Guyana benefits nothing from BaiShanLin agreements - Former Auditor General

Guyana benefits nothing from BaiShanLin agreements – Former Auditor General

May 25, 2016 News

“How has my country benefitted?” questioned former Auditor General, Anand Goolsarran, as he

Former Auditor General, Anand Goolsarran

referenced the various investment agreements signed between BaiShanLin and the People’s Progressive Party/Civic (PPP/C) government.

Goolsarran conducted the forensic audit into the affairs of the Guyana Forestry Commission (GFC). Therefore, he knows all too well how BaiShanLin operated and he knows about the benefits the company reaped though the various one-sided agreements.
Kaieteur News recently highlighted some of these agreements signed by BaiShanLin and the PPP/C Government. The newspaper showed the magnitude of concessions requested by BaiShanLin and granted by the PPP/C government.
These were extreme when matched against the proposed projects, or any project for that matter.
Among the concessions sought by BaiShanLin were requests for one billion tons of cement, one for 300-plus trucks, and another for two billion pails of paint. Those items were included in a list of 100 items that BaiShanLin submitted to former Trade Minister, Irfaan Ali, for concessions.
While many of the requested waivers have been approved, this publication is yet to confirm if the PPP/C granted them all. However, the waivers on the cement and paint alone would amount to just about US$60B in lost taxes.
Irfaan Ali has since said that he knew nothing about any concession and that he never granted any. Former President Donald Ramotar later concluded that Irfaan Ali did not have the authority to grant any concession.
But BaiShanLin has set up and is operating a cement plant at Providence, East Bank Demerara.

AGREEMENTS ONLY BENEFITTED BAISHANLIN
During a recent interview with Kaieteur News, Goolsarran said that the agreements made between BaiShanLin and the previous government only benefitted BaiShanLin.

BaiShanLin’s Managing Director Chu Hongbo

Goolsarran pointed out that fiscal concessions are usually granted to foreign companies to import much-needed capital equipment for business ventures.
The hope is that there will be job creation; contribution to Gross Domestic Product (GDP) growth; increased foreign exchange earnings and contribution to the Treasury by way of taxes from both employees and the employers as a result of business activities, among others.
The former Auditor General noted that it is imperative that the extent of the fiscal concessions be weighed against the benefits to be derived. However, it does not seem that this was the case with BaiShanLin.
Goolsarran said that BaiShanLin was granted “generous” concessions with the objective of setting up downstream wood processing operations. However, after nine years, the company is yet to deliver. Instead, BaiShanLin has been exporting logs through a number of local logging companies in which it has controlling interest.
In addition, Goolsarran pointed out that BaiShanLin is involved in other activities that are outside the scope of the investment agreement it has signed on to.
He noted that there is no evidence to suggest that BaiShanLin’s revenues are returning to Guyana. In this regard, Goolsarran emphasised that BaiShanLin’s audited financial statements for 2007-2011 show that the company was in a state of bankruptcy.
“The economy has not benefited in any significant measure compared with the fiscal concessions granted. One might argue that those responsible for approving fiscal concessions for activities that are clearly unrelated to the setting up of the wood processing, should be held liable for such a reckless act and should be sanctioned.”

TIME TO LET GO
Goolsarran is of the opinion that there is enough evidence available for the government to do what’s best for the nation and pull the plug on BaiShanLin.
He explained that the investment agreement signed between the PPP/C government and BaiShanLin specifically states that the agreement can be terminated and all fiscal concessions become repayable, if BaiShanLin persistently fails to honour its commitment and obligation without reasonable explanation.
Goolsarran said that the fact that BaiShanLin is yet to set up the downstream wood processing facility as promised is enough grounds to pull the plug. He noted that the company has been given extra time to do this and is indeed yet to offer “a reasonable explanation” as to why it has not yet set up the facility.
BaiShanLin committed numerous other transgressions that violate the laws of Guyana. The government can also use these as grounds for the termination of agreements.

1 thoughts on “Guyana benefits nothing from BaiShanLin agreements – Former Auditor General”

richierich. May 25, 2016 at 10:13 am

You are trying to tell us that everything these Chinese are doing in Guyana is based on them setting up one wood processing operation and they can’t do that, yet the Government is dragging their feet in dealing with them. Anyone in the rest of the world that hears about this transaction is probably laughing at us. You should not worry why most Guyanese are hesitant in returning to Guyana. SMH.