GUYANA MAY BE SOON UP FOR SALE

Sep 24, 2013 Features / Columnists, Peeping Tom

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If Bernie Madoff and Allen Stanford had in their corner some of the con artists that operate from some government offices in Guyana, they would have got off scot free with their Ponzi schemes.
Once you run Ponzi schemes, such as what Madoff and Stanford did, eventually you will be discovered because those schemes amount to taking money from one investor to pay to another in a situation where all investors will have to be paid.
Eventually, there will be cash flow problems and the bubble will burst. This is what happened to Madoff and Stanford, except that it was the financial crisis that dried up their ability to circulate their clients’ investments.
The con artists in Guyana could have shown Madoff and Stanford a better way: how to take money from the government and hand it to private individuals and companies. And get away with it.
Imagine a situation where you put the most money into a company and then reserve for yourself a minority place on the Board of Directors. Imagine that you get together with some chaps and decide to build a structure. You put up 90 per cent of the total investment and the other chaps chip in with 10 per cent and then you turn around and tell the other fellas not to worry about paying you any dividends which is worth some $100M a year. This is like you asking these fellas to rob you. How else does one explain the decision of NICIL to waive the payment of $100 in dividends each year. And to add insult to injury, you put up 90 per cent of the funds and those with the 10 per cent dominate the representation on the Board, which means you have no influence at that level.
No wonder when the AFC approached the government during the Budget negotiations to reduce the tolls for crossing the Bridge, the government said it could not because the Bridge is a private company. It is a private company because the government has placed control into the hands of its friends even though taxpayers put up 90 per cent of the total investment.
And then on top of that they have waived the dividends that is due to the people of this country.
This is the same ploy that is being planned for the Marriot Hotel. The government is asking for a company which is putting in only 13 per cent of the total investment into the company but is granting to that company a 67 per cent shareholding.
And for lending three billion dollars for the construction of the hotel, the taxpayers get no interest. They are not likely to get any dividends either and in fact the hotel will be snatched from right under their noses since when it does run bankrupt, it is the syndicated investors and a single private investor that will have to be first paid.
Since there will be nothing left to pay back the people of Guyana, it means that these private investors will walk away with the hotel while the Guyanese people hold useless paper.
This is what public-private partnerships (PPP) have become. They have become vehicles for transferring wealth from the people of Guyana to the friends of the government. Public private partnerships have now become the norm to rip off the people of this country.
The private sector of Guyana supported the construction of the Marriot Hotel. Are they now in agreement with the model that is being implemented, one in which a minority foreign investor will virtually take control of national assets and effectively reduce NICIL’s substantive investments( through loans and equity) to a useless piece of stock?
The private sector now knows that the government is waiving its dividends payable by the Berbice River Bridge in order that private investors who have contributed only 10 per cent of the total cost of the bridge can reap millions each year. Do they still support this model?
This is the same model that will be used for Amaila Falls Hydroelectric Project. The government will match the investment of the private equity partners but have a minority shareholding, which means that in effect whatever decisions the private investors want will be carried and there is nothing that the government can do about it.
This is just like handing the Amaila Falls Hydroelectric Project to the private investors in the same way as the Berbice River Bridge has been forfeited and in the same way as the taxpayers monies in the propose Marriot will be used to hand the hotel to some small investor.
What next? Who knows? By next year, this public private partnership (PPP) may extend to the whole country and Guyanese stand to revert back to being colonized people, not by the British, but  by a band of carpetbaggers who may end up buying out the whole country.

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