GGMC’s $3B loan to Housing Authority is illegal – Opposition Leader

- “State funds which do not go into the Consolidated Funds could be used improperly for such a speculative matter in the housing sector.”

The recent approval of $3B by the Guyana Geology and Mines Commission (GGMC) to the Central Housing and Planning Authority (CH&AP) is already sparking a bit of controversy as political parties step up the pace for their election campaigns.

Opposition Leader, David Granger

Opposition Leader, David Granger, was very frank on the matter, yesterday, at his press conference. The politician said that he felt this approval was not only out of order but outside of the law.
He told members of the media that his understanding is that the rules governing the expenditure of GGMC’s funds are clearly defined. They are only supposed to be used for activities which can advance the work of the Commission.
Granger said too that it is outrageous that state funds which do not go into the Consolidated Funds could be used improperly for such a speculative matter in the housing sector.
He said that it is of course part of the lawlessness that usually takes place under the current administration. He hopes that the electorate will correct this on May 11 when they get the opportunity to do so.
On Thursday, GGMC, via a joint statement with the Housing Authority, indicated that a Loan Agreement on the $3B was signed.
GGMC said that the submission of an investment proposal by the CH&PA this month stated that the monies will be loaned for a period of one year and to be used for the development of the housing sector.
The Board of Directors of the Commission, it said, met and deliberated on the proposal submitted. It was noted that the interest rate being offered by CH&PA was five percent which was 3.2 percent more than what was currently being earned via the commercial banks and other investment options open to the Commission.
The parties involved articulated that the loan is for a period of one year with interest calculated using the reducing balance. In the event CH&PA fails to repay the entire amount by the deadline, the Commission has the right to increase the interest rate by seven percent.
GGMC said that at the level of the Board of Directors, it was agreed that the investment proposal was financially prudent and sound. And as such it was agreed to grant the loan subject to the terms and conditions enshrined in the Loan Agreement and any additional guarantees required by the Commission.
It claimed, also, that the CHPA project is pivotal to the realization of the Government of Guyana strategic target of allocating 30,000 lots under the Adequate and Affordable Housing Programme in order to maintain momentum in the provision of service land in several areas on the East and West Demerara.