Amaila Falls Hydropower Project now highly unlikely

Amaila Falls Hydropower Project now highly unlikely

By
 - SN
2 hours ago
 

The government today released the final report on the feasibility of the Amaila Falls Hydropower Project and the project now appears to be off the table as a number of risks have been pointed out by the author, Norconsult.

A statement from the Ministry of the Presidency follows:

Guyana’s long term energy plan for the transition to the increased use of renewable energy is expected to be presented to Cabinet by mid-January. Minister of Public Infrastructure, Mr. David Patterson, in an invited comment, earlier today, said that “final touches are being made to the draft document” and once Cabinet has had their input, it will be released to the wider public.  He also noted that the Government is committed to exploring all avenues for the development of renewable energy in keeping with its ‘green’ development agenda.

This comes even as the Government of Norway has released the report on the review of the Amaila Falls Hydropower Project (AFHP) done by Norconsult, an engineering and design consultancy firm out of Norway contracted by the Government of Norway to complete an ‘objective and facts-based’ assessment of the project on the agreement of two Governments.

Though the project is just one of several renewable energy options being looked at by Guyana, Government believes that the Report identifies several risks and flaws in the design of the project, which will threaten its long-term effectiveness and prove too costly and burdensome to the people of Guyana and the country as a small developing state.

The Amaila Falls

The Government considers this review of utmost importance as it provides indisputable evidence to support the position taken while in opposition that the Hydropower project in its current configuration does not meet minimum requirements to ensure its viability and longevity.  It is the view of the Government that the Norconsult Report has given credence to its position on the need for an energy mix to increase the country’s share of renewable energy by close to 100 percent by the year 2025. The Report also provides supporting evidence that the Amaila Falls Hydropower Project would not be optimal in its current model and presents an unbalanced risk to the Government and People of Guyana.

Rectifying the many issues identified will increase the total cost of the project substantially, thereby impacting the tariff rates from the outset. Additionally, there are at least six more years of work to be completed, including a minimum three years of water flow study and analysis on the project.

Having studied the Report and conscious of the specific needs of the country, the Government of Guyana proposes to utilise a mix of energy options, starting with less risky options such as solar and wind, as outlined in Budget 2017.

Provisions have been made for expansion of the scope of clean, alternative energy in the country resulting in more reliable electricity supply; the establishment of programmes to promote energy efficiency at a household level for financial savings to householders; budgetary allocations of almost $1 billion dollars for renewable energy and energy efficiency projects; the installation of solar photovoltaic (PV) systems on the rooftops of 64 Government buildings; the installation of a large scale solar farm in Mabaruma with smaller solar farms in Lethem, Mahdia and Bartica; a one off tax holiday concession of two years for corporation tax to the business community for the importation of items related to wind and solar energy investments, water treatment, waste disposal and recycling facilities and the replacement of inefficient lights with their energy efficient counterparts.

Itemised below are some of the risks and flaws identified in the report:

