Amaila Hydro was structured as a gigantic rip-off – Gaskin

Amaila Hydro was structured as a gigantic rip-off – Gaskin

AUGUST 31, 2013 | BY  |

“Were it not for the insistence of the Inter-American Development Bank (IDB) that Government obtain parliamentary approval for two peripheral pieces of legislation relating to Amaila, no information would have been made available to the parliamentary parties.”

This was the contention of Financial Analyst, Ramon Gaskin, who in his most recent addition to the raging debate over the Amaila Falls Hydro Electric project, said that had the information not come out the project would have gone the route of the Marriott.

He said that like the Marriott, Amaila would have been “burdening consumers and taxpayers with a flawed project costing.”
Gaskin said that this would have been backed by a 20-year guarantee “that if as consumers Guyanese cannot meet the payments to the promoters, then as taxpayers they will be forced to do so through taxes.”    

Financial Analyst, Ramon Gaskin

Financial Analyst, Ramon Gaskin

According to Gaskin, it did not escape the critics’ eyes that the returns on funds provided were set at the exorbitant and usurious rates of 19 per cent for Sithe Global, 9.5 per cent for the IDB and 8.5 per cent for China Bank. All these would have been passed to the taxpayers through Winston Brassington’s Amaila Falls Hydro Electric Project (AFHEP)
“These rates are unprecedented in international transactions and altogether constitute over US$1.2B in interest payment alone, all payable in foreign currency, against which the rate of the Guyana Dollar continues to depreciate.”
The same loan would normally have been made to the Guyana Government at a rate of interest of no more than two per cent.
All these costs would have ultimately found their way into the tariffs, according to Gaskin.
He said, “As far as the critics are concerned, other than the romantic notion of hydro, there is nothing redeeming about this particular project given the way it is conceived, planned, architectured, structured and owned.”
He said that many saw this as a gigantic rip-off in the making. The colonial mechanism of placing an agent in the GPL to take control of its revenues and its receivables is particularly offensive.
Professor Kenrick Hunte, who has also been adding his voice to the raging debate, said that on the matter of the IDB halting its due diligence study for the project, the Guyana Government should utilize some of the Norway Funds to have it completed
Dr Hunte was referring to Minister of Finance Dr. Ashni Singh’s statement that the IDB has ceased the due diligence work on the Amaila Falls project.
“I have a suggestion for the Minister, the Government, the Opposition, and the people of Guyana. Ask the Government of Norway to use some of the money allocated to fund three important studies.”
He said that it should first use some of the money to complete the Amaila due diligence study and this will provide invaluable information that “we do not now have. It would close the current knowledge gap on Amaila.”
Dr Hunte said, too, that Guyana should use some of the Norway funds to complete a study on the full repair cost of bringing the Guyana Power and Light (GPL) up to an efficient and cost effective operational level.
He said that a complete analysis on the financing a new energy supply company to replace GPL should also be done, taking into account the electricity demand requirements for the next decade.
“The reason for this analysis is to ensure that GPL can deliver a clean, reliable and cost effective supply of electricity to consumers…The patchwork approach to GPL has not worked and much time and other resources have been spent without the expected benefits being delivered.”

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Comments

  • ndtewarie  On September 2, 2013 at 1:36 pm

    ARE WE LOSING IT?

    Its with a heavy heart I write these lines
    And they really come from times that binds
    But when I look back at our progress
    Bros & Sis I regretfully will digress
    For such a small country
    For its renowned hospitality
    On a coastland of rich alluvial soil
    Where all non-native Guyanese toil
    With lofty durable timbers of all kinds
    Where pork knockers made historic finds
    Of gold and diamonds in the hinterland
    Our bauxite exported to every other land
    With so much natural resources
    But ending up with subterfuges
    Yes! we are floundering like crabs in barrels
    In ever present racial name calling quarrels
    With the politicking and rampant corruption
    The poor Guyanese fate never get attention
    You would think we’ve learned from history
    We’re still bombarded with political bigotry
    And today we‘re steeped in all the evils
    Nepotism and chicanery from all angles
    And we’re heading in a downward slope
    Where every Guyanese has lost all hope
    Can’t someone put an end to all this?
    For we are heading for a real abyss!

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