Opposition demands answers on 2-year Amaila Falls study

…Govt’s flip-flop shows lack of knowledge – Jagdeo

The parliamentary Opposition has taken note of the statements made by Natural Resources Minister Raphael Trotman, in relation to a two-year hydrology risk study being conducted on the Amaila Falls, but says there are still many unanswered questions.

While taking into account that studies were initially conducted on Amaila falls to test the feasibility of making it a hydro power station, Opposition Leader Bharrat Jagdeo told a media conference that there is limited information on the new study.
He was referring to a hydrology risk study being conducted for which the Government will be presented with a report by the end of this year, as revealed by Natural Resources Minister Raphael Trotman during a meeting with the Parliamentary Committee on Natural Resources.
“I would like to know, who is doing this study. Who contracted the people to do the study and at what cost. Because it’s the first time we’re hearing about this, after we’ve had last year an article where they had a headline Amaila hydro canned, Minister Harmon said.”
Jagdeo said these are important details that the Government should seek to share with the Opposition especially since it is the first time his party has heard about this new study. The Opposition Leader noted that details of this study come just months after State Minister Joseph Harmon was quoted in the press as saying that the hydro project has been cancelled.
Harmon was quoted in sections of the media in October 2017 confirming the Government’s interest in natural gas, which will be brought up alongside oil by ExxonMobil. He had noted that because of the difficulty in soliciting an investor, a decision was taken to look at other energy alternatives.
“This, Harmon explained, that they couldn’t find an investor. And who will give them the money. That model was a Private Sector led project,” Jagdeo explained.
“The only liabilities of the Government would have been to buy the power at a particular rate, which would have been half of the price we were generating power at that time, close to 10 cents per kilowatt. No debt and it was a Private Sector led project that would supply power.”

Political gridlock
According to the US State Department’s latest economic bureau, “political gridlock and infighting” is to blame for hampering Guyana’s development efforts in several instances. Relative to this, the report cites the example of the Amaila Falls Hydropower Project (AFHP), which the coalition Government has officially abandoned.
“(AFHP), which would have been the largest capital project in the country’s history, fell apart after a decade of planning when the US developer and equity partner withdrew from the multinational development team in August 2013,” the report stated.
“The company expressed concerns over political risk following objections to the venture by the then-Opposition party APNU,” the report continues. “The Norwegian Government subsequently conducted a new feasibility study on the AFHP and submitted the report to the Government.”
This is a reference to a report from Norwegian international consultant Norconsult. The new report had in fact concluded that the Amaila Falls hydro power project was the only realistic way for Guyana to achieve an emission free electricity sector. Norconsult had noted the merits of the project, such as its completed feasibility study and a higher plant load than the other alternatives.
However, the report had recommended the BOOT (Build, Own, Operate and Transfer) public private partnership model is used. The consultant had urged that an international investor specialising in hydro power be invited to take a majority stake in the project. It is unclear whether this advice has been acted upon by the Government.
The report states: “The only realistic path for Guyana towards an emission free electricity sector is by developing its hydropower potential. The fastest way forward is to maintain AFHP as the first major step for substituting its current oil-fired generation. AFHP was prioritised as the first hydropower plant because it was the only project with a full feasibility study completed; it has a higher plant load factor than the alternatives, a smaller reservoir and a unit cost in the same range as the most attractive alternatives.”