  • The absence of a separate flywheel between the turbine and the generator.  This is described by Norconsult as a highly uncommon design and impractical for vertical shaft units of a size as in the case of AFHP.  This requirement is also notably absent from the Engineering/Procurement/Construction (EPC) Contract drawings, the technical description of the project, the Bill of Quantities and in the Independent Engineer’s Due Diligence Report of 2013.
  • While the report acknowledges the existence of an escarpment just beyond the midway point of the tunnel routing alignment, creating a horizontal distance of about 1.2 km from the vertical pressure shaft inside the mountain ridge to the powerhouse at the end of the tunnel, this configuration has resulted in the pressure shaft and pressure tunnel being quite expensive plant components. The report goes on to state “Considering the longitudinal profile of the waterway and apparent suitable rock conditions, we find it surprising that an underground powerhouse is not mentioned anywhere as a project layout alternative”. This observation is also supported by a short note in the Independent Engineer’s (IE) report, which stated that more usually a powerhouse underground would have been expected under natural conditions as encountered at Amaila Falls.
  • Norconsult report further identifies the absence of several details from the Owner’s requirement including the “minimum requirement to overall plant efficiency, which includes the hydraulic losses in the waterway”. A major headache for the project is identified in the statement “The power plant is required to yield a certain output (MW) at a certain headwater level with no maximum figure set for the corresponding turbine water flow. Therefore the EPC Contractor could chose to diminish the cross area (diameter) of the tunnels in order to save cost and compensate by increasing the water flow. This would mean less energy production of the same amount of water and thereby a less efficient utilisation of the Amaila Falls as a hydropower resource.”
  • Norconsult further points out that “19 m head loss in about 3 km long headrace tunnel is higher than would be expected for a hydropower plant designed by traditional procedures for hydraulic optimisation”.  The report goes on to state that “the dimensions described for the pressure shaft and pressure tunnel are also not sufficient for satisfying requirements for regulation stability”.
  • Norconsult further notes the absence of any sediment handling methodology in the design of the plant. This is quite a serious issue since sedimentation can threaten the plant’s continued operation.
  • Norconsult also questions the steel lining proposed for the tunnel lining and notes that risks associated with this configuration can be reduced by an “expensive vertical core drilling from the surface and down the hole hydraulic splitting tests at different levels in the holes” or “Alternatively, the risk could be eliminated by assuming steel lining in the whole length from the powerhouse up to the top of the pressure shaft with a substantial additional cost, which would then be reflected in the tariff from the beginning.”
  • The report clearly establishes that the overall project layout chosen as the “Owner’s Requirement” for the EPC Contract may not be the optimum solution for the project. This is particularly informed by the report finding of absence of “any indication in the project material that these layouts have been compared with an alternative underground powerhouse location, which could eliminate the frequency stability problem and give substantial cost saving for the tunnel system and the generating units.”
  • The analyses of other renewable energy alternatives considered biomass, PV and wind projects.  Biomass while much cheaper at 4.4UScents/kWH which require clearing of large areas of forest since sufficient biomass is unavailable otherwise. The report further states “PV solar and wind projects were at the time more expensive than Amaila Falls with unit costs of 26 and 14 USc/kWh, respectively. However, recent projects in other developing countries have shown that the cost of PV solar and wind projects have dropped significantly and may now be more competitive (as part of energy mix) but from a system point of view, solar power is not sufficiently stable and can therefore not be recommended as the main source of power in the main grid. Solar may be used in off-grid areas with battery back-up and or in the main grid for generation during day-time, but it cannot function as source for base load power.”
Original Post
Zed posted:

It might be prudent holding off getting on your high horse until the full report is made available and other experts have had a time to study it and make comments. This is a statement coming out from the GoG.

Understood.  I have the report.

Zed posted:

It might be prudent holding off getting on your high horse until the full report is made available and other experts have had a time to study it and make comments. This is a statement coming out from the GoG.

Norway has the most reliable engineers for dams. I take them at their word.

This is the Conclusion from the report:

Conclusion
From a financial and economic point of view, development of Amaila Falls seems to be the optimal solution for meeting the electricity demand in Guyana. The project should be financially restructured in order to make it more attractive for GOG and potential investors. Since the perceived risks of investing in Guyana are high, mainly due to political and regulatory reasons, one possible way for Norway to support the project would be to issue guarantees to the project for the repayment of the loan. This would reduce the financing costs substantially, and the risks for the equity sponsor of the project. We recommend that possible guarantee support mechanisms are evaluated as part of the further work on the project.
The financing challenge as a result of the perceived risk of investing in Guyana would be the same for all projects of a similar size, and substituting AFHP with another hydropower project of a similar size would not make any difference. With the suggested financial restructuring of the project, the annual payments from GPL may be reduced by 20% compared to the original proposal, and the annual costs for GPL would significantly lower than operating the existing thermal plants in Guyana.

