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Hydro project the ‘epicenter’ of corruption – Ramjattan

October 2, 2011 | By KNews | Filed Under News
Source - Kaieteur News

President Bharrat Jagdeo

Jacking up the cost of the Amaila Falls Hydro Project represents an attempt by the government to fatten the pockets of some of its officials for the rest of their lives, Presidential Candidate of the Alliance for Change, Khemraj Ramjattan, said yesterday.

Only four months ago, the developers of the project, Sithe Global, had issued a guarantee that the project would be US$650 million.

President Bharrat Jagdeo, on Tuesday, stated that the project could end up costing US$835M. This amounts to some US$200M on the cost that the developers, Sithe Global, had indicated earlier this year. In fact, the new price tag cited by the President is more than US$300 than the cost cited by the state-owned Guyana Chronicle earlier this year.

Ramjattan rubbished the government’s explanation that the price increase for commodities is what has driven the cost of the project up, saying that it is an avenue through which Government cronies could get a “permanent kick back.”

Khemraj Ramjattan

He described the project, which would effectively become the largest infrastructure project in Guyana, as the ‘epicenter’ of corruption, given the price tag and the potential kick backs. He said that this sort of corruption is typical with large infrastructure projects in this country.

The government, on Wednesday, linked the bloating cost of the Amaila Falls Hydro Project to added interest costs, price hikes for materials and a political risk insurance that would be used in the construction. It said that it was not ruling out pushing more money into the project.

On October 8, 2009, Prime Minister, Samuel Hinds, signed for the original developers of the project – Synergy Holdings – to transfer its 13-year-old interim licence to Sithe Global for the development of the Hydro Project.

Since then, Head of the Presidential Secretariat, Dr Roger Luncheon said that there have been obvious price increases. He referred to price increases on commodities such as metals, steel and cement, noting that these price escalations feed back into an increase in the construction costs.

However, Ramjattan said that the prices for some of those commodities have in fact dropped over the past months.

As such, Ramjattan said that there needs to be an inquiry into how the cost of the project has risen so much and for the expenses related to the project be detailed.

Jim McGowan

Only four months ago, the Senior Vice President of Sithe Global, Jim McGowan, maintained that the cost of the project would be between US$650 and US$700 million. Since then, the company has said nothing further on the project.

One observer has noted that Jagdeo’s comments on the project were made “by the way” at the commissioning of the new power plant at Kingston, in hopes that it would not have been noted by the media, and that the President would later come back to say that he did in fact talk about the escalating cost of the project.

On May 12, this year, Sithe Global officials issued a guarantee that the project will be completed in three and a half years and will cost no more than US$700 million.

But if the developer defaults on the project, the financiers of the project will reserve the right to seize the assets and name a new developer, McGowan stated at Hotel Tower where the company held a consultation on the project’s Environmental and Social Impact Assessment.

“There is no recourse to the parent company in the event of a default or a limited recourse,” McGowan stated.

“In the event of a default by the company, the lender’s rights are to step in and take ownership of the assets and most likely restructure the deal and to operate it with a new owner.”

McGowan said the current estimate is that the power plant and transmission line to get the electricity to power stations in Linden and Georgetown would be completed in three and a half years.

“That is correct,” he said, when asked if the company was guaranteeing that there will be no escalation in the cost or timeline for the construction of the project.

Dr Luncheon also said that the increased construction cost is linked to the financial arrangement that would attract a different interest charge.

“The cost that originally was captured in the contract and the escalation of the associated and related costs for arranging the financing, interest, insurance, those are responsible for driving up the costs to what it is today,” Dr Luncheon told reported.

With a range of financiers involved in the project, he said that “there are a number of interests that have to be reconciled” before financial closure could be met.

The Project will be financed through debt from the China Development Bank as per an agreed upon funding schedule over the course of the construction period, and equity from Sithe Global and the Guyana Government.

Sithe Global expects to ultimately contribute around US$200 million of equity. The Guyana Government has said that it will use funds from the US$250 million forest-saving deal with Norway to invest in project.

None of the funds under that deal has yet reached Guyana.

However, Dr Luncheon did not rule out that the government could be prepared to raise the amount of funds it commits to the project given its importance to the government.

“For us, this project is so integrally tied into the (ruling) PPP/Civic vision of Guyana and its economic development that a consideration such as that should not be excluded.”

Dr Luncheon said that the government anticipates financial closure by the end of the year, “but I would be the first to concede we had similar anticipations earlier.”

