Latest update November 25th, 2024 1:00 AM
Nov 23, 2019 News
…Ramps Logistics says ‘we don’t import, we only ship into the country’
By Gary Eleazar
Several companies operating in Guyana, but based in neighbouring Trinidad and Tobago (T&T), have been securing contracts for the supply of goods and services to the emerging oil and gas industry, while undercutting local counterparts, using the Production Sharing Agreements (PSA) that the Guyana Government signed with oil companies.
Under the various PSAs inked with Government, oil companies and their affiliates are exempt from the payment of any taxes, a loophole which has caused companies such as Ramps Logistics, Triple D Inc. and another T&T Company to secure contracts at a lower price.
What this means is that the oil operators are given the exemptions or concessions on the purchases, imports and use of consumables and other accoutrements related to the oil sector.
What has been happening is that the companies have been using the ‘loophole’ in the contract that has been signed with the government of Guyana which permits the waivers, for the “contractor or affiliated company in respect of income derived, from petroleum operations or in respect of any property held, transactions undertaken or activities performed…”
What this means is that the companies such as Ramps Logistics and others do not even have to apply for a tax waiver, since the oil company giving the contract is given the concession and this is passed on to the contractor.
Investigations by this publication found that it is the duty free and other waivers which are handed to the Oil Companies in the PSA, which allow for companies to now be listed as affiliates in the process being exempt themselves making the payments.
What this has led to is that companies like Ramps Logistics, which recently secured a multi-million-dollar contract with an Oil Company, not even having to apply for a waiver of duties, since by virtue of being an affiliate or contracted supplier of the oil company, the waivers are automatic.
Chief Executive Officer (CEO) of Ramps Logistics, Shaun Rampersaud, in an interview with Kaieteur News denied being an importer of commodities for the oil companies, but rather, they are involved in the shipping, brokerage and other logistics for the oil company that they were contracted by.
He was adamant the company did not get a contract to be listed as the importer, but was rather only involved in the shipping and other logistics, including brokerage and transport.
He confirmed that it is the companies that are in fact being listed as the importer of any commodity, which is then turned over to the contracted company to handle its logistics.
Investigations by this publication had found that a large multimillion-dollar contract recently handed to Ramps Logistics, has raised eyebrows among domestic counterparts, since, according to sources, the contract demonstrates the inability of locals to compete with foreigners when it comes to servicing the emerging oil and gas sector.
The contract was awarded to Ramps for the supply of logistics and other services, but domestic companies lost out since the T&T Company managed to under bid each of the local counterparts.
It was explained that this was done, since when a Request for Quotation (RFQ) is invited by the companies such as Tullow, an estimate or bid is prepared by local companies to include applicable duties and taxes that will have to be paid.
“What this leads to, is the ability to significantly under bid local counterparts…They are bringing in everything duty free, they can quote less than what we can quote,” one supplier told this publication.
Despite calls for increased local content, the supplier explained that there is no level playing field, since those companies would have already made significant purchases over time, all of which would have attracted import and other duties.
“Local companies cannot compete against entities such as Ramps Logistics, since the playing field is not level in terms of rules and in terms of the players.”
One supplier said, “…We are not against foreign companies entering the market, but what we are against is the policy of the government that allows these companies to come and take advantage through unfair competition fostered by the uneven playing field.”
Ramps Logistics secured a fully integrated cross-border logistics contract inclusive of Shore Base provision and management, marine agency, personnel logistics, freight forwarding and customs brokerage, with UK-based Tullow Oil for its upcoming Guyana drill campaign.
Further to this, a host of third party services such as waste disposal, tank cleaning and CCU provisions have been secured.
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