Here is an interesting paragraph in the report:

Amaila Falls alone cannot provide a 100% emission free power generation in Guyana. Other generating sources will have to be added in parallel like sun, wind and thermal production based on emission neutral fuel (bagasse) for back-up in the dry periods when the water flow to AFHP may be insufficient for full capacity operation. As the power demand is growing, and for reaching the goal of 100% emission free generation by 2025, as assumed by the LCDS, a second hydropower plant of capacity comparable with AFHP will have to be commissioned by 2025. In parallel with preparations for AFHP, therefore, pre-feasibility studies will have to be carried out for promising candidates for the second hydropower project and a full feasibility study be performed for the selected candidate.

Another paragraph:

Our estimate is that 3 years will be required from a decision is taken to resume project preparation for AFHP until Financial Close and Notice to Commence to the EPC Contractor.
From this point in time, we estimate another 3.5 years for construction until start commercial operation of Amaila Falls Hydropower Project.

Of course, Amailia is necessary in the long run, but it is a matter of sequencing and optimal timing. Anyone with a good understanding of microeconomics and project analysis would have seen the risk early, even before the engineers formalize it. This is was so obvious. I keep saying Jagdeo needs to overhaul Accrebre college. It needs to be less ideological and more nationalistic. BTW, before some people start yapping about manufacturing, just take a moment to observe that Guyana once manufactured refrigerators, stoves, small SUV (tapir), small and medium-sized ships, garments, tires, radios, consumer products like toothpaste, etc, as well as having a variety of first-rate food processing capabilities WITHOUT HYDROELECTRICITY.

TK, nice to see that you are back on the board. Now, I can continue my training in economics.

i think Accrebe College is no longer in existence. The PPP sold the land a long time ago to Mazarally and purchased a piece of land in LBI where they intended to build. College. It never materialized so every morning, from my hammock, I look across to this large vacant plot of land.

I am unsure what you mean when you say that the ppp should be less ideological and more nationalistic. Many of us who have been following things in Guyana have criticized Jagdeo for not paying enough attention to ideology.

yes, Guyana manufactured these items, but at what cost. And all of these ventures failed. Additionally, we are living in a more globalize economy and I am not certain that those enterprises will survive if re-established in Guyana at this time. Electricity cost is one Factor in the decision matrix, but not the most important one. There are many more important factors that need to be considered.

Zed posted:

TK, nice to see that you are back on the board. Now, I can continue my training in economics.

i think Accrebe College is no longer in existence. The PPP sold the land a long time ago to Mazarally and purchased a piece of land in LBI where they intended to build. College. It never materialized so every morning, from my hammock, I look across to this large vacant plot of land.

I am unsure what you mean when you say that the ppp should be less ideological and more nationalistic. Many of us who have been following things in Guyana have criticized Jagdeo for not paying enough attention to ideology.

yes, Guyana manufactured these items, but at what cost. And all of these ventures failed. Additionally, we are living in a more globalize economy and I am not certain that those enterprises will survive if re-established in Guyana at this time. Electricity cost is one Factor in the decision matrix, but not the most important one. There are many more important factors that need to be considered.

One of the main reasons why those businesses failed was because of migration of the people who had the know how to do them. Then, the trade liberalization under Hoyte's ERP was another factor. If they survived they would have evolved into being more competitive and in case the country would have had at least two big hydros by now. Electricity is only one aspect of the cost of business in that country, and places like DDL and Banks are generating electricity at rates consistent with the proposed Amaila. That Jagdeo refuses to remove Marxism-Leninism from PPP constitution suggests he is ideological, although his business interests tend to muddy the ideological basis.

I was not aware Accrebre is defunct. It was fun attending it even if it was ideology with no nationalist or historical appreciation. It was fun having short lectures Dr Luncheon, Dr Jagan, Dr Henry Jeffrey, Mr Feroz Mohamed, Pandit Reepu and others. Even as a 19 year old kid, I knew what they were saying made little sense, but it was cute extreme left-wing stuff. That's why I went on to UG and eventually to America's No. 1 Progressive University.

