Halt granding exorbitant concessions to foreign investor – AMCHAM president tells Govt.

Aug 25, 2019 News

It is no longer necessary to grant exorbitant concessions to foreign companies in the hope that it will lure them. That practice must stop.

President of AmCham

This is the insistence of President of the American Chamber of Commerce (AmCham), Zulfikar Ally, who presented on the third draft of Local Content Policy, on Wednesday at The Duke Lodge.
“I think we are all aware Guyana has become an attractive destination for foreign companies,” Ally said.
“In the past, all efforts were made to attract these companies to Guyana with the provision of incentives, taxes, duty-free concessions.”
This issue has long been a contention of many, as it relates to the mining sector.
And when it comes to oil, the benefits given to companies like ExxonMobil are so awful that Government has fielded heavy criticism for the provisions of the Production Sharing Agreements (PSA).
Virtually every aspect of the contracts have been criticized- from royalty and profits, to relinquishment and decommissioning.
Even after the discovery of oil, another company, Tullow from the United Kingston, has managed to get the Government of Guyana to agree they will take an industry-low one percent royalty in its PSA for the Orinduik Block.
This was despite the fact that Guyana was already boasting about three billion barrels of recoverable reserves when the contract was signed.
Opposition Leader, Bharrat Jagdeo, has argued that since Guyana knew it had oil at the time, Government should have gotten a much better deal.
Now, the draft local content policy – two local content experts and three drafts later – has still left many wanting. It doesn’t even have penalties for non-compliance with its targets. That was another issue that was raised at the Roundtable Discussion, about the policy.
“The country,” the AmCham President said, “no longer has to be overly generous with this policy, but to now ensure that the local private sector, Guyanese, especially small-sized enterprises, all benefit from these concessions and duty-free [concessions], in order to build their capacity to enter this new sector.”
For that, he said that Government must allow its outlook on business and the attraction of investment, to undergo a major shirt.
“We have to focus more on Guyanese rather than international companies, because they will come here regardless.”

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