It is imperative that the calculations behind the AFHP electrical energy per kWh are indicated
The government recently paid for color double pages in daily newspapers touting the Amaila Falls Hydroelectric Project (AFHP) to power Guyana’s future. The highest justification is the 2016 Norconsult AFHP report, which states: “The only realistic path for Guyana towards an emission-free electricity sector is to develop its hydroelectric potential. The fastest way forward is to keep the AFHP as the first major step to replace its current fuel oil generation. While this was debatable in 2016, it is no longer the case. Solar energy has overtaken it. I compared the costs and conveniences of solar power, gas to power conversion project, AFHP and LPG in a recent article, https://www.stabroeknews.com/2021/11 / 01 / features / in-the-diaspora / the solar-alternative-for-guyana /. In fact, AFHP with a price of 900 million US dollars (we hear about about 1 billion US dollars now) for 165 MW came in at 38 US cents per kWh unit of electricity, which is more than the 17 US cents for gas for energy, the 25 cents for residential LPG tariffs, and much more than the 2 cents for solar. Operation and maintenance costs have not been taken into account.
Since then, it has been revealed to the public, without any documentary study details, that China Railway Group Limited will build, own, operate and transfer (BOOT) the AFHP at no cost to Guyana, except for 7,737 US cents per kWh that LPG will pay for 20 years. This means that if we get the full power of 165 MW from AFHP over 20 years, we should receive 29 TWh (terawatt-hours) of electric power, for which LPG will have to pay US $ 2.24 billion. To access this energy, LPG will obviously have to set up a transport and distribution system (T&D). Based on the production / T & D cost ratio for a US $ 2.2 million contract for the design, supply and installation of a 150 kW hydropower plant on the Chiung River, Kato village, in region eight, signed by the APNU / AFC government in September 2019, T&D would cost LPG an additional US $ 3.8 billion (not the few hundred million US $ they seem to be considering) or US $ 6 billion for 165 MW power. This comes down to 21 US cents per kWh, more than the 15 cents the government tells us we will have to pay, but far less than the 38 cents I calculated before this new revelation was released. 38 – 21 = 17 US cents per kWh is a huge difference, but it’s not my job to account for it by guessing how the government is playing with our future. It is up to the government to provide the information requested by the citizens, who without knowing the financing conditions (and other concessions?) Must make assumptions about the interest rate and the payback period. That the Government publicly disclose the financing conditions.
We have good reasons to ask our respective governments. The Burnham-Hoyte governments, which were forced on us by rigged elections, also imposed a 10-year audit backlog on us. Omai Gold Mines Ltd was unable to report any profits as governments had no audits on the amount of gold produced, just as oil companies are now getting away with unaudited project costs and their initially secret production-sharing agreement, which our governments and the oil companies say is not supposed to be renegotiated. We were told that the Skeldon Sugar Modernization Project (SSMP) was a turnkey business, but the economies of scale ultimately could not be achieved by the improved technology. It was a good idea, but young Mr. Jagdeo didn’t understand what was required, and it didn’t help that successive agriculture ministers had kept me away, a sugar technologist very qualified. Now the country must repay the US $ 200 million to China for the SSMP. This could explain the many concessions to Chinese companies, and why, for example, the current Minister of Agriculture unilaterally increased the number of Seabob trawlers in contrast to the (International) Maritime Stewardship Council certification limiting the number of trawlers.
The most obvious reason for the lack of audits is that there is great corruption to be hidden. How else to explain the difference of US $ 92 million between what ExxonMobil told its shareholders and what was presented to us as pre-contractual costs? This is why this audit and others of even more massive sums are imperative. Therefore, the calculations behind the revelation of the price of US $ 0.07737 of AFHP electric power per kWh must be presented. It has 4 significant digits, so this degree of precision must be seen! The next question is performance. If a contractor defaults, the government must implement contractual remedies. But what if the contract is comparable in cost to the country’s budget or even higher, as some of those big contracts are? Can the terms of these contracts be inspected by the public before they are signed? Can we dwell on the performance of Chinese and American companies performing big contracts, like the way the president recently denounced local entrepreneurs to the ACCC? What recourse is there in the event of default? Or do we think we can get reparations and damages from the courts in the United States and China?
Vehicles often park (illegally in municipal markets) near roadside stalls to do their shopping at the convenience of drivers. I once observed two porters struggling to pass between the narrow space between a large vehicle (polluting the air with the engine running to maintain its air conditioning) and the Bourda market stall in front of which it was parked. This is my parable of the elephant in the room. The drivers are the exploiters. They park without consideration or tax to get what they want in the easiest way possible. Their vehicles take away the goods after polluting the environment. The sellers are our politicians, their families and friends, who scramble to serve the exploiters, sometimes oblivious to the traffic jams they create, as long as they can get the sale. Most pitiful of all are the porters who represent the Guyanese people who are struggling to make ends meet in a cost of living space shrunk by government employers and foreign exploiters. So let’s stop fighting against each other and fight together against the collusion of governments and exploiters against us.
Think Engine Institute & Energy Services