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– Govt. says no “definitive” word at this timeGovernment’s flagship project, the US$840M Amaila Falls hydro, may be on shaky grounds with indications earlier this week that negotiations for finances might not be going too well…or at least not where the administration wants it to be.Cabinet Secretary,Cheap NFL Jerseys Authentic, Dr. Roger Luncheon,Jae Crowder Jersey, questioned about the project on Thursday, admitted that there is not much clarity at this time. “I don’t believe that the work on Amaila is at a stage where we could be definitive.”He, however, assured that things are not that bad. “I think all of the indicators- as we sit here today- all of those indicators are promising,” the official said. Dr Luncheon is also Head of the Presidential Secretariat and a key figure under the previous government, with intimate knowledge of the details.There have been delays on the access roads leading to the Amaila Falls hydro project site.The statement would be a cautious one by the administration after a series of delays over the access roads leading to the Amaila Falls site in Region Eight.The Bharrat Jagdeo-led administration had been hopeful for financial closure since 2011 but this had hinged on the successful completion of the roads.However, continuous delays by the contractor, Synergy Holdings Inc., stalled the process of closing the deal. Synergy was fired in January last year after an exasperated government under the new Presidency of Donald Ramotar decided it had had enough. This was after several protests, and news reports that Synergy did not have the experience for the roads. Several of his equipment were lost in the swamp as poor planning, weather and harsh terrain plotted against the works.Road delayThe roads, some 270 km of them, were considered crucial to move construction and other materials to the planned work site. The roads include existing “trails’ and new ones through forested, swampy areas. Not having these completed was unthinkable.Despite dividing the incomplete roads into smaller lots and awarding contracts, they still remained unfinished today. As a matter of fact,Kurt Warner Cardinals Jersey, government was forced to take back a section from two new contractors who, too,NFL Jerseys From China, fell behind.That final, troubled section of 185 Km has since been awarded to China Railway, the contractor of the hydro project, in a bid to speed up works.Government has already made the critical importance of the road to the project known to closing the deal.The hydro project is being funded in parts by the Inter-American Development Bank (IDB), China Development Bank, Sithe Global and the Guyana Government.Another reason for the delay in financial closure was the demand by financiers for the state-owned Guyana Power and Light Inc. (GPL) to ready its infrastructure for the 165 megawatts project. GPL has been battling technical losses from faulty lines and equipment for years now.IDB was reportedly watching what improvements GPL would be embarking on to ensure that the power generated by the hydro facility would not be largely lost in transmission.GPL problemsAs it is now, GPL’s losses, both from theft by customers and from technical standpoint,Wholesale NFL Jerseys China, are at a worrying 30 per cent of total power generated.A US$40M-plus project is currently underway to fix these problems by running new transmission lines, build substations, and linking the Berbice and Demerara system. Also being addressed is the standardization of GPL’s systems to the 60 hertz cycle.These GPL projects ran into problems after the Opposition in April slashed $5.2B (US$26M) from that state company’s budget claiming there was no immediate clarity how the funds were to be spent.GPL’s management immediately slammed the reduction to the investments which they say would impact the hydro financing by IDB as it had no money to correct the problems.According to Dr. Luncheon, there are not any immediate objections to major issues involving the proposed infrastructure, financing or the Chinese contractor.“We do not have any significant differences or problems or obstacles in seeing this project to closure and to having our strong anticipation to fruition. We continue to be optimistic. We even, and you might quote me, are progressively optimistic about the project.”Regarding that critical access roads, almost US$10M ($2B) was spent prior to 2013. This year, Government has allocated $2.3B (US$11.7M) for the roads and other infrastructural works and for an environmental study.Initially, the roads were budgeted for US$15.4M, a clear indication that almost $1B more is being spent to ensure the roads are completed, in a race against time.The hydro’s manager, Sithe Global and its local subsidiary, Amaila Falls Hydro Inc,Jerseys NFL Cheap, have been largely silent on the project this year.In September last year, the company which says it has successfully developed over 70 power projects in 10 countries, representing more than 18,000 MW of generating capacity, announced that it has signed construction agreement with China Railway. It also signed agreements for due diligence to begin by IDB.“This sets in motion the next phase of lender due diligence and documentation needed to reach project financial closure and begin construction, which is scheduled to start in the second quarter of 2013. The milestones demonstrate the hard work and commitment of all parties in making the project a reality for Guyana,” Sithe Global said. But there has been silence since then.Government would only say that it is now eyeing closure before year end so that construction can begin sometime after.CostsThe Engineering, Procurement & Construction  (“EPC”) Contract with Sithe Global is valued at US$506M, representing the largest infrastructure contract ever executed for Guyana. “Signing the EPC Contract provides price certainty, avoiding the risk of commodity price adjustments for a period of nine months, during which AFH will secure the project financing. The pricing is subject to adjustment in currency fluctuation until financial closure is reached, at which time the pricing will be fixed.”However, the nine months is up next month. Government says that the construction could take up to three and half years.IDB is being asked to issue a loan for US$175M. There are indications that 70 per cent of the total funding will be coming from the China Development Bank and the IDB. China Development Bank will be providing some US$413.2M.Guyana’s equity is expected to be US$100M while Sithe Global will be providing US$152.1M bringing the total project cost to US$840.3M.At a projected average tariff of US$101M, the plant is expected to rake in more than US$2B over the 20-year period on the Build Own Operate and Transfer (BOOT) life of the project.The plant is slated to last for at least 75 years.  Sithe Global, last year January, said it invested some US$11.1M.Since being announced by the former administration, there has been worry over the costs of the project and the implications for consumers and taxpayers alike. While there have been assurances, Guyanese are not being told whether they will be shielded from tariff increases.There have also been issues of what happens to the hydro if Guyana suffers a drought.Government has been targeting the hydro to ease its dependence on fossil fuel for which prices have been hitting record highs in recent years.Hydro power, they say, will attract growth in the country’s fledging agro and other manufacturing industry.Under the proposed arrangements, GPL would purchase power from the hydro project and distribute this to consumers. It would still be required to maintain its current Wartsila and other engines as backups.
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