Guyana has gotten the shaft

Dec 16, 2017 Features / Columnists, Peeping Tom

The APNU and the AFC, when in opposition, were highly critical of the US$150M Cheddi Jagan International Airport Extension Project. You could have easily been led to believe that no sooner had they assumed office, than they were going to scrap the entire project.

But no sooner had it settled into office having deposed the People’s Progressive Party Civic, which had negotiated the contract, than the APNU+AFC went ahead with the project. That money is being borrowed from China. It will have to be repaid with interest.

The government is also borrowing money for the widening of the East Coast Demerara Public Road from China. That money will also have to be repaid with interest.

The PPPC had begun work on the construction of a bridge across the Demerara River. Debts will have to be incurred to facilitate that project even if an investor is found who will sign on to Build Own Operate and Transfer (BOOT) arrangement. This means that the government may not have to borrow to build the actual bridge. Approaches will have to be constructed, compensations for lands will have to be made and other local costs incurred. All those sums will have to be borrowed and repaid with interest.

All of this borrowing and having to repay with interest is happening while Guyana is sitting on one of the biggest oil finds ever, estimated at close to 3 billion barrels of oil. How ironic that Guyana is sitting on a fortune, yet has to scrounge around to borrow money to fund major infrastructural projects.

Guyana signed a contract for a US$18M signing bonus with ExxonMobil. Brazil, one year later was paid a signing bonus of US$700M for rights to a number of exploration blocks in Brazil. Brazil has made public its signing bonus. The government of Guyana was forced to come out and reveal what it had done more than one year ago.

The nation is still reeling from the shock discovery of the signing bonus. There were denials earlier this year of any knowledge of the signing bonus. The truth has now been exposed. What was hidden could not have remained hidden for too long.

No one who went to the press conference hosted by the President yesterday questioned how it was that Guyana only negotiated such a miniscule signing bonus when compared with what Brazil has received as its signing bonus. No one asked and probably no one will ask whether Guyana got the long end of the stick when it comes to its renegotiated agreement with Exxon Mobil.

If Guyana had gotten US$500M as a signing bonus, its financing needs for infrastructural projects would have been solved. It would not have needed to be borrowing to extend the airport. It could have funded the bridge across the Demerara River without having to borrow a cent. It could have paid public servants better wages. Teachers could have gotten a 200% increase in wages. A lot of things could have been done with that money.

Guyanese are rightly concerned about the fact that the government did not disclose for over one year that it had received a signing bonus. There is also concern about the claim that the monies are being held in escrow.

The bottom line is that there has to be some form of accountability for this money. It has to appear in some ‘books’.

A number of persons were charged by SOCU and are before our Courts for not ensuring that some record was made in a ledger. Yet, here is US$18M which has been deposited into a foreign exchange bank account and yet no one could have found a record of where it was reported. And no one is going to be charged for this fact.

No one; however, is asking the question as to whether Guyana was shortchanged over this signing bonus. The concern is about the secrecy, the denials about the signing bonus and the fact that it was secreted in a foreign currency account.

But what about the actual deal that was signed? Did Guyana come out looking good and smelling sweet?

Far from so, Guyana has gotten a poor deal when compared with Brazil. Exxon “caught a ‘packu’ and bust its back.”

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