Dangerous and misleading for Brassington to tell nation no risks in Amaila Hyro deal - Ram

Dangerous and misleading for Brassington to tell nation no risks in Amaila Hyro deal – Ram

Mar 01, 2022 News

Kaieteur News – Not only is it “nonsense” but it is also “absurd” to tell a nation that a renewable energy project will not be of any risk to a country.

Attorney-at-Law, Christopher Ram

This is according to prominent transparency advocate, Chartered Accountant and Attorney-at-Law, Christopher Ram in an exclusive interview with Kaieteur News.
Ram’s comments come on the heels of the announcement made by the Amaila Falls Hydropower project head, Winston Brassington, who told the foreign dominated audience at the recently concluded International Energy Conference and Expo, that Guyana will not bear any risks, but instead the contractor, China Railway First Group.
According to the activist, “I think it’s absurd to suggest that a 20-year project that relies on several variables, including climate change and water flows has no risks. It’s nonsense to say that.”
He added, “Until we see the agreement, we do not know and cannot say for sure who will bear the risks if the project cannot deliver as it is intended to. What we do know for sure is that the Chinese are not in the business of bearing risks in any third world country and that the only people who will meet all the costs, risks and the obligations will be the people of Guyana.”
Brassington told the conference while providing an update on the project that, “like any large project there is a lot of risks in these projects but most of these risks have been put to the developer.”
He, however, glided over the burdens Guyana will bear as a result of the project, even though the country is bracing to face six of the most dangerous risks associated with the project.

Project Head, Amaila Falls Hydropower plant, Winston Brassington

These include hydrological, which means if the falls run dry due to climate change, or if the 23 square kilometres reservoir is unable to feed the hydro plant, the Guyana Power and Light (GPL) would bear the incurred liability.Secondly, Guyana will be responsible for political force majeure, that is, if the government changes its mind about the project, it would still have to pay the Chinese contractor for its investment.
The third risk Guyana will stand, along with China Railway, is ‘other force majeure’. This relates to damage to the plant, by unforeseen circumstances.
Two other risks will be borne by GPL if the Amaila Falls project fails to meet the electricity demand.
Given that the project head failed to highlight these risks, Ram told this newspaper, “It is dangerous, misleading and irresponsible for anyone to make the kinds of claims and statements Mr. Brassington is reported to have made to an international audience.”
The Amaila Fall Hydropower project is presently pegged at US$700M. The developer, China Railway First Group was awarded the Build Own Operate Transfer (BOOT) project to hopefully deliver 156 megawatts (MW) of electricity upon its completion.
Under the BOOT arrangement, Brassington said Guyana would, in 20 years’ time, take over ownership of the project.
He did, during his presentation, seek to point out that during the three-and-a-half-year period expected for construction, an independent supervision firm would be hired by the administration to ensure the hydroelectric plant is built to specifications. This is in addition to the recruitment of an Operations and Management consultant. With Guyana taking ownership of the project 20 years after commissioning, Brassington noted that the project’s average price measured over that time period would be about 7.7 cents which is largely going towards the repayment of the US$700M financing.
According to Brassington, the project will be funded by China Rail and Chinese institutions. They will own the project and it will be operated under a concession for 20 years.
At end of the 20 years, he said, it will be handed over to government at no cost and as such, “I think this a great project.”