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GCCI slams Govt. over policy imbalance favouring foreigners
…says clear advantage to GTT, T&T operators shows need for local content laws
By Gary Eleazar
The inability of local companies—large and small—to effectively compete with the plethora of foreign counterparts that are flooding Guyana in light of its emerging oil and gas industry was glaringly illustrated in articles carried in Kaieteur News over the weekend.
The reportage further demonstrates the need for government to take a serious look at the way the domestic business community is fa
GCCI President, Nicholas Deygoo-Boyer
ring, through action or inaction on the part of the administration, according to President of the Georgetown Chamber of Commerce, Nicholas Deygoo-Boyer.
He was at the time responding to reports that the American-owned Guyana Telephone and Telegraph (GTT) experienced a 500 per cent increase in its demand in two years.
This, in the absence of a liberalised sector, which the GCCI President argues has placed local companies at a disadvantage.
He argued further that the status quo in the telecommunications sector has even prevented other foreign players from benefitting from and inherently improving the industry.
The GCCI President noted that had the local telecommunication industry been fully liberalised, local companies such as E-Networks which has begun landing fibre optic cables, would have also been able to benefit from the exponential increase in demand for bandwidth services.
Equally concerning, according to Deygoo-Boyer, were the reports that a number of Trinidad and Tobago (T&T)-based operators were given an unfair advantage while operating in Guyana using more than just loopholes.
He said the absence of a local content policy creates situations “where the local companies feel disadvantaged either because the contracts are bundled or because the requirements list conditions that the locals cannot meet at this time; but could very shortly with the assistance of the operators once they are willing to build that local content.”
Kaieteur News reported that at least three T&T based companies were benefiting from tax waivers provided to oil companies and passed on.
Investigations by this publication found that it is the duty free and other waivers which are handed to the Oil Companies in the PSA, that 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 do not even have 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 had denied being an importer of commodities for the oil companies.
Rather, the company is involved in the shipping, brokerage and other logistics for the oil company that contracts the company.
According to Deygoo-Boyer, given the historical presence of the oil companies in neighbouring Trinidad and Tobago and experience and relationships that they built up over time— it is hard for the local companies to break into the supply chain without assistance in building capacity from government and the operators.
The GCCI President explained, too, that regional, American and other companies are also able to access credit facilities at far cheaper interest rates, lower than the eight to 14 per cent being offered in Guyana, which further reduces the competitiveness of local companies.
He said that the articles highlighted just the tip of the proverbial iceberg when it comes to the litany of disadvantages faced by local companies and service providers that are made to compete unfairly with the foreign operators.
He said the situation clearly demonstrates why there is need for a robust Local Content Policy with accompanying, enforceable laws in order to protect Guyanese companies and business.
“So they can be able to compete fairly in their own countries and not be impeded by the action or inactions of its own government which appears to be failing to protect the local private sector,” Deygoo-Boyer said.
Despite calls for increased local content, domestic suppliers have repeatedly lamented that there is no level playing field.
“Local companies cannot compete since the playing field is not level in terms of rules and in terms of the players.”
One supplier told Kaieteur News, “…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.”
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