Blame the Government - $50 million a year and 600 new jobs on the cards

Blame the Government – $50 million a year and 600 new jobs on the cards

May 21, 2008 Peeping Tom

The government has long vowed that it would privatize businesses in keeping with the international donor agencies who said that governments that manage businesses are more than likely to subsidise them. It is not that subsidies are bad, rather it is that the money used to subsidise certain projects in poor countries comes from other taxpayers in other lands.

Privatisation is not an invention of this government. It started in Guyana in the late 1980s as part of the programme of economic recovery and it continues to this day in support of a promise by the late President Cheddi Jagan who said that his government believes in privatization and that his government would continue the programme that had been initiated by the previous administration.

Companies like Guyana Airways Corporation, Guyana National Engineering Corporation, Guyana Electricity Company and Guyana Pharmaceutical Corporation were just a few that went to private hands. This meant that the government did not have to dig into the national treasury to keep businesses afloat when either mismanagement or hard times forced them to collapse.

In each case the arrangements were made public; there were no secret deals and when concluded the government went to Parliament to explain what it had done and tabled the necessary arrangements so that the Members of Parliament could debate whether the deals were the best possible that the government could get.

Recently the government divested itself of Sanata Textiles Limited, in the process, securing one of the best agreements that it could ever get. While the company remained government property it continued to deteriorate and it was a burden on the state and taxpayers.

In 2006, the government had to fork out $20 million just to secure the premises; it had to pay millions to City Hall by way of taxes, and at the same time the assets in the compound were deteriorating because vandals were having a field day and the elements were not kind to the buildings.

Today, instead of paying millions of dollars just to say that the Sanata compound is part of the national assets, the government is going to receive $50 million each year. It no longer has to pay taxes to City Hall, pay a security company to protect what is left, and keep doing this while prime property goes to waste.
For all that it has done there are critics who feel that what has been arrived at with Queens Atlantic Investments Inc is not worth the paper on which it is written. They are not prepared to accept that before now, the government had tried to engage others.

Sanata Textiles was the result of the Chinese involvement in Guyana and they made two attempts to make a success of the entity. More recently, they decided to reinvest, but only in a part of the complex, but they then folded and left whatever investments they had put in, choosing to return the compound to government.
The government cast its net far and wide but there were no takers. It placed an advertisement in the major newspapers and ran that advertisement on twenty occasions, choosing to extend the deadline by a month but no one came forward until Queens Atlantic demonstrated an interest and unveiled a plan that could see the complex become one of the leading entities in the city.

Indeed the government has granted the investor concessions in keeping with the law and which are granted to every investor in this country. There are tax holidays, duty free concessions, waivers of certain customs duties and other things in keeping with what operates when an investor starts up.

This investor will spend an additional $6 billion over three years, failing which the government will recover the Sanata complex; he will employ 600 people who will all pay taxes to the public treasury and he will be producing things that this country needs but which it must now import.

Surprisingly, the criticisms are coming from a few and not from any member of the political parties because the latter knows what operated.

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Blame the Government – $50 million a year and 600 new jobs on the cards

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