QUESTIONS MUST BE ASKED OF THIS PRIVATIZATION

Oct 17, 2013 Features / Columnists, Peeping Tom

When the National Assembly reconvenes after its annual break, important questions concerning the privatizations that have taken place under the Jagdeo administration should be tabled by the opposition parties.
Questions about the Privatization Unit’s handling of assets entrusted to NICIl should be tabled, demanding that answers be given through the Minister of Finance.
One of the privatizations that was been surrounded by controversy was the sale/lease of the Sanata Complex. The saga of this privatization began with the sections of the sprawling compound being advertized for lease. Specifically the ads were placed in relation to the dying factory and the printing factory and not for the whole complex.
It was reported that no bids were received. This is not surprising since the ads were placed specifically in relation to sections of the complex and not the entire compound which is estimated to have had a market value reaching into the billions of dollars.
This assessment is based on the fact that right next door, the John Fernandes Company had paid hundreds of millions of dollars for a container storage facility and this was for land alone and land which was a fraction of that which was subsequently privatized.
An image of the Sanata Complex as a rundown and abandoned compound has been presented to the media. But this is far from so since many of the buildings were made of solid clay bricks. Also, the compound was being used by the Guyana Revenue Authority and when that agency was summarily dismissed and ordered to remove these assets from the compound to facilitate the new owners, the tax agency had to spend millions to rent private property for their storehouse.
The complex also was strategically located and its location given its proximity to a potential workforce, just on the outskirts of the city and in close proximity to the wharves would have increased its market value substantially.
Having received no bids for the dying and printing plants, the Privatization Unit said that based on precedent it entered into negotiations with a company for the lease of the entire complex. This is where things got very complicated and disgusting.
What precedent was the Privatization Unit speaking about? The only precedent that was created was that one thing was advertized and an agreement entered into for something much bigger and substantial.
The question that needs to be asked is: why was the entire complex not put up for lease or sale? After all it cannot be said to be a transparent arrangement if you first advertize one thing and then enter into an agreement about another.
In this instance what as advertized was for the printing and dying facilities. But the subsequent agreement was for the lease of the entire complex for which no one had an opportunity to bid. It is hoped that whenever the National Assembly considers this sale/lease that questions will be posed to the principals of the Privatization Unit, demanding an explanation as to why one thing was advertized and another thing leased or sold.
Even high officialdom conceded that what was subsequently the subject matter of the privatization was different from what was advertized. As such the issue of a precedent does not arise because the public did not have an opportunity to bid for the entire complex.
Questions need be asked as to this discrepancy.
What also needs to be clarified is whether there was a clause within the lease agreement that gave the company leasing the facility the option to buy. If a facility is up for lease how is it that that there can be an option to buy. If such a clause existed, it is tantamount to saying that the person who leases has a right to purchase. Well what about all the other persons who have leases with the government. Would it not be fair also to give them a right to purchase?
There is also the question of the valuation for the sale of the property? How was this determined? Hopefully, the opposition parties would not be deflected from their task of calling the privatization Unit to give account for these deals. It is within the remit of both the Economic Services Commission and indeed of the Public Accounts Committee to begin hearings into this matter because it did set a dangerous precedent as to how state assets were disposed of.

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QUESTIONS MUST BE ASKED OF THIS PRIVATIZATION

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