Housing Ministry silent on reason for GGMC $3B loan

…speculation rife that it’s for election campaign

The recently signed $3B Loan Agreement between the Guyana Geology and Mines Commission (GGMC) and the Central Housing and Planning Authority (CH&PA) seems to be a mere smokescreen.

Chairman of GGMC’s Board, Clinton Williams

Reliable sources have confirmed to Kaieteur News that this money is part of a deal at this point, to help fund government’s election campaign which is expected to step up pace in the coming weeks. Negotiations are even expected to benefit some GGMC Board members and employees. One official said that this is the first time the Commission has entered into a loan agreement with any state agency and it is “abnormal” for such to occur. This publication was also informed that this move, especially leading up to the May 11 election has sparked some amount of controversy among staffers at the Commission. GGMC employees for several weeks had been picketing the Commission demanding the approval for the negotiated increases in salaries and wages. Only last week, an agreement was met and strikes were called off. Workers who spoke with Kaieteur News yesterday morning said that they find it absolutely “absurd, disrespectful, in fact a slap in the face, that they can all of a sudden agree to approve monies for some Housing project when only the other day, it took them so long just to increase our wages and salaries.” “We are the ones who have been here with them for several years but they hesitate and want to hold a set of discussions. We know very well that money is not just for any housing project. We aren’t stupid,” one senior staffer articulated. Meanwhile, the source said that such a substantial amount of money should not have been given to the agency. But it is the GGMC Board of Directors that is responsible for making decisions regarding policies and how monies are approved, dispersed and expended. The source said, too, that Board member Patrick Harding was not in agreement with the Loan and that it was the Chairman, Clinton Williams who pushed for it to be approved. Calls to Williams yesterday did not prove to be too helpful as he informed this newspaper that he is not in a position to answer any question regarding the loan. Other officials at GGMC also told Kaieteur News that they expressed to the Chairman that they were disappointed in the decision made by the Board. They felt that by such an action, Williams invariably placed his credibility on the line. Another reliable source who was also part of the Loan Agreement deal said that while some members of the Opposition questioned whether the arrangement was illegal or not, it would not have been allowed to go through if its legal department thought otherwise. “It does not contradict our laws,” the official added. The Official said too, “Cabinet has taken monies from the Commission’s coffers before. This is not the first time. There have been many other occasions but you have to consider the makeup of the Board. There are some private persons and then there are those who represent government agencies such as Forestry and Natural Resources but even if one person objects, it is dependent whether most of them agree. And of course, who objects when the government passes on an instruction for x amount of monies to be given to wherever?” The official was then asked about claims that Harding had objected to the deal but the source declined to comment on that matter. The source nonetheless emphasized that the Board was “excited” to jump on the Loan Agreement because the interest rate of five percent “is a sweet deal. Even the Banks don’t offer that.” Based on investigations, Kaieteur News discovered that GGMC is also trying to negotiate some lands for employees of the entity. On Thursday, the Commission 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 will 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.