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– Former Auditor GeneralIt is not possible for the Government of Guyana to guarantee payments to any entity unless it is state-owned or controlled.This is the stark reminder of former Auditor General Anand Goolsarran, who in his continued analysis of the Amaila Falls Hydro Electric project and its financing structure said that the company for which Government is looking to make guarantees, is privately owned.Amaila Falls Hydro Inc is 60 per cent owned by Sithe Global.Former Auditor General Anand GoolsarranThe financial analyst says further that on top of the guarantee that Government was looking to put in place for the Amaila Falls project, the Guyana Power and Light Inc. (GPL) itself had pledged all of its assets as security for honouring the payments.Goolsarran has since questioned why the government would still want to put in place a guarantee when the power company had already pledged its assets.Speaking to the raising of the debt ceiling, Goolsarran in his assessment said that the government’s original request was $150B, which coincides with the cost of the project minus the government’s contribution.“Could it there be that Sithe Global was indirectly trying to extend covering for its own investment as well as the loans from the China Development Bank and the Inter-American Development Bank (IDB)?” asked Goolsarran.Meanwhile, Howard University Professor, and former General Manager of the Guyana Agricultural and Industrial Development Bank (GAIBANK), Dr Kenrick Hunte, in adding his voice to the debate, has sought to debunk the claim by Head of State, Donald Ramotar, that the government would not be incurring any debt in the manner with which it was pursuing the project.“This cannot be the case because the Government has requested Parliamentary approval to pay from the Treasury up to $150B or US$750M for default payments to Amaila by Guyana Power and Light (GPL), signaling that the Treasury would have to record this liability on the national books,” Hunte said.He suggested also that with Sithe Global seeking to get 100 percent ‘buy-in’ from all Parliamentary parties, “this is implicitly a non-revocable guarantee from the Treasury that is better than political risk insurance bought in financial markets.”Dr Hunte says that the rationale for political and financial guarantees in this project is based on the fact that GPL is currently not a financially viable company that can generate large cash-flows sufficient enough to pay in full and on-time its debts to Amaila.“Evidence suggests that GPL has not been a profitable undertaking for many years and recent audited reports show that it made losses instead of profits, despite its almost monopoly status in the economy…Evidence will also show that GPL financing for capital works are covered by the Treasury, once Parliament approves those requests made by the Ministry of Finance.”Dr Hunte also pointed out that “these are Treasury transfers with no repayment terms; hence, the need for Treasury guarantees for Amaila as any financial dependency on GPL will be misguided and a high risk for investors.”According to Dr Hunte, the rule in investment projects, is that the higher the risk, the higher the return.“This however does not seem to be the case in the Amaila project…Specifically,Jerseys From China, the government’s initial guarantee of $150B is equivalent to US$750M, implying that all foreign lenders are covered by Guyanese tax payers through the guarantee issued by the Guyana Treasury.”He says that the main implication of this guarantee is that all the debt and risk are solely owned by the government and there is no risk to the lenders Sithe Global, the IDB or the China Exim Bank.Dr Hunte said too that what is even more intriguing is the fact that Sithe Global was guaranteed a rate of return of 19 per cent for no risk, while the government has all the risk.According to Dr Hunte, “the fact that the approved amount by Parliament for the guarantee was less than US$750M and there was no consensus by Parliament endorsing the project, unreservedly indicates that the risk exposure was too great for at least one investor who walked away…Given these concerns, President Ramotar cannot be right about who owns the debt in Amaila.”