The Amaila Hydropower Project is a planned hydroelectric project (approximately 165MW capacity) to be located in western Guyana.

The project also includes a new 270 km transmission line and new substations near Georgetown.

Currently, nearly all electric generation in Guyana is provided through small units burning either diesel or heavy fuel oil.

The Amaila Project is touted as a substitute for the expensive generation facilities.

The developers say it would not only provide a clean renewable energy source, but also represent important foreign exchange savings for the country by reducing Guyana’s dependence on expensive imported fuels. This year, the Guyana Power and Light will spend US$100 million on fuel for the company.

Replies sorted oldest to newest

quote:
Originally posted by Demerara_Guy:
Hydro project the ‘epicenter’ of corruption – Ramjattan

October 2, 2011 | By KNews | Filed Under News
Source - Kaieteur News

President Bharrat Jagdeo

Jacking up the cost of the Amaila Falls Hydro Project represents an attempt by the government to fatten the pockets of some of its officials for the rest of their lives, Presidential Candidate of the Alliance for Change, Khemraj Ramjattan, said yesterday.

Only four months ago, the developers of the project, Sithe Global, had issued a guarantee that the project would be US$650 million.

PRESIDENT BHARRAT JAGDEO, ON TUESDAY STATED THAT THE PROJECT COULD END UP COSTING US$853M. This amounts to some US$200M on the cost that the developers, Sithe Global, had indicated earlier this year. In fact, the new price tag cited by the President is more than US$300 than the cost cited by the state-owned Guyana Chronicle earlier this year.

Ramjattan rubbished the government’s explanation that the price increase for commodities is what has driven the cost of the project up, saying that it is an avenue through which Government cronies could get a “permanent kick back.”

Khemraj Ramjattan

He described the project, which would effectively become the largest infrastructure project in Guyana, as the ‘epicenter’ of corruption, given the price tag and the potential kick backs. He said that this sort of corruption is typical with large infrastructure projects in this country.

The government, on Wednesday, linked the bloating cost of the Amaila Falls Hydro Project to added interest costs, price hikes for materials and a political risk insurance that would be used in the construction. It said that it was not ruling out pushing more money into the project.

On October 8, 2009, Prime Minister, Samuel Hinds, signed for the original developers of the project – Synergy Holdings – to transfer its 13-year-old interim licence to Sithe Global for the development of the Hydro Project.

Since then, Head of the Presidential Secretariat, Dr Roger Luncheon said that there have been obvious price increases. He referred to price increases on commodities such as metals, steel and cement, noting that these price escalations feed back into an increase in the construction costs.

However, Ramjattan said that the prices for some of those commodities have in fact dropped over the past months.

As such, Ramjattan said that there needs to be an inquiry into how the cost of the project has risen so much and for the expenses related to the project be detailed.

Jim McGowan

Only four months ago, the Senior Vice President of Sithe Global, Jim McGowan, maintained that the cost of the project would be between US$650 and US$700 million. Since then, the company has said nothing further on the project.

One observer has noted that Jagdeo’s comments on the project were made “by the way” at the commissioning of the new power plant at Kingston, in hopes that it would not have been noted by the media, and that the President would later come back to say that he did in fact talk about the escalating cost of the project.

On May 12, this year, Sithe Global officials issued a guarantee that the project will be completed in three and a half years and will cost no more than US$700 million.

But if the developer defaults on the project, the financiers of the project will reserve the right to seize the assets and name a new developer, McGowan stated at Hotel Tower where the company held a consultation on the project’s Environmental and Social Impact Assessment.

“There is no recourse to the parent company in the event of a default or a limited recourse,” McGowan stated.

“In the event of a default by the company, the lender’s rights are to step in and take ownership of the assets and most likely restructure the deal and to operate it with a new owner.”

McGowan said the current estimate is that the power plant and transmission line to get the electricity to power stations in Linden and Georgetown would be completed in three and a half years.

“That is correct,” he said, when asked if the company was guaranteeing that there will be no escalation in the cost or timeline for the construction of the project.

Dr Luncheon also said that the increased construction cost is linked to the financial arrangement that would attract a different interest charge.

“The cost that originally was captured in the contract and the escalation of the associated and related costs for arranging the financing, interest, insurance, those are responsible for driving up the costs to what it is today,” Dr Luncheon told reported.

With a range of financiers involved in the project, he said that “there are a number of interests that have to be reconciled” before financial closure could be met.

