PPP/C must be held accountable for poor investment deals

Oct 03, 2014 Letters

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Dear Editor,
“Guyana is to earn US$960 million from 17-year Aurora gold mine” screamed the arresting headline in  the online Demerara Waves of  1-9-14.  The report credited the President and Chief Executive Officer of  Canadian owned Guyana Goldfields, Mr Scott Caldwell  for the prediction that “the mine is expected to produce US$150,000 ounces of gold per year beginning late 2015.”  Whether the estimated US$960 million from the US$150, hundred million which Guyana is to receive is an annual sum, or earned over the entire 17-year period was not clear.
But the roughly US$ 1 million revenue which Guyana may get compared to the US$150 hundred million which the Canadian company will get before
expenses is staggering.
Guyana Goldfields Inc however deserves congratulations for its candid and timely sharing of information with the Guyanese public.  The foreign owned company is however making their story very clear that “ the initial capital investment amounting to US$250 million for 2013 to 2014″ according to Mr.  Caldwell, would have to be repaid. Money borrowed is money which must be repaid is the worldwide norm.
So what intelligent PPP/C government political wisdom agreed to such a deal?
Respected Guyanese diplomat and stalwart PPP member Dr Odeen Ishmael exposed the former PNC governments’  “sell out” of Guyana’s forests to
the former treasurer of Britain’s Conservative party Lord Maxwell Beaverbrook  in the online Guyana Journal of October 2007.
Chronicling PNC government misdeeds, he wrote: “There were indeed some controversial privatisation deals which took place. The one that
received the most publicity was the sale of Demerara Woods Limited.
Lord Maxwell Beaverbrook, a former treasurer of British Conservative Party, bought the entity in February 1991 for £9.7 million. He also negotiated and obtained a 50-year lease for 1.1 million acres of rainforest.
“Just two months later, in April 1991, he sold his interests to United Dutch Company for £61 million worth of equity in that firm. The new entity was re-named Demerara Timbers Limited (DTL). Even though Beaverbrook had up to mid-1992 not finished paying the Guyana government for Demerara Woods, he merged the enterprise into the giant  United Dutch Company. This latter company took control of Demerara Timbers, of which Beaverbrook remained a major shareholder. By 1992, United Dutch valued Demerara Timbers at £74 million!
“The rainforest concession alone was estimated at between US$160 million to US$206 million. The IMF cited Demerara Woods as a priority item for the  (PNC government) to sell despite the fact the bilateral donors and the World Bank had poured a huge amount of financial aid (including £14 million from the European community) for the development of Demerara Woods. Furthermore, Demerara Woods’ debt was underwritten by the  (PNC) government as part of the sale agreement. Thus, the citizens of Guyana subsidised the bargain-basement sale of a timber asset to entice foreign investment into the country.”
After Dr Bharat Jagdeo’s PPP/C government actively continued the PNC’s government’s  divestment policy the goal of attracting foreign
investments became a successful reality. Wasn’t such a policy supposed to earn greater dividends under a working class PPP/C government? Those
who sincerely believed corruption under the PNC would have been curtailed with the 1992 PPP/C government will be in for an even bigger
surprise with any  future change in government.
What can only be excellent news as Demerara Waves  revealed, is that Guyana Goldfields Inc “intends to employ up to 900 staff and workers
during the development and construction of the mine during 2013-2014.
But that number is expected to decline to about 400 to 500 staff and workers during actual mining operations from 2015 and beyond.”  While
job creation in  Guyana especially for Afro Guyanese workers who have traditionally been involved in mining – what does the “big picture”
reveal? We may never know.
But let’s hear the grand explanations which previously bemoaned Omai and Guyana Timbers , but  are with  convincing lavish “surwa”  (gravy) with
its mouth watering aroma for us to swallow it  Guyanese certainly cannot  eat “gold ore” beneath, while  we walk about six feet above the earth feuding with each other with our respective  rights of entitlement. But we do have a date with destiny and what is more stimulating than being buried in gold ore.
Let’s be clear. Guyana Goldfields Inc has done nothing wrong nor should be subjected to any  unfair recriminations  for their  good fortune.
The busy Canadian diplomats who frolic and fawn on all our Guyanese politicians are  simply ensuring their national interests are well protected, regardless of which political party rules Guyana.  It’s Guyanese who must hold their own Government accountable and this case is certainly not in doubt.
Guyanese would have had a lot less to quibble about if the Canadian owned company had lucked out and lost its investment.  Mining production is very expensive. The “cost of production is estimated to be US$800 per ounce based on world price of US$1,300 per ounce” according to the  Demerara Waves report.The company hopes to extend the life of the mine from 17 to 35 years.
What has limited Guyanese from raising such investment capital for similar  private enterprise ventures? “The fault lies not in our stars but ourselves that we are underlings” (Shakespeare’s Julius  Caesar).
Sultan Mohamed

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