Guaranteeing the best use of our tax dollars

Recently, the picture of the opposition that Government likes to paint is one of being angry, bitter, vindictive, irresponsible and irrational.  That is by no means the case, and today the AFC explains the “adjustments” it made to the 2013 National Budget.  They were based on our commitment to ensure proper scrutiny of these public funds, as well as transparency and accountability of funds spent in the preceding year.

We take this opportunity to remind everyone that at any time, with as little as six days notice to the National Assembly, these cuts can be resubmitted for reconsideration and approval. Last year this was done on a few occasions as more information was submitted to the Parliament.

THE CHEDDI JAGAN INTERNATIONAL AIRPORT
While the AFC supports all necessary upgrades to the Cheddi Jagan International Airport (CJIA), we do not fully support the modernization project.  In particular, we do not believe that a new terminal building is a high enough priority at this time to incur such a massive foreign debt. Our objections focus on the following aspects:
Our escalating national debt
Our external debt has trebled since 2007 and we are fast approaching the limit of $400B set out in Guyana’s External Loans Act.   Does the government plan to ask the National Assembly to increase this limit as required by the Act? We believe that a broad consultation should be initiated on this matter and any increase in our borrowing limits should be tied to a national development plan that prioritizes large projects over specified time periods.
The manner in which this project was conceived
We believe that a project of this magnitude should have been conceived within the context of a larger development plan in which it would have been given a level of priority consistent with that plan.  What has taken place in this case is the ballooning of the need to expand the runway which we agreed fully with, into a complete overhaul of the airport and its surroundings, including the relocation of residents and businesses.  There is no study or evidence that indicates that this is a priority even within the tourism sector, much less for the entire nation.
The contract and the loan agreement
An agreement was entered into between the Government of Guyana and the contractor that appears to be outside of our own procurement procedures.  This agreement only came to light through a press release carried in the Jamaica Observer. It is reported that a feasibility study for this project was carried out by the contractor.  $4.5Bn for this project was placed in the Budget Estimates of 2012 prior to the signing of the loan agreement and prior to the tabling of this loan agreement in the National Assembly.  The project was listed as critical and the expansion of the runway by 1000 metres was deemed to be a priority.
All projects funded by ExIm Bank of China are discriminatory in the selection of goods and services to the detriment of our own economy.
The capacity of the tourism sector
We do not feel that the country is currently in a position to realize the potential of a modern airport.  Such a project when completed would undoubtedly support the tourism sector, however this sector is yet to materialize, and is unlikely to do so without the successful implementation of a strategic plan to market Guyana internationally as a desirable destination, and also to transform it into such a destination.
In this regard, the AFC feels that the following areas of concern should be addressed in advance of any investment in a new terminal building:
·    Given the fact that the East Bank Demerara road is still a conduit for over ninety percent of the passengers using the CJIA, the priority should be to alleviate the traffic congestion on this road by investing in alternatives.
·    The state of the nation’s capital continues to deteriorate visibly from year to year.  Investments in measures to halt and reverse this trend are critical if Guyana is to be marketed as a desirable destination.
·    Public transportation in Guyana leaves a lot to be desired and will need a major upgrade if Guyana intends to venture into tourism.
Questions on the CJIA Expansion project
·    The fact that a modern airport also provides a retail experience  –  food, perfume, gadgets, banking, parking, etc.  – requires that concessions be allocated to various commercial entities.  Is there a retail management plan for the new airport?
In particular:
o    On what basis will a person or entity be chosen to manage this aspect of the airport’s operations?
o    How many retail units will be available in the new terminal building?  What is the breakdown between concessions in the departure, arrivals and landside areas?
o    What data is available to allow prospective concessionaires to evaluate the potential of taking up retail space in the new terminal?
o    On what basis will retail concessions be granted?
o    If these questions cannot be answered as yet, then when can we expect answers?
·    The relocation of residents from the surrounding area is of concern.
o    What arrangements are in place for relocation?
o    What arrangements are in place for compensation?
o    What assurances are there that lands vacated on the basis of safety concerns will not be developed for private enterprises once the residents have been relocated?

AMAILA FALLS HYDROPOWER PROJECT
The AFC has stated before and continues to support this important transformational project, and in fact approved funding for the completion of the road to the project, despite the many construction problems the road has faced.  That is testimony to our commitment.  A total of $19B was not approved at this point in time simply because the IDB, the agency conducting the final due diligence on this project, has not signed off totally on the project.
The AFC stated in parliament and publicly that once the IDB gives final approval, the funds will be approved for the project when resubmitted to the National Assembly by the Minister of Finance. Of course NCN and GINA would never report that! The AFC was most concerned that if we approved these monies they would be available for spending regardless of whether the IDB granted final approval. Please note that one billion dollars was approved for a series of development projects for Amerindian Communities.
GPL
The AFC recognizes the need to increase generating capacity to meet current and anticipated future demand.  We also recognize the need for upgrading our transmission and distribution systems. We fully support the move towards prepaid metering and the strengthening of legislation to allow for prosecution of those caught stealing electricity.
Our concerns are with GPL’s failure to meet loss reduction targets and the implications of this for the Guyanese consumers and for our economy on the whole.  We are unhappy with the fact that high compensation levels are not tied to tangible results in this regard, and we feel that Guyana cannot afford to encourage a culture of non-achievement in such an important sector.
We are concerned that the procurement process is being increasingly subverted by the terms and conditions of loan agreements hinged to Chinese contractors and equipment.
GPL has spent more than $25B over the past decade in infrastructural projects and at an ever increasing rate. It is not unreasonable for the opposition to be concerned and to seek assurances before approving more expenditure.
Questions:
1.    In the 2013 budget estimates, a total subsidy of $10,255M was proposed for GPL. We would like to know where the $8,255M of unspecified foreign funding is coming from and whether these funds have already been secured and if so, the terms and conditions of this funding. We would also like to know what precisely this part of the estimates is for since, apart from Provision for metering, plant, machinery and equipment, we see nothing new in the description of projects for this year.
2.    Has the company been meeting its loss reduction targets over the last five years? If not what NEW measures are in place to ensure that these targets are met over the next five years?
3.    What are the technical loss reduction targets for the short, medium and long-term?
4.    What is the estimated current cost to the company of its non-technical losses and what are its targets for improvement in the short, medium and long-term?
These were the concerns that guided our budget “adjustments” in the National Assembly.  The AFC remains committed to stamping out corruption and the misuse of public funds. We look forward to moving Guyana forward acknowledging that all stakeholders – the Private Sector, Government, other Political Parties and Civil Society each have an invaluable role to play. This “Guyana” belongs to ALL of Us.