The Story Within The Story… Monitoring foreign investments

Feb 23, 2020 Features / Columnists, News, The Story within the Story

---

By Leonard Gildarie

Eight more days to Guyana’s toughest general elections yet. Oh my, the game has changed all so dramatically. No longer is it alone about the big parties. There are also a few upstarts, some of them were part or supporters of the bigger parties. A few have money, while the others are hoping that the people will be brave enough to change the status quo.
At the end of the tunnel is control of the oil and gas sector. There is definitely a fear by the parties that to lose would make it hard to compete next time against a government which has oil resources to dole around.
It is hard to judge, as Guyana has never been in that position before. We only started production of oil in December. What I can say with much certainty is that there is a feverish pace in the air by all parties to get their message out. Every street corner, playground, and square has become popular. That is a conversation for another day.
MANAGEMENT OF FOREIGN INVESTORS
Historically speaking, in the last 30 years or so, our management of foreign investors has been unacceptable. There was a time in the 90s when investments were badly needed.
Our state-run bauxite, electricity and telephone companies were struggling for cash injections to recapitalize.
Three major deals were inked – the Guyana Telephone and Telegraph Company, Barama Company Limited and Omai Gold.
Almost 30 years later, Guyana is assessing the benefits of those investments.
The persons who closed those deals will probably argue that it was a time when no one saw what was coming – that we therefore were bending over backwards.
From the telephone company that was falling apart to the bauxite industry that faced low world prices and needed money for more modern, efficient equipment, there was an urgent need for cash injections.
A US company, ATN, entered and GTT was born.
Almost three decades later, GTT is facing a severe backlash. Despite the concessions and the monopoly, it failed to quickly rollout, as it should have, landlines for the people of Guyana. Its quality of service and response time to fix faults have all been flagged time and again by the Public Utilities Commission (PUC).
Today, GTT is also under pressure with questions about its accounting practices. It will be recalled that Guyana passed Telecoms laws almost four years ago.
Today, we have failed as a country to allow new players to enter the country, because GTT is playing hardball. It has, to its benefit, been fighting for relief of more than US$40M in taxes that is being demanded by the Guyana Revenue Authority.
In the meantime, it is unrolling its services while new companies are not being allowed in.
In fact, GTT wants more concessions.
I like foreign investors. It is needed. It brings transfers of technology and experience we don’t have. It is, however, unacceptable what we as people of Guyana were subjected to and are still experiencing with the quality of service from GTT.
In the case of Barama, today, the workforce has been dramatically scaled back. The forest concessions, over 1.6 million hectares, have been relinquished. The Malaysian investors are not too enthusiastic about investment more and have been searching for a buyer.
Omai has shut shop and there are still questions what Guyana got out of that deal. For a while, there was significant employment. The gold was being taken out.
About a decade ago, there was still work being done to bring the area back to natural vegetation. We even suffered a cyanide spill under Omai.
Today, another company is leaving a bitter taste in the mouth of Guyanese.
Yes, Rusal. It has been granted billions in concessions, yet no dividends were being paid to Guyana. It has been continuously declaring a loss.
As we speak now, the workers, about 300 of them, have been sent home and the operations are at a standstill in Region 10.
We will not even talk about the atrocities of Baishanlin.
In the cases above, one has to ask…what exactly did Guyana get out of the deals?
I am sure GTT will make its case. Omai is gone and Rusal has been arrogantly silent about its treatment to workers.
2020 IS MUCH, MUCH DIFFERENT FROM THE ‘90s
In the last few weeks, on top of questions about ExxonMobil and the Stabroek Block, there have also been disclosures about three new hotels and land at Wales.
A number of investors are here, including from Trinidad and the US, who have signed deals to build AC Marriott and Hilton hotels at Ogle. Some of the investors are also looking to establish a cold storage facility at Wales on 200 acres it will be leasing.
The transactions will speak to an evolving role for the National Industrial and Commercial Investments Limited (NICIL). That state-owned entity has been controversial in the past and the same words of caution will be issued.
Let us ensure that Guyana benefits. It is not all about tax holidays for them. Not only jobs. There also has to be strict adherence to agreements signed and not deviations.
Timelines must be met and kept. NICIL has to understand that the year 2020 is much, much different from the ‘90s. We are in the driver’s seat now.
The US is the one confirming that hundreds of companies are waiting to come.
Investors are knocking. We have to skillfully negotiate our deals and ensure that Guyana gets the best agreements. The benefits have to be jobs, taxes and the spinoffs. We have to strike a balance.
We are tired of bending backwards and hearing, ‘oh, they are coming and providing jobs’.
That cannot be the only reason. Let us wake up.
NICIL and others have to ensure they have the mechanisms to monitor these companies to ensure they deliver. We expect nothing less.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper)

---

---