(CMC, 15.Feb.2022) — The Suriname government has begun the process of ending a controversial deal for the construction here of a state-of-the-art hydrogen plant by the Danish company, Hybrid Power System Group (HPSG).
The decision to scrap the project for which an agreement was signed last March comes amidst reports that those involved in the project are said to have no experience in producing hydrogen or running such a business.
HPSG director Benny Falk and engineer Jesper Nielsen convened a press conference on March 20 last year with ministers Armand Achaibersing (Finance and Planning), Albert Ramdin (Foreign Affairs, International Business and International Cooperation) and David Abiamofo (Natural Resources) to announce the project.
When the deal was announced last year, many in society felt it was too good to be true, with the government now formally announcing the cancellation of the deal.
According to the government, it has become apparent that HPSG has “given an incorrect representation” and that the Danish company “has not and cannot fulfill basic obligations under the agreement.”
The Chandrikapersad Santokhi government said on this basis, it has declared the agreement “null and void”, and the process is underway to formally terminate the deal.
It said the details of the settlement will be handled by lawyers here.
In March 2021, an agreement was signed between Suriname and HPSG in which the company committed itself to finance and build a hydrogen power plant. Suriname also gave a guarantee to purchase of energy from the company for 25 years, amounting to US$2.4 billion.
“These people are going to take the state guarantee to shop around the world and make money and it’s the state that made this possible,” Gregory Rusland, chairman of coalition party NPS said as he criticised the project.
Speaking in Parliament, Rusland called for a review of the agreement saying that agreements to purchase electricity at an already agreed price could prove to be very disadvantageous for Suriname in the future.
The Danish publication, Danwatch, published a series of articles last year highlighting dubious cases involving the company’s executives, but the government insisted that nothing was wrong and that HPSG had already began preparations at the Breedevoort plantation where the plant was to be constructed.
President Santokhi said certain permits had already been applied for.
Finance Minister Armand Achaibersing asked by reporters on Friday whether the government had been tricked or was simply too naïve when it accepted the offer, replied “the contract includes the rights and obligations of the various parties involved.
“If one of the parties has not complied with them, the other party can say ‘we will end the deal’. And that is what happened. No, we were not naive,” said Achaibersing.
He told reporters that HPSG had to demonstrate that it had the financing in place by December 31, last year, “and they couldn’t prove it”.
The company is reported to indicated it would have invested US$1.2 billion in the construction of the plant.
It had also promised to be involved in several community development projects, including the construction of schools and government offices in rural areas. In addition, a number of buses that run on hydrogen would be donated to the government and roads would be built in the area where the hydrogen plant would be located.
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