The Project will be financed through debt from the China Development Bank as per an agreed upon funding schedule over the course of the construction period, and equity from Sithe Global and the Guyana Government.

Sithe Global expects to ultimately contribute around US$200 million of equity. The Guyana Government has said that it will use funds from the US$250 million forest-saving deal with Norway to invest in project.

None of the funds under that deal has yet reached Guyana.

However, Dr Luncheon did not rule out that the government could be prepared to raise the amount of funds it commits to the project given its importance to the government.

“For us, this project is so integrally tied into the (ruling) PPP/Civic vision of Guyana and its economic development that a consideration such as that should not be excluded.”

Dr Luncheon said that the government anticipates financial closure by the end of the year, “but I would be the first to concede we had similar anticipations earlier.”

THE AMAILA HYDROPOWER PROJECT IS A PLANNED HYDROELECTRIC PROJECT (APPROXIMATELY 165 MW CAPACITY) to be located in western Guyana.
The project also includes a new 270 km transmission line and new substations near Georgetown.

Currently, nearly all electric generation in Guyana is provided through small units burning either diesel or heavy fuel oil.

The Amaila Project is touted as a substitute for the expensive generation facilities.

The developers say it would not only provide a clean renewable energy source, but also represent important foreign exchange savings for the country by reducing Guyana’s dependence on expensive imported fuels. This year, the Guyana Power and Light will spend US$100 million on fuel for the company.


The 180MW =175M


165MW COST = $865M PUT AN X NEXT TO THE CUP FOR PROGRESS


http://www.power-technology.com/projects/karkamis/


The 180MW Karkamis dam and hydroelectric plant cost $175 million and is one of the smaller dams in the South Eastern Anatolian Project (GAP). Dwarfed by the upstream Ataturk dam, it is 4.5km from the Turkish / Syrian border and 33km downstream from the now completed Birecik dam.

GAP (Güneydogu Anadolu Projesi, the project's name in Turkish) is a massive project to build 21 dams and 19 hydroelectric power stations as well as encourage other kinds of economic development in almost every industry. The GAP project leverages on water and soil resources of southeast Turkey which accounts for 20% of the country's agricultural land and 28% of water supply. When finished, the GAP will irrigate 1.82 million hectares of land.

Plant make-up

The power projects under the GAP will have a total installed capacity of 7,476MW and the annual energy production of the project is estimated to reach 27 billion KWH. This will be more than a fifth of Turkey's electricity generation. The length of the top of the dam is 608m and there are six Kaplan turbines with horizontal axes. The 6kV generators have a rating of 35MVA. The three transformers have a rating of 35/70MVA.

The opening ceremony took place in December 1999. Each unit was brought into production one at a time, at a rate of one a month. The whole GAP project is expected to be completed by 2012.

Plant construction

The plant was constructed by an Austro-Turkish consortium. VA Tech Elin was responsible for the electrical equipment's delivery, installation and commissioning. Voith, another Austrian company, was responsible for the delivery, installation and commissioning of six Kaplan turbines (in July 1999, Voith and Siemens announced the merging of their hydro businesses).

"The construction plan was for a 48-month project, and completion was a month ahead of schedule."

Verbundplan, an Austrian firm of consulting engineers, was responsible for project co-ordination. Yuksel Insaat (from Turkey) was responsible for hydromechanical equipment. Temelsu International Engineering Services, also from Turkey, was responsible for detailed civil engineering. The project was supported, in part, by the Austrian Government. The construction plan was for a 48-month project, and completion was a month ahead of schedule. The construction of the powerhouse and spillway, together with erection of the turbine generators, took 32 months. The second phase involved the division of the Euphrates with coffer dams. It also involved the completion of the turbines, and the earth filling of the dams.

Political objection to dams

The dams on the Euphrates have been the subject of strenuous objections from Syria and Iraq. Syria is downstream of the dams. The country formally objected in both 1995 and 1996. As a desert country, it sets a premium on water for irrigation and other purposes. The main fear on the part of these countries is that Turkey, by accident or design, will disrupt the flow of the Euphrates to Syria's disadvantage.

This is a real fear on the part of both Iraq and Syria. Both countries have a history of chequered relations with their northern neighbour. Indeed, in 1990, UN warplanes bombed Iraq from Turkish bases, and Syria is made nervous by Turkey's close relationship with Israel. Both Syria and Iraq have been accused of supporting Kurdish separatists in Turkey.

Reducing separatism

"Turkey is likely to persist with its power generation project in the GAP region since it is of central importance to the country's economic and social development."