 

 I never attended it, nor accepted any of the scholarships. I was too much of a free thinker and well read by the time I completed high school.

jagdeo's refusal to remove Marxism -Leninism is more a product of internal party politics and personal hegemonic imperatives than an adherence to that ideology.  I cannot think of any economic policy initiative that he implemented in his years as president that emanated from that ideology.

TK posted:

Of course, Amailia is necessary in the long run, but it is a matter of sequencing and optimal timing. Anyone with a good understanding of microeconomics and project analysis would have seen the risk early, even before the engineers formalize it. This is was so obvious. I keep saying Jagdeo needs to overhaul Accrebre college. It needs to be less ideological and more nationalistic. BTW, before some people start yapping about manufacturing, just take a moment to observe that Guyana once manufactured refrigerators, stoves, small SUV (tapir), small and medium-sized ships, garments, tires, radios, consumer products like toothpaste, etc, as well as having a variety of first-rate food processing capabilities WITHOUT HYDROELECTRICITY.

All of these were within a "planned economic" model of the PNC.  They existed because of heavy subsidies from the Govt.  Furthermore, the world has changed quite a lot from back then.  If I remember, the Brits were still a big auto producer back then.  Furthermore, back then, Guyana still had a reliable power source, which was not being reinvested, thus the eventual collapse.  All these PNC initiatives were done at the expense of the underlying economic backbone, all of which eventually gave way under the weight of these non-viable enterprises.

However, let me add, I do believe some of the initiatives were actually good and should have been taken up by the PPP Govt. I believe the downstream food and beverage industry were areas of natural competitive advantage the PPP should have explored.

Many of these companies you mentioned went under because they were not viable under their own weight.  Durable goods are levied with high duties and yet locals such as GRL, GRECO, glass, cotton, etc, were never resuscitated by privates.  They were just not sustainable even with the GoG granting duty-free concession on capital equipment!

TK, you are a professional economist and should get over your hatred for BJ and the PPP and be a bit more objective and truthful regarding the successes and failings of both the PPP and PNC.  Just remember, Guyana went bankrupt under the PNC model!

 

This was also part of the findings and conclusion of NORAD.  In the end, BJ and the PPP will be vindicated!
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The new government has confirmed its devotion to the Low Carbon Development Strategy (LCDS), which was introduced in 2009 by the former government and confirmed by its updated LCDS declaration in 2013. With the aim of finding a way forward for the transition of Guyana’s power generation system, Government of Guyana represented by the Minister of Finance and the Minister of Natural Resources and the Government of Norway represented by the Minister of Climate and Environment, decided in December 2015 to perform “an objective and facts-based” assessment of AFHP.

On June 20th 2016 NORAD (Norwegian Agency for Development Co-operation), in support of NICFI signed an agreement with Norconsult AS for carrying out an initial analysis. Main conclusions and recommendations are presented below: 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 levelised unit cost in the same range as the most attractive alternatives.

TK posted:
Zed posted:

TK, nice to see that you are back on the board. Now, I can continue my training in economics.

i think Accrebe College is no longer in existence. The PPP sold the land a long time ago to Mazarally and purchased a piece of land in LBI where they intended to build. College. It never materialized so every morning, from my hammock, I look across to this large vacant plot of land.

I am unsure what you mean when you say that the ppp should be less ideological and more nationalistic. Many of us who have been following things in Guyana have criticized Jagdeo for not paying enough attention to ideology.

yes, Guyana manufactured these items, but at what cost. And all of these ventures failed. Additionally, we are living in a more globalize economy and I am not certain that those enterprises will survive if re-established in Guyana at this time. Electricity cost is one Factor in the decision matrix, but not the most important one. There are many more important factors that need to be considered.

One of the main reasons why those businesses failed was because of migration of the people who had the know how to do them..

Well, which is the chicken and which is the egg.  Did the migration cause businesses to fail or did the failure of businesses and the general economy cause people to migrate?

