A FUNERAL WITHOUT A WAKE
July 21, 2013, By KNews, Filed Under Features / Columnists, Peeping Tom, Source
The PPPC administration has signaled the death knell for the Amaila Falls Hydroelectric Project, following votes in the National Assembly last Thursday. The public, however, should be circumspect about what took place.
For one, a tied vote on one of the Bills raised eyebrows. Was it one of those chance events in history that has gifted the PPPC the opportunity to retable the said Bills during this session of parliament? Did fate deliver a lucky hand to the PPPC in that the motion for the second reading of one of the Bills was not defeated but merely not carried?
How coincidental that there was a technical objection made about one of the opposition parliamentarians not being properly in his seat when the vote was taken. As a consequence, there was a 32-32 tie.
This means this particular motion was not carried. However, since it was not defeated it can be reintroduced, that is unless someone launches a successful challenge to that possibility.
The voting down of the Hydroelectric Bill probably puts on long pause the Amaila Falls Hydrolectric Project, but this is not tantamount to a death sentence. This article is merely about the second Bill which sought to raise the debt ceiling on the country. One of the main Bills presented was about the debt ceiling of the country, which makes it relevant to all large-scale investments in which the government is expected to accrue debt above a certain sum or is required to issue guarantees above a certain level.
This Bill was about financial matters. It is true that the hydroelectric project will become the largest investment ever in Guyana, barring the one billion United States dollars which Bosai had promised to invest in the mining sector. Because the government is expected to borrow heavily for this project, it needs to increase the debt ceiling permitted under the law. This is why it went to the National Assembly with that particular Bill.
There are a host of financial regulations which place limits on what can be borrowed both by government and private citizens. These limits relate to all government borrowing, and therefore will affect not just the hydroelectric project, but any other major project in which the government is a partner.
One suspects that the opposition parties are well aware of the far- reaching consequences of their actions and therefore sought not to kill the Bill, but to merely place it in a cold storage until some concessions are wrested from the government.
Any future government will have to pass this debt ceiling Bill. They will have to pass it if they hope to have a major investment, say, a land transport link with Brazil or building a new harbour or tapping some other major waterfall for power.
The debt ceilings permissible under the laws have to be adjusted, regardless of whether there is a hydroelectric project. For one, the economy is growing, it is stronger and therefore the country is in a position to manage a higher debt ceiling on any individual project.
The opposition can hardly claim to want to bring an end to the Amaila Falls Hydroelectric Project. They have conceded their lack of technical expertise to analyze projects of this size. In fact, the AFC has indicated that it is awaiting the decision of the Inter-American Development Bank before deciding the fate of this project. They are in no hurry to rush to any decision.
The government on the other hand is saying that unless the Bill was passed, deadlines would be missed and penalties would accrue. In short, the government is saying that it is borrowing for this project from multiple sources, but because one source is endangered, it will have to pay penalties to other lenders. Now what sort of poppycock is this?
It is very much like saying that you are building a house and planning to furnish it. The money for the construction of the house will come from Bank A; the cost of furnishing the interior will come from Bank B. But because Bank B is refusing to lend the money on time, Bank A has to be paid a penalty.
Something is wrong here. This is not how anyone will arrange the financial affairs for building their home. And it should not be how it is done for the country either.
Since the opposition lacks the technical expertise to analyze some of these major projects, it should not be linking approval of the debt ceiling Bill to other legislative issues. Doing so, risks jeopardizing the future of Guyana, because there may be major problems with the contract for the hydroelectric project which need addressing.
Asking the government to either pass local government Bills or to submit its nominees for the Public Procurement Commission will not make right some of the worrying clauses that may exist in the contract for the Amaila Falls Hydroelectric Project.
A deal is needed on this project itself, rather than a deal that links approval of this project to other issues. The opposition parties may get what they want in terms of local government reform and a Public Procurement Commission, but the country could lose from a possible overpriced hydropower project which can end up burdening future generations with a heavy debt. Or there can be a highly flawed contract which does not secure the best interests of the Guyanese people.
How, for example, does linking the passage of the financial Bill to facilitate the go-ahead with the Amaila Falls Hydroelectric Project address the serious concerns about having to pay penalties to those who it is said have already committed funds to the project?
This is why if this project is considered good for Guyana, the opposition should do what the PPPC did with the Omai contract when it took office in 1992. Both sides should agree to an independent review of the contract to ensure that the project is not overpriced and that the terms of the contract are not unduly adverse to Guyana’s best interest.
This is the sort of deal that is needed. Not the silent treatment!