The project was also designed to help Turkey suppress its troubles with the Kurds. Kurdish rebels have been waging war on the Turkish government since 1984, in their quest for an independent or autonomous homeland. By creating economic and social development, the GAP project was intended to reduce Kurdish separatism.

Turkey is likely to persist with its power generation project in the GAP region since it is of central importance to the country's economic and social development. The electricity generation is made even more important by the continuing difficulties of Turkey nuclear programme. Turkey had been hoping to generate 10,000MW through nuclear plants by 2020, but its plants are being delayed due to political instability in the region. This makes the power of the GAP plants even more vital. An additional reason for the Turkish government's interest is the political leverage GAP gives Ankara on its downstream neighbours.



When finished, GAP will irrigate 1.69 million hectares of land and generate 23,000GW of hydroelectricity annually.

The Karkamis dam is one of the smaller dams in the South Eastern Anatolian Project (GAP - Güneydogu Anadolu Projesi).

Karkamis has a powerhouse, spillway and two earth filled dams. Work began in 1996

VA Tech Elin delivered, installed and commissioned the electrical equipment.

The Karkamis dam and hydroelectric plant is located on the Euphrates River in Southeastern Turkey.
.







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Follow Us:
sachin_05
Ramjattan sees everything in the negative. This man does not have any kind of positive thing whatsoever. How can he ever become the President?
All he knows is how to cuss up jagdeo.
FM
quote:
Originally posted by Ramakant_p:
Ramjattan sees everything in the negative. This man does not have any kind of positive thing whatsoever. How can he ever become the President?
All he knows is how to cuss up jagdeo.
Pointing out thievery is not a negative. It is a positive attribute.
FM
quote:
Originally posted by TK_REDUX:
quote:
Originally posted by Demerara_Guy:

Hydroelectric power development will again be a reality in Guyana.


Again? When was it a reality?


AGAIN -- correct.

You will eventually know, if you are not aware.
FM
quote:
Originally posted by Demerara_Guy:
quote:
Originally posted by TK_REDUX:
quote:
Originally posted by Demerara_Guy:

Hydroelectric power development will again be a reality in Guyana.


Again? When was it a reality?


AGAIN -- correct.

You will eventually know, if you are not aware.
You do give the three witches of Cawdor a run for their money with equivocation in every sentence. I bet you look like them as well!
FM
quote:
Originally posted by Demerara_Guy:
quote:
Originally posted by TK_REDUX:
quote:
Originally posted by Demerara_Guy:

Hydroelectric power development will again be a reality in Guyana.


Again? When was it a reality?


AGAIN -- correct.

You will eventually know, if you are not aware.


Haha...you must be very disappointed in Jagdeo eh? But race will keep you in fold of incompetence and corruption.
T
quote:
Originally posted by D2:

You do give the three witches of Cawdor a run for their money with equivocation in every sentence. I bet you look like them as well!


Belonging to and resembling the witches are perhaps your personal achievement.
FM
quote:
Originally posted by TK_REDUX:
quote:
Originally posted by Demerara_Guy:
quote:
Originally posted by TK_REDUX:
quote:
Originally posted by Demerara_Guy:

Hydroelectric power development will again be a reality in Guyana.


Again? When was it a reality?


AGAIN -- correct.

You will eventually know, if you are not aware.


Haha...you must be very disappointed in Jagdeo eh?

But race will keep you in fold of incompetence and corruption.


Hydroelectric power development is the issue.
FM
quote:
Originally posted by caribj:
quote:
Originally posted by Demerara_Guy:
Hydroelectric power development will again be a reality in Guyana.


do they have almost $ 1 billion?


Not with the current thieves in office they have used and abused the PPP it is time for us to get another group there to put them back in check.

This group needs a serious slap on the wrists to get back in line.
J
quote:
Originally posted by Demerara_Guy:
quote:
Originally posted by D2:

You do give the three witches of Cawdor a run for their money with equivocation in every sentence. I bet you look like them as well!


Belonging to and resembling the witches are perhaps your personal achievement.
you don't "achieve" your personality or your looks knuckle head.
FM
quote:
Originally posted by D2:
quote:
Originally posted by Demerara_Guy:
quote:
Originally posted by D2:

You do give the three witches of Cawdor a run for their money with equivocation in every sentence. I bet you look like them as well!


Belonging to and resembling the witches are perhaps your personal achievement.


you don't "achieve" your personality or your looks knuckle head.


Continued reflecting on yourself. Big Grin
FM

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