President says…

Opposition’s ‘hold-down-slow-down’ tactics not lost on foreign investors
–that‘there’s a lot of sympathy being shown us at this point in time’

PRESIDENT Donald Ramotar contends that the Parliamentary opposition parties’ cut of $37.4B from the 2014 Budget last week is mind boggling, considering the impact of the allocations on the socio-economic development of the Guyanese people, and the nation as a whole.

Spotlighting the negative signals being sent to investors, President Ramotar said: “There is a lot of sympathy being shown to us at this point in time from many of these investors, in recognizing the efforts that are being made to hold down and slow down development (by the Opposition).”
The Head of State noted that while his Government continues to engage investors to request their understanding, the current administration remains committed to ensuring development of the Guyanese people, and by extension Guyana.
Several investors have pulled out of local ventures because of the political hullaballoo and its diverse impact on the investment climate.
In January, Muri Brasil Ventures stated that misinformation, prejudice and hostility were the key factors in their decision to scrap a local investment venture. The company will no longer pursue its geographical and geophysical survey under the Permission for Geographical and Geophysical Survey (PGGS) in the New River Triangle area, which was granted by the Guyana Geology and Mines Commission (GGMC).
Muri Brasil Ventures, in a statement, said: “Although the process was legal and transparent, this decision is due to the misinformation, prejudice and hostility to this proposed survey by persons and agencies which are fostering an adverse investment climate in Guyana.”
That decision, made on December 30, 2013, makes the company the latest major investor Guyana has lost. However, the Head of State stressed that Government will do all it can to continue to encourage investors.
“Our country is open to investment, local and foreign, so that we can improve our capacity; so we can expand on the goods and services that we give to our people,” Ramotar stressed.
Of recent, the major transformational projects that have been the source of much disagreement between the Government and the Opposition parties include: The Amaila Falls Hydro-power Project (AFHP), the Specialty Hospital, and the Cheddi Jagan International Airport (CJIA) Expansion project.
Over the last three years, under President Ramotar’s term in office, the parties have flip-flopped with their support of these projects.

SUPPORT FOR HYDRO
In the 2014 Budget considerations, both parties supported the allocation of $1.3B for the provision of the Amaila access road and related structures under the Ministry of Public Works’ 2014 budgetary allocation.
However, the $16.8B for the actual project, which was listed under the Ministry of Finance’s 2014 allocation, was disapproved by the parties.
The project involves construction of a hydropower plant in the area of west-central Guyana, where the Amaila and Kuribrong rivers meet. Electricity produced at the plant will be delivered to Guyana’s capital, Georgetown, and its second largest town, Linden. The AFHP is expected to result in substantial savings to the nation’s coffers, particularly in terms of foreign exchange and the purchase of heavy fuel oil.
The potential benefits of a more stable and reliable source of energy via the advancement of hydro-electricity has, last December, been spotlighted by the International Monetary Fund (IMF) as an area for continued focus.
President Ramotar’s position on the matter is that economies must serve the people, not vice versa; and with an expected saving of $9B in electricity subsidies, as well as savings on the $40B fuel bill, enormous contributions can be made to the infrastructural development, particularly needed in Guyana’s hinterland to aid and accelerate economic progress.
On July 18 last year, the combined opposition defeated the Hydro Electric Power (Amendment) Bill.
In August, the Government brought the issue back to the National Assembly and received the support of the Alliance For Change (AFC), but A Partnership for National Unity (APNU) voted the bill and motion down.

