US$30M Skeldon Co-generation Plant a ‘ticking time bomb’ – operator

… now requires US.5M to restart, USM more to fix

The Skeldon Co-generation Plant is a ‘ticking time bomb’ that currently requires US$2.5 million in immediate expenditure as a stop gap measure in order to restart the 30MW bagasse fuelled component of the facility and an additional US$17 million in order to fix the deficiencies identified a few months after the generators were turned on.
The Co-generation Plant was purchased from the Guyana Sugar Corporation (GuySuCo) for an announced price of US$30 million by Skeldon Energy Inc (SEI) – a special purpose company owned by the Government’s holding company, National Industrial and Commercial Investments Limited (NICIL) and the Guyana Power and Light (GPL).
The damning state of affairs was laid bare on Friday by Skeldon Energy Inc’s Chairman, Lloyd Rose, who had moments earlier wrapped up a guided tour of the facility in Berbice for subject Minister Jaipaul Sharma, and members of the media.

Investigation
Minister Sharma has since indicated that based on the preliminary assessment, he will be recommending to the Cabinet Counsel of Ministers, a full forensic investigation into the facility.
Rose in providing a brief to members of the media, indicated that the facility had to be shut down in December 2016 owing to safety concerns.
It was explained that apart from the badly deteriorated state of the facility – six years into its 25-year life span – the boilers being used at the facility are simply not for use in Guyana’s conditions.
It was explained too that because of the design of the boiler, coupled with the types of bagasse being supplied, the circumstance has posed a difficulty where the ash blocks the air vents and disrupts the balance of air and fuel in order to ensure consistent generation.

During the guided tour of the boilers it was observed that the piping used to circulate the pressurised steam has eroded to a point where it now poses a safety hazard and risks an explosion.
Speaking to the design of the facility, it was pointed out too that the boilers were not even protected from the elements including the salted air – there is no roof in place.
Other visible deficiencies on the boiler were evident at the furnace doors where the insulation was almost completely burnt out as a result of the heat.

ATCOM
Briefing members of the media following the tour, Rose said safety issues and the problems with the boiler are what primarily led to the more than six-month closure.
“The main problem we have to deal with, we have not been able to provide energy for first crop and the reason for that is we had to embark on major repair works,” he said.
According to Rose, the company (SEI) has the US$2.5 million for the emergency works in order to restart the Co-generation Plant and the works should be completed by the end of August.
Rose said SEI has contracted a South African firm, ATCOM (John Thompson’s). According to the SEI Chairman in January, the company will be looking to commence a US$17 million overhaul of the boilers, essentially installing one to replace the malfunctioning two.
Asked about the finance of the US$17 million operation since Government has already indicated a shortfall in revenues, Rose spoke to a number of options.
He was adamant that from projections in SEI’s business plan, the company can be viable if all conditions are met.

Options
Rose said it was not a case where SEI was looking to ask Government for the US$17 million, since the company is exploring other options.
He said SEI can either secure the money through a commercial loan, a buyer’s credit arrangement, a third party equity investor, and divestment or possibly even raised from the GRIF funds.
The SEI Chairman made it clear however that several of the options being explored are contingent Government vesting the assets over to SEI –something still to be done since the company was incorporated in February 2015 and the finalisation of the sale in April of that year.
Minister within the Finance Ministry, Jaipaul Sharma, indicated to media operatives that he was invited to the facility at the behest of the Board of Directors and was motivated further by the increasing negative reports emanating from Skeldon.He reminded that the Chairman of the Interim Management Committee (IMC), Professor Clive Thomas, had already pronounced that the Co-generation Plant is a ticking time bomb.
Minister Sharma suggested that in order to allay fears being peddled that the negative reports were in fact an attempt to discredit the facility; he decided to take the offer to see first-hand the level of damage to the facility.
He lamented the fact that the facility was poorly designed from the get-go.
Another glaring discrepancy raised with the Minister was the fact that the co-gen plant was never actually commissioned which means it was never officially certified.
He questioned too, why the defects were not addressed by the original contractors since the defects would have been identified during the defects liability period.
He labelled the entire affair “corruption to the highest”; something he will not tolerate as a Minster.