…Kato Hydropower Project among those affected
Seven years after the Government of Guyana and the Inter-American Development Bank agreed to a US$6.250M programme to promote the use of Renewable Energy Technology in urban and hinterland areas, the programme is yet to be fully materialised, having faced a plethora of challenges.
The Auditor General Deodat Sharma, in his Report on the Pubic Accounts of Guyana for Year 2019, said the programme involves the procurement and installation of photovoltaic systems in hinterland and coastal locations such as Yarakita, Hotoquai, Akawini, Bethany, Kabakaburi, Monkey Mountain and Achiwib; and the construction of a hydropower scheme at Kato.
Initially, the programme was expected to be fully rolled out within 66-months of signing the agreement, however, as of December 2019, 72-months after, only US$1.802M of the proceeds were used.
“The sum spent represented approximately twenty-nine percent of the estimated cost. Furthermore, only one activity was completed as planned during 2019. That is, the finalisation of ongoing 2018 public awareness campaigns,” the Auditor General pointed out.
The Ministry of Public Infrastructure said the programme had experienced significant delays due to a number of challenges. “Two of the largest projects (the Kato hydro project and the solar PV micro-grids projects) represents about 60% of the programme budget; which were significantly delayed due to: (i) difficulty faced with getting key stakeholders to agree on the hinterland communities that would have benefitted from the installation of the solar PV micro-grids project; (ii) the difficulty in securing a viable bid for the development of Kato hydropower scheme – a viable bid was only received after multiple procurement processes; and (iii) acceptable bid for the hydropower development, along with suitable bids for related projects, exceeded the respective budgets and additional funding had to be sought, causing further delays,” the Public Infrastructure Ministry explained.
It noted too that installation of the wind measuring equipment had suffered protracted delays as a result of difficulty in establishing a letter of credit as required by the contract to pay the equipment supplier. This, the Public Infrastructure Ministry said, resulted in the contract being amended to reflect a more convenient payment method.
Further amendments were made to the contract to change the equipment specifications as some devices were no longer being manufactured following the delay in arriving at a suitable payment method.
“Vandalism of the first wind measuring station that was installed, requiring additional resources to restore the equipment and operations; and land ownership issues with the places identified as having high potential for wind energy, with most of the land being under private ownership,” were among other issues face, the Ministry said.
At the time of the report, the Ministry said the issue of suitable land for the installation of the three remaining wind measuring stations was being discussed with the Guyana Lands and Survey. To ensure that the programme still achieve its objects, the timeline was extended by two years. It is now due to be completed in December 2021.
The 2018 Renewable Energy Improvement – Power System Project, which was funded by the Government of Guyana and the Japan International Cooperation Agency (JICA), has also faced significant delays.
The project is intended to improve efficiency of the power system by enhancing sub-station equipment and distribution lines in the City of Georgetown and surrounding areas. Further, it is intended to result in the installation of a solar photovoltaic System and Energy Management System at the Caribbean Community (CARICOM) Secretariat Headquarters. The total estimated cost of the programme is US$17.24M.
“The sum of $1.0 billion was allotted for: (a) enhancing of sub-station equipment and distribution lines at Canefield, Onverwagt, Good Hope and Sophia; and (b) provision for photovoltaic and energy management systems for CARICOM Secretariat. The sum of $565.134M was expended, leaving the sum of $434.866M unspent. The unspent sum represented approximately forty-three percent of the approved allotment. It should be noted that the $100M allotted in 2018 was also not spent,” the Auditor General observed.
In response, the Public Infrastructure Ministry explained that a total of $1B was allocated in 2019 for works under three contracts. “This amount included the G$107.57M advance payment for the consultant that was allotted in 2018. However, the disbursement was not completed in 2018 due to delays in processing the payment request by JICA. The disbursement was completed on 18 January 2019,” the ministry explained.
It added: “Disbursements of $434.87M for 2019 representing disbursement to the contractor, the Consortium of Mitsubishi Corporation and Takaoka Engineering Company, for the shipment of 69KV capacitors for the reactive power compensator equipment for GPL was not completed in December 2019 as per original schedule. The shipment was completed on 27 December 2019 instead of 15 November 2019. Hence, the submission and processing of payment was delayed, with the payment being completed on 20 February 2020.”
The Ministry was keen on noting that even though the amount was not paid in 2019 as per allocation, it had no impact on the completion date of June 30, 2020 for the GPL component. Similarly, it said the delay in the disbursement had no impact on the CARICOM component which was scheduled to be completed by 30 September 2020.
However, the Minister was keen on noting that the project completion deadlines of 30 June 2020 and 30 September 2020 will not be achieved since the equipment installation works on the project was temporarily suspended on 30 April 2020 due to the COVID-19 pandemic.