CONTRACTS INKED
This year, $910M budgeted for the design, construction and equipping of the Specialty Hospital under the Regional and Clinical Services budget of the Ministry of Education were voted down.
However, at the commencement of the 10th Parliament, the House approved allocations for the project, which resulted in the Government entering legally binding contracts for which mobilisation advances were already paid.
A 12-month contract has already been inked with consultant VIKAB Engineering Consultants Limited and contractor Surendra Engineering Corporation Limited.
To date, the consultant has been paid some $34.4M and the contractor was paid $878.5M. The structural designs for the project have been completed, while the architectural designs are currently being reviewed.
On site, physical progress has been seen on the essential site preparation, which is some 75 per cent completed. On the building’s foundations, 361 piles have been supplied and 235 piles have been driven. Works are continuing.
The Specialty Hospital was expected to deliver enhanced specialised health services to the Guyanese nation, offer reduced cost for specialised surgical interventions, and promote a healthier population.
The project also features some scope for health tourism.

POSSIBLE PENALITES
The Government now faces a similar challenge with the CJIA works as with the Specialty Hospital, since contracts have already been inked and entered into, with monies already advanced to contractors.
Guyana may lose the US$20.7M already invested in the project, and could face further penalties if the project experiences more delays and there is a breach of the contract Government has with the contractor, China Harbour Engineering Company.
The contractor has completed tests with respect to the construction of the 1,000 metres of runway lengthening. In addition, all geotechnical, geological and other engineering evaluations have been completed.
Additionally, a contract has been issued for the consulting engineers to provide oversight of the project.
The project features three components: (a) construction of a new terminal building measuring 16,000 square metres. This building will have eight passenger boarding bridges and two elevators, as well as CCTV and departure control systems. (b) Extension of the main runway by 3,500 feet to a final length of 10,500 feet, which will increase CJIA’s capacity to facilitate the landing of Boeing 747-400 aircraft; and (c) the construction of eight international parking positions.
Last year, several countries expressed interest in Guyana’s push to develop a new international airport, according to Public Works Minister Robeson Benn.
The minister led a small delegation to the 38th International Civil Aviation Organisation’s General Assembly in Montreal, Canada. Representatives from Nigeria, Indonesia and other African countries quizzed Minister Benn on the opportunities that could be derived from the project.
In-depth discussions were also held with Princess Stella Adaeze-Oduah, Nigeria’s Aviation Minister.
The project is being partially funded by a US$130M loan from China, with the rest coming from the public treasury. It is scheduled for completion in August 2015.

APPEAL
In the National Assembly last Wednesday, Finance Minister Dr. Ashni Singh appealed to Opposition MPs to be wary of the signals their positions on major developmental projects will send investors.
He pointed out that all of the developmental partners on some of the major projects have indicated that a signal of political support would be useful in convincing their own principals to move ahead with the projects.
“It is hard for Guyana to say to our partners, ‘Approve the financing for the project,’ when we in Guyana seem uncertain,” Singh said.
The minister made it clear that Government has no problem subjecting any of the major projects to any degree of scrutiny by the National Assembly.
He said, “We are happy to share any document, most of which we have done…. We are happy to provide any detail asked for. My appeal is: bear in mind the signal we send to the rest of the world.
“…there is no shortage of willingness to talk…that offer for questions to come remains open. We have no difficulty to continue discussion.
“…when this House, last year, showed even some reluctance, that signal of tentativeness lost us several months and placed the partnership in jeopardy….
“A single signal of uncertainty can derail a project and demand a Herculean effort to keep on the rails.”
Singh pointed out that it was to Guyana’s good fortune that the country was able keep its development partners engaged.
“Another signal of tentativeness would do immeasurable and irreparable harm,” he stressed.
Unfortunately, the Finance Minister’s appeal for the developmental projects not to be derailed went unheard. The combined Opposition, in the end, voted to cut the 2014 Budget by $37.4B, reducing it from $220B to $186.2B.
Last year the combined Opposition cut the Budget by $31B. In 2012, they cut it by $21B. This year’s cuts are the largest since the commencement of the 10th Parliament, and this is the third year of cuts under President Donald Ramotar’s term in office.
The Government is currently assessing its legal options, according to President Ramotar, to deal with what he has termed “unconstitutional” reductions of the 2014 Budget.

(By Vanessa Narine)

extracted from the Guyanachronicle