The President’s announcement that the US$15 million contract for the access roads to the Amalia Falls, in preparation for the construction of the hydro power facility, has long been awaited. It comes after years of effort by Synergy Holdings and creative assistance by President Jagdeo in encouraging Synergy and in assisting to secure the financing. This expenditure alone, a small part of the US$450 million project, will create many, much needed jobs.
Synergy Holdings has been doggedly persistent. Even when oil prices were too low to make hydro an attractive alternative to oil, it never gave up. Now that all the circumstances have come together – confidence in the economy, high oil prices, support from the international banking community and, of critical importance, President Jagdeo’s support – Synergy’s confidence in the ultimate acceptance of its proposal has paid off, for the company and shareholders no doubt, but big time for Guyana.
The state owned Guyana Electricity Corporation collapsed in about 1975 because of lack of investment, dilapidated equipment and mismanagement. The long periods of electricity outage continued without relief until the PPP/C assumed office in 1992 when new Wartsila plants were purchased and installed. An entire generation of Guyanese grew up with blackouts as part of life. The promise by the PNC in 1985 that it will ‘lite up the lite with Desmond Hite’ never materialized.
An improved supply of electricity brought much needed relief to consumers. In the meantime many businesses, large and small, unable to rely on the erratic supply of electricity, purchased their own generators at great cost resulting in severely reduced profit margins and less resources to reinvest and expand.
The PPP/C’s efforts to restore the supply of electricity at reasonable cost has been frustrating. Pressured to privatize in order to obtain the much needed loans to invest in refurbishing the equipment of the Corporation, the Government eventually succumbed after one major attempt failed. The privatization deal fell apart, however, because the profit margin demanded by the new owners could not be sustained after oil prices began to rise. They abandoned GPL and the Government had to again bail out the company. The real problem is that GPL needs vast investment which Government resources cannot provide together with finding at the same time $350 million a year to import fuel. Unless we move at this time to hydro, Guyana’s electricity will remain inadequate and too expensive to encourage investment in industrial production.
Guyana’s economic development has been and is being held back because of high fuel prices. The cost of electricity has been a disincentive to investment in industrial development. Cheap electricity, a major input in industrial production, is necessary for industrial development. Trinidad and Tobago’s oil wealth and cheap electricity are the two fundamental reasons why our Caricom partner is moving rapidly forward with industrialization. Guyana does not have oil (as yet) but the addition of 140 megawatts of electricity to what we already have, at competitive prices, will certainly lay the ground work for our own industrialization.
A hydro facility has been the dream of governments since the 1960s. A modest Tiger Hill hydroelectricity plant was proposed by the PPP Government at that time. In the 1970s the PNC expended a very large sum of money to construct a road leading to the site of a large facility at Mazaruni. This failed because it was too ambitious, could not attract international financial support and, allegedly, some international intrigue. Now, nearly forty years later, we are on the verge of finally laying the most important foundation for the development of our economy.
Hydro electricity will promote another dream of the two main political parties in Guyana, namely, an alumina plant to process bauxite ore which Guyana has been exporting for more than seventy five years. The colonial powers never saw it as being in Guyana’s interest, which it clearly was, to promote investment in electricity generation so as to speed up industrial development by means of an aluminium smelter which would have propelled Guyana into a noted industrial power in the region and moving Guyana forward from a primary producer which would have added great value to our bauxite
While Guyana needs hydro for its own economic development, our friends are beginning to look to Guyana to provide hydro electricity for their economic development. Brazil has shown keen interest in constructing a hydro electric facility in the Mazaruni to supply electricity to northern Brazil. This region of Brazil is currently being supplied by Venezuela from its Guri Dam plant. But the recent drought has reduced the supply of electricity from Guri Dam and Brazil is looking not only to diversify its supply but to insure against disruption. This need is going to become greater as time moves on because Brazil is poised to grow by leaps and bounds and so is its demand for cheap and clean electricity. Guyana is therefore in a position to become a substantial producer and exporter of power in the near future. This offers the prospect of massive economic development for Guyana. (www.conversationtree.gy)