Introduction
The US$15 million contract to Synergy Holdings Inc. for the first phase of the Amaila Falls Hydro-electric Power Project (AFHEP) has drawn intense scrutiny from the two independent dailies. It is difficult to say which element of the award of the contract is – to borrow a word from Dr Roger Luncheon – more ‘sinister,’ the method and the vehicle used by the government first to direct and then defend the contract to the awardee, or the attempt by the awardee to mask its incredible incapacity to perform such a contract. There is big money involved, if not from this phase of the project, then later from the real prize, the construction of the hydro-power plant with a price tag of several hundreds of millions of US dollars.
The characters in this extravagant saga make an interesting cast with the lead role being played by the versatile and ubiquitous National Industrial and Commercial Investments Ltd (NICIL), a company that has been at the centre of almost every questionable big ticket transaction undertaken by the government. NICIL is described as the government’s shareholding arm, but it has an unholy alliance with the government’s privatisation arm called the Privatisation Unit, with which it shares a common CEO, Mr Winston Brassington. Behind or – depending on the way one looks at it – in front of NICIL is a politically studded board of ministers and government insiders headed by the Minister of Finance Dr Ashni Singh. NICIL’s corporate secretary is attorney-at-law Ms Marcia Nadir-Sharma. And on the other side is a man whose incredible talent for self-promotion deserves its own Oscar and whose major assets are his political connections and his determination.
Silence not synergy
The storyline is one of intrigue on a Machiavellian scale. The two lead actors both play more than one role. One President appears literally out of the Caribbean Airlines sky to tell us that hydro will allow us within the next three years to use only renewable energy in the production of electricity. The other president assures us that Guyanese will soon be paying for electricity half of what we now pay to the Guyana Power and Light Inc and later, our electricity rates will be the cheapest in the world, a claim which even a professional propagandist might not feel comfortable making.
There is a fair cast of naysayers, their warnings muffled by the intense propaganda, while several members of the Low Carbon Development Strategy (LCDS) cast have taken time-out. With hydro-electricity being the centrepiece of the LCDS, one might expect them to be more vocal, to consult and to convince. Yet, not a single voice has been heard from this amorphous group that plays its part in the chorus line. Silence is not synergy.
The many-headed hydra
Every time Guyana believes that it is closing in on one set of improprieties another raises its head – or the impropriety is legalised. The Synergy deal – in the most common sense of the word – shows that impropriety has more heads than a hydra, more tentacles than the octopus. For years, accounting for and spending of the Lotto funds has been an obsession of the Audit Office. A few years ago there was the infamous Queens Atlantic Investment Inc privatisation and concessions, followed by the single sourcing of drugs from the President’s friends.
Then last year it was Clico from which some benefited despite incompetence, improper conduct and possible illegalities. In the case of Synergy, as in its purchase of hundreds of millions worth of drugs from India, the government uses a middleman, a friend of the President. Except that in the case of Synergy, there was a supposedly independent tender process.
Not only was the Amaila contract process flawed, it was in breach of the Procurement Act, subliminally confirmed by Head of the Presidential Secretariat Dr Roger Luncheon who said that the contract was awarded via a competitive bidding process within the specified guidelines.
And guess who specified those guidelines? Dr Luncheon’s famous circumlocution is often regarded as no more than a cause for humour but it always masks some serious truths. He did not tell the nation that the contract was awarded under the Procurement Act; he said that the award of the contract to Synergy Holdings was made via a public tender done within the provisions of the Act. What he does not say is that the administration of a government tender has specific rules that would not allow a private company like NICIL to be engaged in the tender process.
The absent opposition
That raises questions about another no-show in the whole saga: the political opposition, the whole lot of them. Belatedly, the PNCR has announced that it is calling on the government to submit all proposals connected with the project to the National Assembly to ensure proper accountability and transparency. That party must enjoy being insulted and embarrassed for it must know that a mere call on the Jagdeo government is insufficient to bring about any results. A call is the easiest thing to make – all words, little effort and no action.
Such calls should be left to individual citizens with no other practical options. It is more than three weeks since I called on the parliamentary opposition and the people of Guyana to demand an enquiry into the award of the contract to Synergy, and for it to be stopped.
It has been left to individuals and the press – described by President Jagdeo as the new opposition – to do the investigations and the hard work of exposing the illegalities and improprieties, which may or may not add up to corruption.
The AFC and GAP-Roar seem to have been incapacitated into silence, learning nothing from Mr Motilall, that incapacity in Guyana is not an impediment.
Civil society, including the professionals and their bodies, has been paralysed by fear of their own shadow and apprehension about the response.
We have been reassured about Synergy’s credibility not due to its President and CEO, but the role of Sithe Global Power LLC which is described in the Request for Proposal as the Project Manager and in a joint press statement issued on April 5, 2010 by the Ministry of Finance as the project sponsor, which I assume is something like a godfather. Not only can both descriptions not be right but there are significant legal, operational and financial implications between them that need clarification.
‘Bigging up’ Sithe
That false description perhaps stems from what may be an attempt to ‘big up’ Sithe Global Power, LLC to compensate for Synergy’s demonstrated incapacity to execute any but the most insignificant contract. It is convenient, but misleading to tout Sithe as the project sponsor of Uganda’s Bujagali Hydro-power project when in fact the sponsors are Industrial Promotion Services (Kenya) Limited and SG Bujagali Holdings Ltd, an affiliate of Sithe. This information is readily available to our professional associations which could have at least checked on Sithe and the Bujagali project which has run into all kinds of technical, financial, environmental problems.
Through the pivotal role of Uganda’s National Association of Professional Environmentalists, within months of the World Bank’s January 2008 announcement of financial closure, an Inspection Panel appointed by the Bank concluded, following a 17-month investigation, that the benefits of the Bujagali project had been overstated and its risks understated.
That could easily be the case of Amaila where the decider-in-chief President Jagdeo displays an amazing naiveté on technical issues and appears to be misled by the most simplistic numbers on complex issues. He accepted McKinsey’s calculation that our forests are worth US$580 million per year and has so far not challenged Synergy’s numbers on the price at which it would sell power to the Guyana Power and Light.
The Public Utilities Commission
And here is where another interest comes in – the Public Utilities Commission (PUC). Is it aware of a long term Power Purchase Agreement under which GPL will take all of the energy generated by Amaila, or of an ‘Assignment of Receivables Agreement,’ which ensures the payment via pass-through payment from end use customers? Electricity tariffs come within the purview of the PUC and it would therefore have been incumbent on that body to satisfy itself that Winston Brassington, Chairman of GPL was not a party to or exerted any influence on the negotiations leading to those agreements, that they were properly made and that all the implications for rate-setting have been addressed.
Like Bujagali, failure to rigorously evaluate the Amaila project can spell a major financial disaster which the citizens of the country will have to bear long after Motilall and the politicians have departed Guyana.
It is not something that we can address only after it has happened. It will be Guyana’s mess, obligations and burden. It cannot wait.
To be continued