SELL STABROEK MARKET!

Dec 11, 2009 Features / Columnists, Peeping Tom

The dispute between the Guyana Power and Light Inc. (GPL) and the Mayor & City Council (M&CC) is a straightforward matter. The Council owes GPL and GPL owes the Council.
Where the problem arises is that accounting practices dictate that there should be an exchange of cheques between the two sides. Under this procedure, the GPL pays what it owes to the Council and at the same time the Council pays what it owes.
GPL can very well afford to pay what it owes. But since the Council is said to owe in excess of six hundred million dollars, and given its cash-strapped state, there is no way that it can find the hundreds of millions of dollars necessary for an exchange of cheques.
Thus the problem is not that there isn’t any solution to the problem between the entities; the problem is that the City Council does not have the money to pay what it owes.
Forget all the grandstanding by the Council about the need for the power company to show respect to Town Hall. The central obstacle preventing a resolution of this crisis is the cash-strapped state of the municipality. It simply does not have the money.
That the Council has found itself in this state is very unfortunate. But there is something that it can do. It can relieve itself of the burden of managing the affairs of the city. By now the Council should have resigned or been dissolved. Instead of this happening, the future of the Council is being allowed to await the verdict of the population at the forthcoming local government elections.
The ultimate tragedy is that given the nature of voting patterns in Guyana, despite the abysmal record of the M&CC, the population of Georgetown is going to vote back the PNC and the GGG into power.
This is why there is no future in the City and it shocks me to see businesses investing in buildings in the capital when it is clear that within the next five years if the present trend continues, the city will be totally unmanageable. It will be too crowded, garbage disposal will be a headache, money will not be there to do what needs to be done and traffic will be a greater nightmare than it is at the moment.
Those who are hoping that the PPP will sweep Georgetown at the next local government polls are hoping in vain. The population of the city will vote solidly behind their traditional ally and the squabbles and excuses about not having enough revenue and being strangulated by Central government will continue.
The situation is not going to get better and this is why something needs to give in the present impasse between the Council and GPL. Both sides have a legal basis to charge interest on the sums owed. If however, GPL charges interest on what it is owed, then the problem will still not go away because then Council indebtedness would double. If it cannot find the six hundred million to pay, where will it find the one point two billion dollars that would then accrue?
There seems no way out of the crisis. Morally, the Council should not charge interest to GPL because of the longstanding and consistently applied practice of the municipality of granting amnesties of rate payers. GPL should be able as part of any agreement to claim an amnesty of interest charges, just as ordinary citizens, but it should also agree to do the same for the Council’s debt.
This however leaves the Council far worse off, since it would still – after the cancellation of the debt and the receipt of the taxes owed by GPL – owe the power company hundreds of millions. The Council does not have the money to pay. The Council may be able to cover its annual electricity bill, but it is the arrears that it has accumulated that is like an albatross around its neck. It need to rid itself of this burden.
As such there is only one solution that is left open. Council should sell off some assets to cover its debt. It should give serious consideration to selling the Stabroek Market. I am sure that it can fetch a hefty sum for this prime site which would be enough to pay off its indebtedness to the power company.