By Ralph SeeramA few years ago the U.S. Government implemented a law forcing banks to disclose to borrowers the true cost of loans they are taking out. It is called The Truth in Lending Act. Banks and mortgage brokers hated this because the borrowers would realize in most cases they will be repaying twice the amount borrowed.I did some work as a closing agent for banks, and I can tell you that 90% of the time the mortgage broker never attend the signing of the loan documents. They were embarrassed when I would have to disclose to the borrower how much money that has to be repaid. For instance if you borrow $100,000 for 20 years at 8.5% interest you end up paying $164,000 in interest plus the $100,000 making it a total of $264,000 that you repay. It was the bank?s little secret.I mention the above because I was reading various reports on the Amaila Falls Hydro Electro project, and it is my firm belief that this project should come to a ?dead halt? NOW. There are quite a few things not right about this project. To be honest there is something ?fishy?; this contract has the stench of a fish market and the opposition needs to take a strong stand and bring this project to a halt.Not only is it too much money,[url=http://www.nfljerseyschinaauthentic.us]Cheap NFL Jerseys China[/url], but the way I see it, Guyanese in the near future will be saddled with a serious debt problem, the likes of which can bankrupt the country. This project is too big to continue with so many unanswered questions.One of the main benefits of the PPP losing its majority in Parliament is that most of those secret backdoor contracts are now ?seeing the light?. Had the PPP won Parliament it would have rammed these contracts ?down the throat of Guyanese taxpayers?. Thank God the opposition can to an extent bring a halt to this.Let me state that I am no economist,[url=http://www.cheapjerseysauthenticonline.us@#$%&/]Jerseys China Wholesale[/url], but I know a thing or two about mortgages and amortization of loans. I even had a mortgage broker licence at one time.So let?s look at the financing of the Amaila Falls project, and I am assuming the loans are being amortized. My understanding is the Government is borrowing US$500M. I don?t care about the technicalities and accounting trickery,[url=http://www.cheapjerseysshare.us@#$%&/]NFL Jerseys Authentic[/url], it is the Amaila Falls Hydro Inc. borrowing and GPL paying that I am concerned about. At the end of the day it is the Guyana Government that is going to GUARANTEE the payment no matter ?how you twist and turn it?So they are borrowing US$500 million at the outrageous interest rate of 8.5% amortized over 20 years. Do you know how much is the interest to be repaid over 20 years? It?s over US$541 million plus repaying the principal or US$500 million so the repayment will be over a BILLION dollars. By the 15th year,[url=http://www.chinanfljerseysauthentic.us@#$%&/]Cheap NFL Jerseys China[/url], GPL would have repaid the US$500M in interest and still owe US$200M.In today?s financial markets 8.5% is really at the high end. Kaieteur News has already showed where loans for similar projects were made at less than half of the 8.5%, some made by the very China Exim Bank.The bleeding of the GPL doesn?t stop there. There are the investment returns for Sithe Global. Reports say Sithe Global is going to get a whopping 19% return on its investment of US$157M. Do you know that Sithe Global is going to get its US$157M in less than six years, and if it has to be paid for 20 years, it will have a return of US$453M in interest on its investment of US$157M. Put another way, it will receive a total of over US$600M.Now tell me who are the idiots that agree to this type of financing? Maybe they are not idiots; maybe the ?goody bag? was passed around and everybody got a ?piece of the action?, a piece of the pie.Brian Kubeck of Sithe Global really thinks Guyanese are ?jackasses? to tell them that the company needs 19% return because it is taking the risks. GPL and the Guyanese taxpayers and electricity consumers are at risk here. They have to repay the loan. Besides, insurers take care of risks.Another thing that puzzles me is how come Guyanese have to pay the bulk of the loan and Sithe Global has a 60% share? Why create a middle company, why not the Guyana government or GPL taken the loan directly, making them the majority shareholder, maybe Christopher and Anand can explain this.Here is the deal; nobody is against hydroelectricity, even critics of the government. What everyone wants is to ensure Guyanese get the best deal possible. This present contract seems to point in the opposite way. It has been pointed out in this newspaper that the cost per megawatt is twice the average cost.The way I see it that overpriced projected cost of US$858 M is going to balloon to twice as much, to over US$1.6 BILLION, and I have not even included associated costs that go with loans like lenders fees and insurance costs. If people think electricity rates will go down, they will have a surprise. GPL will have to fork out nearly US$7M a month to service those loans,[url=http://www.nfljerseyschinaauthentic.us/]Wholesale Jerseys From China[/url], not counting other overhead costs.It may have missed me, but I have not seen any analysis on projected revenues to cover GPL expenses, service the loans and provide cheap electricity.Another smelly aspect of this contract is the supply of labour and materials. Any person with ?commonsense? will tell you those bullet points on the subject are vague and are escape clauses rather than enforcement with penalty.For instance ?use reasonable efforts to use materials produced in Guyana etc.? should have been written, SHALL use materials produced etc. etc; same for hiring Guyanese workers, instead of ?use reasonable efforts to hire individuals who are Guyanese etc. etc., it should read ?SHALL hire individuals who are Guyanese etc. etc. and the list goes on. The nonsense that happened at the Marriott Hotel must not be repeated either at the new Timehri Airport or the Amaila Falls project.If the government fails to protect the rights of Guyanese workers I can foresee serious industrial actions from Guyanese workers. I have not even gotten into if those Chinese foreign workers will pay tax and NIS.By the way, anybody out there knows if those Chinese workers at the Marriott are paying their NIS and P.A.Y.E. contributions? Just asking. Can someone in Government tell the Guyanese taxpayers?This Amaila Falls project is a national project; the success or failure would affect Guyanese if it transcends the PPP, APNU or AFC. It is time for the PPP government to realize that this contract as it stands is not in the best interest of Guyanese. It is time to reexamine the contract and financing, it is time for the PPP government to realize that at this stage it is not about showing the opposition the contract at this late stage, it?s about getting consensus from all the various experts, be it Anand Goolsarran, Christopher Ram, Clive Thomas, Janette Bulkan, ( I know the PPP sees them as critics but they still have a contribution to make) various stakeholders and international experts,[url=http://www.cheapjerseysnear.us@#$%&/]cheap nfl jerseys[/url], to satisfy the taxpayers that they will value for their hard earned money.It is time for a truly independent body to review the entire project. If the PPP goes ahead with this project as it is I can foresee serious legal actions to stop the project, the opposition parties would be justified in taking such actions on behalf of the Guyanese taxpayers.Ralph Seeram can be reached at email: [email protected]