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NO SURPRISE!
The problems that are being encountered in the project involving the laying of a fibre optic cable from Brazil should not surprise anyone. From day one, the publisher of this newspaper, Mr. Glenn Lall, had predicted that this project was another dubious scheme foisted on the Guyanese people.
Lall has not said it but we all know that he would be absolutely correct in saying, “I told you so!” There are confirmed reports that the project is in dire straits. Even though the government says that the problems being encountered are not irredeemable, there is a strongly held view that the future of this project is uncertain and that billions of dollars may have gone down the drain.
This project was mired in controversy. The financing arrangements were suspect. The rationale for the project was questionable. And the capacity of the government to manage a project of this scale and technical complexity was always doubtful.
The funds for this seven billion dollars project came from the sale of the shares held by the State in the Guyana Telephone and Telegraph Company. These shares represented 20% of the total shareholding of the company which was formed under the PNC. When the issue of the sale of these shares arose, the PNCR asked the government to sell the shares to the workers of the utility.
While it is doubtful that the workers or their unions could have raised the necessary funds, the government could have at least offered to sell these shares to the workers and if the workers could not have raised the necessary funding, then the shares could have been sold to private sources. Better yet, the government could have gifted the shares to the workers as a demonstration of their commitment to the working class. There are many who feel that the terms under which the shares were eventually sold to a foreign interest represented a giveaway. That issue was ventilated in a series entitled The Heist of Guyana published in this newspaper and presently viewable on its online edition.
The entire financing arrangement for this fiber optic cable was therefore shrouded on controversy. For a project of this size it is difficult to understand why the government, which in the past sought international funding for almost anything, did not seek external financing for the project.
The second problem with the project was its rationale. There was and remains no justification for the government getting into a project of this nature. The government in justifying the Marriott Hotel project had indicated that the financing for the hotel was outside of the reach of the private sector and the government needed to catalyze the investment.
In the case of the fibre optic cable the same excuse could not have been used to justify Government investment because GT&T was interested in making such an investment. In fact, if needs be Digicel is capable of making such an investment. What therefore was the rationale for the government investing in a venture which should have been left to the private sector?
The main reason given by the Jagdeo administration is that the existing service provided by GT&T was not up to standard and the government therefore needed to make the investment. It was most unconvincing argument because another private operator has since been offering internet services that are superior in speed and cost to that provided by GT&T.
Therefore, the private sector had the financial capacity and the technical means to provide the very services that the government was opting to provide under the fiber optic cable. The rationale of the government in undertaking this investment was therefore questionable.
Finally, it was always doubtful that government could have managed a project of this scale and technical complexity. It was always going to be a high risk for a government to be undertaking a project of this scale out of the Office of the President when such a project requires a full-fledged, well- resourced and incorporated project implementation unit.
It is not known how many of those persons involved in administering this project had ever undertaken a project of this scale. It is not known if any of them had ever undertaken work on a project of such technical complexity. But even if there was the experience and technical expertise, operating with funds from the Budget was always going to make the administration of a project of this nature very challenging.
The government in undertaking this project entered into a high stakes gambit. The project is now on the verge of collapse. As predicted by Glenn Lall.
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