My understanding and experience, Guyana's migration were people seeking better economic alternatives.  There were other factors, including PNC Afro-Centric apartheid, racism, oppression and police/military brutality.  However, most were seeking better economic outcomes in their lives!

How quickly people forget what the PNC represented!

ba$eman posted:
 
 

Well, which is the chicken and which is the egg.  Did the migration cause businesses to fail or did the failure of businesses and the general economy cause people to migrate?

 

Haul yuh racist ass dah side. More people migrated from under PPP/C regime. Look at the decline of the Indo population during the 23 years that PPP/C occupied office. Stop being a slave to your racist mentality.

Zed posted:

Electricity cost is one Factor in the decision matrix, but not the most important one. There are many more important factors that need to be considered.

Zed, what field were you involved in?  I think it is a fundamental understanding that energy, mainly cheap and reliable electricity, is the most important factor in the development of any country.

What other factors are you implying?  Political stability, human capital etc.?

Again, i think cheap and reliable electricity is the most important.

VVP posted:
Zed posted:

Electricity cost is one Factor in the decision matrix, but not the most important one. There are many more important factors that need to be considered.

Zed, what field were you involved in?  I think it is a fundamental understanding that energy, mainly cheap and reliable electricity, is the most important factor in the development of any country.

What other factors are you implying?  Political stability, human capital etc.?

Again, i think cheap and reliable electricity is the most important.

VVP...I have a question for you. Let's say the hydro is up and running. Would there be no blackouts?

ba$eman posted:

This was also part of the findings and conclusion of NORAD.  In the end, BJ and the PPP will be vindicated!
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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 levelised unit cost in the same range as the most attractive alternatives.

This paragraph is the problem. So, Amaila was the ONLY project with full feasibility study completed. HENCE, how do we know that Amaila is the best choice when no feasibility study was done on alternatives. For example, Tiger Fall? You cannot speak of alternatives when you have not even assessed the opportunity cost or alternatives. I have not read the report, but if this is what it says I would have serious doubt.

 

ba$eman posted:
TK posted:

Of course, Amailia is necessary in the long run, but it is a matter of sequencing and optimal timing. Anyone with a good understanding of microeconomics and project analysis would have seen the risk early, even before the engineers formalize it. This is was so obvious. I keep saying Jagdeo needs to overhaul Accrebre college. It needs to be less ideological and more nationalistic. BTW, before some people start yapping about manufacturing, just take a moment to observe that Guyana once manufactured refrigerators, stoves, small SUV (tapir), small and medium-sized ships, garments, tires, radios, consumer products like toothpaste, etc, as well as having a variety of first-rate food processing capabilities WITHOUT HYDROELECTRICITY.

All of these were within a "planned economic" model of the PNC.  They existed because of heavy subsidies from the Govt.  Furthermore, the world has changed quite a lot from back then.  If I remember, the Brits were still a big auto producer back then.  Furthermore, back then, Guyana still had a reliable power source, which was not being reinvested, thus the eventual collapse.  All these PNC initiatives were done at the expense of the underlying economic backbone, all of which eventually gave way under the weight of these non-viable enterprises.

However, let me add, I do believe some of the initiatives were actually good and should have been taken up by the PPP Govt. I believe the downstream food and beverage industry were areas of natural competitive advantage the PPP should have explored.

Many of these companies you mentioned went under because they were not viable under their own weight.  Durable goods are levied with high duties and yet locals such as GRL, GRECO, glass, cotton, etc, were never resuscitated by privates.  They were just not sustainable even with the GoG granting duty-free concession on capital equipment!

TK, you are a professional economist and should get over your hatred for BJ and the PPP and be a bit more objective and truthful regarding the successes and failings of both the PPP and PNC.  Just remember, Guyana went bankrupt under the PNC model!

 

Actually, none of those companies were started after independence. They were pre-independence companies. Many start leaving because of Cooperative Socialism. The ERP was the final straw.

