Gov’t involved Opposition on every aspect of AFHP

Georgetown, GINA, August 13, 2013

The dream of cheaper electricity seems to be slipping away and with it, the US$80M that Guyana earned by selling carbon credits to Norway through the Guyana Redd+ Fund (GRIF). This money was earmarked to be invested into this US $840M project as the country’s equity.

This money along with the additional US $15M which has already been expended on preparatory work is in essence wasted, as a result of the rejection of the Opposition, particularly the APNU, to support this project.

This project would have seen the cost of electricity for both domestic and commercial consumers fall by 40 percent in the first instance of hydro power-generation. It will then fall by 71 percent and in 20 years, by 91 percent of today’s cost.



The political Opposition has, and continues to hold out that the Government has been withholding information regarding this project and that insufficient consultations were held with key stakeholders.

In March 2012, President Donald Ramotar invited the two opposition parties in Parliament, the APNU and the AFC to his Office where a presentation was made on the Amaila Falls Hydro Project (AFHP) and its status to date. It was agreed then that the two parties would take two weeks to go through the documents provided and then to have follow-up discussions on their concerns.

Subsequently, representatives from Sithe Global also met the leaders of the opposition parties and made presentations to them on the project as well. The company and the Government also briefed the private sector on the developments.

In June the President again invited the members of the AFC and APNU to update them on the project. The AFC declined the invitation, so the presentation was made to the APNU delegation.

The Opposition was also made privy to other agreements that were commercially confidential so as to give them a better understanding of the critical stages of the project.  They were also advised on the two parliamentary interventions that would have to be submitted and supported in order to conclude the financing of this project.

Copies of the debt ceiling Motion and the Hydro Electric (Amendment) Bill were also given to the both Opposition parties.

The Government also facilitated a meeting with officials from the Inter-American Development Bank (IDB) for the benefit of the Opposition, to bring them up-to date with the developments on the project and outline to them, the critical junctions and timelines to be met in terms of keeping the project alive.

Despite these efforts, on July 18 the AFC and APNU joined forces to vote against both the Bill, as well as the Motion.

Unwilling to see this major national undertaking squashed, the Government held a National Stakeholders Forum on July 25 with over 300 representatives from the labour movement, the business community, religious and faith based organisations, women, youth and Amerindians.  The Forum concluded with a declaration calling on the opposition parties to support the project

Additionally, at the behest of the Government, Sithe Global and the renowned Blackstone Company came to Guyana and convened a public forum to answer questions, address concerns and explain the intricacies of the project from their technical point of view.

It should be noted that Sithe Global and Blackstone met privately with the opposition parties on July 31 in the Parliament Chambers.

The Government has dismissed the Opposition’s claims that there was not full disclosure of information on the project; stating that APNU and AFC are in possession of the same amount of information as the Government itself.

Additionally, a site visit was arranged through the Ministry of Public Works for members of the Opposition and the media to see the ongoing works on the road.

It should be noted that despite all the talk of lack of full disclosure with regards to the project, the Opposition to date, has never submitted any written questions to the Government or sought to clarify any issue.


Public Debt

There was a big hue and cry about the public debt that will be incurred if this project is proceeded with. In fact, the initial increase proposed by the Government for the debt ceiling Motion (from $1B to $150B) was amended to $130, yet at the August 7 sitting of the House; the AFC further slashed it to $50B.

Former Auditor General, Anand Goolsaran said that his examination of similar projects in six other countries including Brazil, revealed that Guyana would end up with millions of US dollars in debt, as the project is too overpriced.

However, the fact remains that the total public debt for the Amaila project is zero. This point has been lost on critics and certain sections of the media who have been speaking about this issue.

After twenty years, Amaila Falls will be 100 percent owned by Guyana, and is expected to last for a hundred years. The additional benefits of the AFHP are tremendous. This investment can see Guyana reaching growth rates of more than 10 percent per annum.

Moreover, according to an IMF report, the project is expected to save GPL consumers approximately US $3.5B over a period of 20 years through the reduction of tariffs. It will reduce the country’s fuel import bill by an estimated 20-25 percent resulting in savings of over US$90M on fuel imports.

Additionally, the project will add six percentage points to real GDP growth during the construction phase alone.


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