twenty-five years to be realized. By that time, many of us would be either using walking canes or have long gone from this world.

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