TK posted:
VVP posted:
Zed posted:

Electricity cost is one Factor in the decision matrix, but not the most important one. There are many more important factors that need to be considered.

Zed, what field were you involved in?  I think it is a fundamental understanding that energy, mainly cheap and reliable electricity, is the most important factor in the development of any country.

What other factors are you implying?  Political stability, human capital etc.?

Again, i think cheap and reliable electricity is the most important.

VVP...I have a question for you. Let's say the hydro is up and running. Would there be no blackouts?

The report itself recognize that there are periods of dry spell where Amaila cannot operate at full capacity.  At one point it said that the operation is more like a run of river type (which seems to me like there is not sufficient reservoir capability).  This means they would still have to carry backup generation to serve the load.  If Amaila cannot generate for lack of water flow they will have to have total load backup.  So if there is not sufficient backup there could be blackout.

No blackouts cannot be guaranteed, even in the USA where massive amounts are spent on reliability.  The loss of a transmission tower could result in blackout under the Amaila construct.  Gotta run.

VVP posted:
TK posted:
VVP posted:
Zed posted:

Electricity cost is one Factor in the decision matrix, but not the most important one. There are many more important factors that need to be considered.

Zed, what field were you involved in?  I think it is a fundamental understanding that energy, mainly cheap and reliable electricity, is the most important factor in the development of any country.

What other factors are you implying?  Political stability, human capital etc.?

Again, i think cheap and reliable electricity is the most important.

VVP...I have a question for you. Let's say the hydro is up and running. Would there be no blackouts?

The report itself recognize that there are periods of dry spell where Amaila cannot operate at full capacity.  At one point it said that the operation is more like a run of river type (which seems to me like there is not sufficient reservoir capability).  This means they would still have to carry backup generation to serve the load.  If Amaila cannot generate for lack of water flow they will have to have total load backup.  So if there is not sufficient backup there could be blackout.

No blackouts cannot be guaranteed, even in the USA where massive amounts are spent on reliability.  The loss of a transmission tower could result in blackout under the Amaila construct.  Gotta run.

I only experienced ONE blackout in the US in 15 years. So, would this hydro put us in a situation of one blackout every 15 years? I would take that any day.

TK posted:

I only experienced ONE blackout in the US in 15 years. So, would this hydro put us in a situation of one blackout every 15 years? I would take that any day.

We get here in New England during severe winter or stormy conditions,does not last very long.

VVP posted:
Zed posted:

Electricity cost is one Factor in the decision matrix, but not the most important one. There are many more important factors that need to be considered.

Zed, what field were you involved in?  I think it is a fundamental understanding that energy, mainly cheap and reliable electricity, is the most important factor in the development of any country.

What other factors are you implying?  Political stability, human capital etc.?

Again, i think cheap and reliable electricity is the most important.

I will mention Venezuela as my answer to your comments.

TK posted:
ba$eman posted:

This was also part of the findings and conclusion of NORAD.  In the end, BJ and the PPP will be vindicated!
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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 levelised unit cost in the same range as the most attractive alternatives.

This paragraph is the problem. So, Amaila was the ONLY project with full feasibility study completed. HENCE, how do we know that Amaila is the best choice when no feasibility study was done on alternatives. For example, Tiger Fall? You cannot speak of alternatives when you have not even assessed the opportunity cost or alternatives. I have not read the report, but if this is what it says I would have serious doubt.

 

They did evaluate others but come to the early conclusion that Amelia was the best.  You can argue they should have went to the enth degree however, they concluded on Amelia.

Mitwah posted:

Why not harness smaller falls  and hook them up into a national grid? This might handle the constant blackout problems.

I'm sure after Amelia the Govt would be looking to harness others but you have to start somewhere.  Furthermore, having the fossil back up is also a viable and acceptable alternative.  What do you think will happen in a Solar power grid?

