A basket to fetch water

Dec 10, 2009 Editorial

City Hall and the Guyana Power and Light are locked over the payment to each other—City hall claiming rates and taxes and Guyana Power and Light, payment for power consumed.
Already, the power company has disconnected City Hall and some other entities owned by the council, including a municipal day care centre. City Hall argues that most of the costs were for street lighting which GPL will not disconnect because it claims that these lights are needed for security.
The two entities had met and had agreed to exchange cheques after they had ironed out some contentious areas. City Hall claimed that the charges against GPL had increased because of interest charges on the money owed. However, by the end of the meeting City Hall had agreed to waive the interest payments.
Things went into reverse when the City Hall team reported to the statutory meeting of the council that it had agreed to waive the interest payments. The council immediately said that the team had no such authority and insisted that GPL pay the money owed plus interest.
Well GPL fired back by applying interest to the money owed by City Hall and the sum has become a whopping $1.5 billion instead of the $600 million claimed at the outset.
The harsh reality is that City hall has never been in a position to raise the kind of money to satisfy its debts and to undertake those things.
Last year, when City Hall announced that it was cash-strapped and that it needed to do certain things, the Local Government Minister said that whatever City Hall proposed could not be even considered. Instead, he aid that if the city fathers and mothers should go vigorously after those who owe it, then the council would collect more than enough money to do all those things that it needs to do.
At the same time, the government would step in with a sum of money to help defray certain expenses. City Hall seems unable to maintain a steady payment to the garbage collectors and even to the staff. On occasions the staff had had to take strike action.
Last year, for example, City Hall workers had a bleak Christmas because there was just not enough money to pay them a promised increase and their wages and salaries.
But there is something that is often not being taken into consideration. When the Minister and later President Bharrat Jagdeo said that an aggressive collection by City Hall could change the fortunes of the council, they did not take into consideration that they were all—Government, City Hall and the Minister—operating in a society where people are reluctant to pay their bills. It is as if those people all expect to have everything for free.
The government, as aggressive as it is, cannot get some people to pay. We know that Guyanese have developed the reputation as notorious tax dodgers. The government keeps finding people who try to bribe Customs officers and every now and then there is the discovery of a fraud.
The commercial banks have a problem getting their money from people who borrow in good faith. One bank that found out the hard way that collecting money is a difficult pastime was the Guyana National Cooperative Bank. Other banks have had the same experience to the point that people even went to the extreme of surrendering assets that repay their loans.
Companies that enter into hire purchase agreements with shoppers also have the same problem. The truth is that people either cannot pay or simply have an aversion to paying. Globe Trust collapsed because of the same inability of the bankers to collect money loaned.
City Hall is operating in this very society and to suggest that there be an aggressive collection campaign is to ask it to do the impossible. The courts are not helpful because they are so slow. It could take years for the council to recover any money it seeks from errant ratepayers.
Whatever the case, City Hall is in a bind. It should renew its campaign to seek other revenue earning ventures.

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