Chinese-owned Amaila Falls hydro project…Guyana given six most dangerous risks in deal

Feb 28, 2022 News

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…nation should be enraged – Glenn Lall

“When you hear these people use expressions like ‘these sorts of things’ watch out, is a scheme in the making! Political risk insurance – you know what that means – if for whatever reason you have political disturbance and that project gets messed up or nationalised, the Chinese is covered by insurance. You hear how he telling Guyana that the Chinese company will obtain political risk insurance to safeguard them but you can’t hear him saying that Guyana should and must be protected with full cover insurance from the oil companies.”

By Rehanna Ramsay

Kaieteur News – While the Government seems bent on creating a picturesque image for Guyanese of what the re-imagined Amaila Falls Hydroelectric Project (AFHP) will do for Guyana, the reality is far from the dream that is being sold to citizens.
This is according to Kaieteur News publisher, Glenn Lall. Lall, via this newspaper and The Glenn Lall Show radio programme, has been heavily critical of the government when it comes to their imprudent spending of taxpayers’ dollars. In his most recent exposé, Lall during his radio programme, aired last week, spoke at length on the upcoming hydroelectric project.

The plan to restart the “controversial” 165 megawatt (MW) AFHP comes more than a decade after millions of US dollars was spent to construct the first hydropower project at Amaila Falls, which never materialised. Under the new deal, the Chinese operator – China Railway First Group – is expected to Build, Own, Operate and Transfer (BOOT) ownership of the plant to Guyana after 20 years.
Under this model, the People’s Progressive Party/Civic (PPP/C) administration is claiming that Guyana will bear no risks, but the KN publisher pointed to what he believes is a deliberate omission by the Head of the project, Winston Brassington, during the recently concluded Energy Conference.
During the conference, Brassington gave attendees a glowing presentation on how much the US$700M project, to be built by the Chinese, will do for the country.
He told those gathered of how the project will significantly reduce the cost for electricity and how the Chinese will build it for less than the original cost which was calculated some 10 years ago.
The government’s spokesman and project head also claimed that Guyana will bear no risks in the operation of the project. But, according to Lall, a perusal of Brassington’s entire presentation proves that this cannot be farther from the truth.
The newspaper owner and prudent businessman noted that Brassington hid the details of the proposed projects from the public. According to Lall, a closer look at the information on a power-point presentation for the project done by Brassington revealed massive risks for Guyana.
“For you who didn’t know, the contract to start building this Amaila Falls Hydro Project with the Chinese company already signed since November last year. The details were not told to Guyana. We only learn a little of it last week from the man, President Ali and Jagdeo put in front – Winston Brassington. But when he spoke at the conference, he didn’t tell us the full story with the whole truth,” Lall told his audience.
He stressed that while Brassington described the project as a transformational project for Guyana that will reduce the cost of electricity significantly, with no risks to the nation, is simply not true. He noted that based on the information provided by the project head, the Chinese developer will build, own and operate the project but Guyana will bear the brunt of the risks.
Using excerpts from Brassington’s presentation, Lall sought to further quality his argument. “Listen to him as he describes the project in his own words. Brassington told the audience that Guyana has no risk, from one side of his tongue, but from the other side… the project lists 10 risks,” Lall said.
According to the publisher, during his presentation, Brassington only mentioned four risks, which the Chinese are expected to bear. But according to Lall, what “the Chinese took on are not really risks that would hurt their pockets but the other six, that would really hurt our pockets, Brassington throw on Guyana.”
“Yes, this same man that say this project ain’t gon cost Guyana any money, with no risk, now stands with the six most dangerous risks and he didn’t mention all of them to the audience but they were on the slide he was showing during his presentation,” an irate Lall underscored.
Among the statements the project head made was that the government “will not guarantee the project; they’re going to guarantee the performance of Guyana Power and Light (GPL).”
Moreover Lall queried, “What does that mean Winston Brassington? What do those words mean? Government not guaranteeing the project but guaranteeing the performance of GPL. I don’t get it. This man is saying that government is going to guarantee GPL’s payments to the Chinese people and Guyana has no risks? Government not guaranteeing the project, but guaranteeing the payments?”

He then went on to note that, according to Brassington, “‘the Chinese will obtain political risk insurance and these sorts of things.’”
But according to Lall, “When you hear these people use expressions like ‘these sorts of things’ watch out, is a scheme in the making! Political risk insurance – you know what that means – if for whatever reason you have political disturbance and that project gets messed up, the Chinese is covered by insurance. You hear how he telling Guyana that the Chinese company will obtain political risk insurance to safeguard them but you can’t hear him saying that Guyana should and must be protected with full cover insurance from the oil companies?”
Emphasizing that the Chinese company will not bear any significant risk, the businessman pointed out that “although he didn’t come out clear and say who will be taking that geotechnical risk, the slide says it. The Geotechnical risk simply means the foundation you going and put the project on, and guess what? We had already paid in 2012 to test the foundation.” Lall informed his audience that the government is in fact using the same contract that was developed in 2012 and which was already vetted by international experts.
“…So we know that the foundation solid to handle that project, so there is no risk there, but Brassington slide say the operators will take that risk, when there is no risk there!” Lall maintained.

The publisher also turned his attention to the hydrology risk, which was placed on Guyana. He explained that this one is a major risk, which Brassington said GPL is assuming responsibility for.
“Hydrology simply mean water –the water flow; the water supply. If there is enough water or not to power the plant, that is GPL’s headache, GPL’s responsibility, GPL’s risk. GPL got to find water and fetch that water to give to the plant to generate electricity to send to Georgetown and if GPL can’t do that, they have to pay the Chinese man he straight money signed by the contract – how you like that?” a passionate Lall shared.
The businessman went on to note that while the contract provides for allocation of force majeure risk, Brassington glossed over that point to speak about megawatts, without telling Guyana who is responsible for the force majeure risk. The force majeure risk is unforeseeable circumstances that would prevent the company from fulfilling its contract.
“You know why it didn’t come out his mouth? Is because Guyana is responsible for that risk too,” Lall stated. Convinced that the nation should be enraged, the publisher noted that under this agreement, “every single cent of the so called Chinese developer is guaranteed. Win, lose or draw, you have to pay them for the next 20 years.”
He added too that “all payments to the Chinese must be done in American dollars…They don’t want to hear nothing bout Guyana dollars, the investor tie this deal and this business to one currency only, American dollars,” he said.

 

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