TK posted:
ba$eman posted:

This was also part of the findings and conclusion of NORAD.  In the end, BJ and the PPP will be vindicated!
---------------------------------------------------------------------------

 

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 levelised unit cost in the same range as the most attractive alternatives.

This paragraph is the problem. So, Amaila was the ONLY project with full feasibility study completed. HENCE, how do we know that Amaila is the best choice when no feasibility study was done on alternatives. For example, Tiger Fall? You cannot speak of alternatives when you have not even assessed the opportunity cost or alternatives. I have not read the report, but if this is what it says I would have serious doubt.

 

Are you saying that back in 2008, Amelia falls was chosen from hat(Jagdeo and PPP randomly chose) and no other pre feasibility study was done on any other river to narrow the most feasible to be Amelia?

TK posted:
ba$eman posted:
TK posted:

Of course, Amailia is necessary in the long run, but it is a matter of sequencing and optimal timing. Anyone with a good understanding of microeconomics and project analysis would have seen the risk early, even before the engineers formalize it. This is was so obvious. I keep saying Jagdeo needs to overhaul Accrebre college. It needs to be less ideological and more nationalistic. BTW, before some people start yapping about manufacturing, just take a moment to observe that Guyana once manufactured refrigerators, stoves, small SUV (tapir), small and medium-sized ships, garments, tires, radios, consumer products like toothpaste, etc, as well as having a variety of first-rate food processing capabilities WITHOUT HYDROELECTRICITY.

All of these were within a "planned economic" model of the PNC.  They existed because of heavy subsidies from the Govt.  Furthermore, the world has changed quite a lot from back then.  If I remember, the Brits were still a big auto producer back then.  Furthermore, back then, Guyana still had a reliable power source, which was not being reinvested, thus the eventual collapse.  All these PNC initiatives were done at the expense of the underlying economic backbone, all of which eventually gave way under the weight of these non-viable enterprises.

However, let me add, I do believe some of the initiatives were actually good and should have been taken up by the PPP Govt. I believe the downstream food and beverage industry were areas of natural competitive advantage the PPP should have explored.

Many of these companies you mentioned went under because they were not viable under their own weight.  Durable goods are levied with high duties and yet locals such as GRL, GRECO, glass, cotton, etc, were never resuscitated by privates.  They were just not sustainable even with the GoG granting duty-free concession on capital equipment!

TK, you are a professional economist and should get over your hatred for BJ and the PPP and be a bit more objective and truthful regarding the successes and failings of both the PPP and PNC.  Just remember, Guyana went bankrupt under the PNC model!

 

Actually, none of those companies were started after independence. They were pre-independence companies. Many start leaving because of Cooperative Socialism. The ERP was the final straw.

Nonsense, GRL was built in Soesdyke in the 70's, I saw it constructed as a school boy.  The glass factory was built by the Chinese on the Linden highway in the 70's.  The Tapir was built by Ainlim, in the 70's.  I did a school tour of GRECO on the East Coast in the 70's when it was just set up.  I agree ship-building (FIL) was pre-independence, but that was a victim of the industrial economics.

All those initiatives were kicked off after Guyana became a republic when the PNC tried to industrialize Guyana.  This was a good thought, but not all were ever viable.  They bled the existing economic engines and everything collapsed.

All these Guy-brands surfaced in the 70's!

Billy Ram Balgobin posted:

Discrediting Jagdeo at the expense of our economy is the silliest thing this gov't. can do.  They don't want Jagdeo's name to be associated with a major project like this.  This is the real reason for their opposition to the project.

Billy, cost of the project have to taken in to consideration,the size of Amelia hydro plant seems high comparable to others of the same size built in different countries.

Drugb posted:
TK posted:
ba$eman posted:

This was also part of the findings and conclusion of NORAD.  In the end, BJ and the PPP will be vindicated!
---------------------------------------------------------------------------

 

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 levelised unit cost in the same range as the most attractive alternatives.

