WHERE IS THE MONEY COMING FROM?

Nov 16, 2013 Features / Columnists, Peeping Tom

Thirty million Uncle Sam dollars or six billion Guyana dollars is a lot of bread. Even for massive multinational corporations whose profits dwarf the gross domestic products of small countries, such a sum would not be invested anywhere without the approval of the power men in the Boardroom.
The reason why Board approval would normally be necessary for such a relatively small investment is because of the principle of accountability. The Board of Directors of a major multinational corporation knows that a bad investment anywhere can hurt the image of the institution and therefore they would wish to approve of even such a small investment, relative to their overall worth.
Thirty million US dollars or six billion Guyana dollars is a lot of money for any company, much less one that is not listed on the worldwide web and about which not much is known. Thirty million US dollars or six billion Guyana dollars is a lot of bread for a company which has only recently been incorporated in Guyana.
Imagine then reading a report in the newspapers which suggests that for an investment of that sum that is being put into a waste recycling plant in Guyana, fifteen million US dollars will come from one person and another person will put up another fifteen million dollars.
Now where is this money coming from? This is a legitimate question that needs to be asked of all investors coming to Guyana? In fact, one of the first tasks of due diligence on any investor is to establish the source of the funds that will be invested. No government wants to enter into an arrangement with any investor, only to find that the promised funds for the investment are not forthcoming or are from a suspicious source. This can place the entire project which the investment is expected to fund in jeopardy.
The Ministry of Local Government recently signed a MOU with a firm in which the proposed investment is supposed to be thirty million dollars. The media has every right to demand answers as to the reputation of the contractor and the source of the funding.
Guyana has had a terrible experience with a foreign firm which was contracted to build a major access road to the site of a hydroelectric facility which was to be constructed.
When the contract was first awarded this newspaper did an investigative piece and discovered that the company was operating out of a small puja job in Florida.
Questions were also immediately raised about the experience and expertise of the contractor. These concerns were never adequately addressed and the result is now history. After advancing billions of dollars to the contractor, the contract had to be terminated and billions more had to be spent to proceed with its completion. It is still not complete.
It is therefore a fair and legitimate question for the government to be asked as to the source of the fifteen million dollars each that the proposed investors will be putting up for the waste recycling plant in Guyana. Where is the money coming from?
That is what the public is entitled to know. Will it be borrowed from the local commercial banks, or will it be borrowed from foreign banks. If so who are these banks and what commitments have been provided by these banks that would have allowed the Ministry of Local Government to proceed with the issuance of a Memorandum of Understanding.
If the funds are being borrowed, one would expect that there will be some equity involved. After all, most banks would expect the borrowers to put up some of their own funds before lending such a large sum. So what is the equity contribution of the two investors that it is said will be injecting some fifteen million United States dollars into this project?
Or will two corporations be advancing the sums to be invested. If so what are the names of these corporations?
The public needs to know the answers to these questions.

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