Government scrambles to meet with Guyana’s major coalition bloc to save the Amaila Falls Hydro Project
The project, at US$858 million would have been the most expensive project of any kind to be undertaken in the country’s history. The Government trumped up the project as necessary to bring down unsustainable electricity costs, give it a break from those multi-billion dollar subsidies to GPL, and give investors a sure supply of clean energy to do business.
Mounting prices and lack of full disclosure caused A Partnership for National Unity (APNU) to withhold its support for two pieces of legislative instruments which the Government said was necessary to secure IDB funding.
The legislation dealt with declaring the forests around the Falls a protected area and raising the Government guarantee on loans to public corporations from $1 billion to $150 billion. However, an amendment moved by the seven-seat party the Alliance for Change (AFC) only raised the debt ceiling to public corporations to $50 billion.
The minority Government earned the last minute support of the AFC and that those votes added up to pass secure the legislative requirements.
But that was not enough for Sithe Global.
The company said unanimous support by all three political parties was a necessary prerequisite to the project receiving international development funds required to complete it.
As a result, Sithe Global said the project cannot move forward, despite 16 years of work. The company had spent US$16 million developing the project, and the Government could end up spending more than that to build the road to Amaila Falls.
However, President Ramotar wants to see if he can win over APNU and get the project back on track, while not saying explicitly that he would try to woo Sithe Global to continue with the project.
He said that at this late hour, there is a small window of time for the country’s leaders to rise to the occasion, and to make a final decision on Amaila that is based on patriotism, not partisanship.
APNU and leading economists in the country have expressed concerned about the cost of the project.
Former Auditor General Anand Goolsarran examined similar projects in six other countries, including Brazil, and said what Guyana was willing to rack up millions of US dollars in debt for, was for a project that was way overpriced – in fact more than double the average price elsewhere.