Lower Cost Of Bujagali, AES Told
Apr 21, 2003
THE Government has asked a multi-national American company to reduce the cost of building the proposed 250-megawatt Bujagali hydro electric power plant from the initial $520m.
By Yunusu Abbey
THE Government has asked a multi-national American company to reduce the cost of building the proposed 250-megawatt Bujagali hydro electric power plant from the initial $520m.
AES Corporation, whose locally registered subsidiary, AES Nile Power will undertake the project, had estimated the Bujagali dam to cost about $520m.
However, yesterday, Syda Bbumba, the energy and mineral development minister, said she had in a recent letter to the AES Chief Executive Officer in Washington DC, Paul Hanrahan, demanded that the US company cuts down the project cost.
“In the letter, which I wrote on the Government’s behalf, I emphasised that with the availability of new technology for hydro electric power, AES has to revise the cost of the project from the original $520m, which was rather high,†Bbumba said.
“Since AES is going to hold fresh negotiations with the contractors, we expect them to reduce the cost,†she said.
Speaking to The New Vision on telephone, Bbumba said she had been told that on April 17, Hanrahan met World Bank President James Wolfenshon in Washington DC over the Bujagali project.
The project had delayed due to a probe by the US Department of Justice, which was investigating corruption allegations against a Norwegian firm (Viedekke International AS). AES had contracted the firm to build the dam. The Department has now given the project a go-ahead.
“They (AES and World Bank) hope to reach the ‘wet financial closure stage’ (issuing out cheques for the project) within the next few months,†Bbumba said.
She said AES directors had raised $60m to fill a shortfall the project had been facing.
Before the saga started, AES had contracted a consortium of five international companies to build the dam.
However, some environmental groups and local politicians had opposed the project on grounds that it would endanger the environment and was not cost effective.
Ends
THE Government has asked a multi-national American company to reduce the cost of building the proposed 250-megawatt Bujagali hydro electric power plant from the initial $520m.
AES Corporation, whose locally registered subsidiary, AES Nile Power will undertake the project, had estimated the Bujagali dam to cost about $520m.
However, yesterday, Syda Bbumba, the energy and mineral development minister, said she had in a recent letter to the AES Chief Executive Officer in Washington DC, Paul Hanrahan, demanded that the US company cuts down the project cost.
“In the letter, which I wrote on the Government’s behalf, I emphasised that with the availability of new technology for hydro electric power, AES has to revise the cost of the project from the original $520m, which was rather high,†Bbumba said.
“Since AES is going to hold fresh negotiations with the contractors, we expect them to reduce the cost,†she said.
Speaking to The New Vision on telephone, Bbumba said she had been told that on April 17, Hanrahan met World Bank President James Wolfenshon in Washington DC over the Bujagali project.
The project had delayed due to a probe by the US Department of Justice, which was investigating corruption allegations against a Norwegian firm (Viedekke International AS). AES had contracted the firm to build the dam. The Department has now given the project a go-ahead.
“They (AES and World Bank) hope to reach the ‘wet financial closure stage’ (issuing out cheques for the project) within the next few months,†Bbumba said.
She said AES directors had raised $60m to fill a shortfall the project had been facing.
Before the saga started, AES had contracted a consortium of five international companies to build the dam.
However, some environmental groups and local politicians had opposed the project on grounds that it would endanger the environment and was not cost effective.
Ends