This paragraph is the problem. So, Amaila was the ONLY project with full feasibility study completed. HENCE, how do we know that Amaila is the best choice when no feasibility study was done on alternatives. For example, Tiger Fall? You cannot speak of alternatives when you have not even assessed the opportunity cost or alternatives. I have not read the report, but if this is what it says I would have serious doubt.

 

Are you saying that back in 2008, Amelia falls was chosen from hat(Jagdeo and PPP randomly chose) and no other pre feasibility study was done on any other river to narrow the most feasible to be Amelia?

X = Amaila; Y = Alternative. The report clearly says detail studies were done on X, but not the set of Y. If that's the case, the report cannot logically say anything about alternative hydro options. What it can say is that Amaila would likely be an improvement over the present 100% fossil fuel source, it's US$1 bill risk in a US$ 3 bill GDP economy notwithstanding. I think given this report the time has come to start implementing Amaila, knowing that in the history of big projects in Guyana there has always been cost overruns.

ba$eman posted:
TK posted:
ba$eman posted:
TK posted:

Of course, Amailia is necessary in the long run, but it is a matter of sequencing and optimal timing. Anyone with a good understanding of microeconomics and project analysis would have seen the risk early, even before the engineers formalize it. This is was so obvious. I keep saying Jagdeo needs to overhaul Accrebre college. It needs to be less ideological and more nationalistic. BTW, before some people start yapping about manufacturing, just take a moment to observe that Guyana once manufactured refrigerators, stoves, small SUV (tapir), small and medium-sized ships, garments, tires, radios, consumer products like toothpaste, etc, as well as having a variety of first-rate food processing capabilities WITHOUT HYDROELECTRICITY.

All of these were within a "planned economic" model of the PNC.  They existed because of heavy subsidies from the Govt.  Furthermore, the world has changed quite a lot from back then.  If I remember, the Brits were still a big auto producer back then.  Furthermore, back then, Guyana still had a reliable power source, which was not being reinvested, thus the eventual collapse.  All these PNC initiatives were done at the expense of the underlying economic backbone, all of which eventually gave way under the weight of these non-viable enterprises.

However, let me add, I do believe some of the initiatives were actually good and should have been taken up by the PPP Govt. I believe the downstream food and beverage industry were areas of natural competitive advantage the PPP should have explored.

Many of these companies you mentioned went under because they were not viable under their own weight.  Durable goods are levied with high duties and yet locals such as GRL, GRECO, glass, cotton, etc, were never resuscitated by privates.  They were just not sustainable even with the GoG granting duty-free concession on capital equipment!

TK, you are a professional economist and should get over your hatred for BJ and the PPP and be a bit more objective and truthful regarding the successes and failings of both the PPP and PNC.  Just remember, Guyana went bankrupt under the PNC model!

 

Actually, none of those companies were started after independence. They were pre-independence companies. Many start leaving because of Cooperative Socialism. The ERP was the final straw.

Nonsense, GRL was built in Soesdyke in the 70's, I saw it constructed as a school boy.  The glass factory was built by the Chinese on the Linden highway in the 70's.  The Tapir was built by Ainlim, in the 70's.  I did a school tour of GRECO on the East Coast in the 70's when it was just set up.  I agree ship-building (FIL) was pre-independence, but that was a victim of the industrial economics.

All those initiatives were kicked off after Guyana became a republic when the PNC tried to industrialize Guyana.  This was a good thought, but not all were ever viable.  They bled the existing economic engines and everything collapsed.

All these Guy-brands surfaced in the 70's!

Well there you go. Forbes did do good stuff and without hydro, yet ayoo denigrate him for just being a blackman. If you just do some studies of industrial policy you will see that Toyota received 40 years of govt protection before it became the great company it is. Ditto Samsung, Daewoo and many others. This is why you guys will need to stop teaching PYO kids hogwash and give them perspectives that would make them better government planners when they win elections. PPP has never had trouble mobilizing politically. It's problems are governance in an ethnically divided kuntry. 

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