The gas-to-shore project must not become the PPP/C’s cash cow

Jan 31, 2021 Features / Columnists, Peeping Tom

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Kaieteur News – The proposed gas-to-shore project must be guided by technical and developmental considerations. It must be prevented from becoming a cash-cow for the rich friends of the PPP/C.
The previous administration was slothful in moving forward with a plan to utilize the vast amount of natural gas to be produced during oil production. The APNU+AFC sat on its laurels for five years and did very little with the result that oil production commenced and there is no plan to use the natural gas produced.
The natural gas is of no value to the oil companies. They have made no offer to buy the gas and they will not since natural gas prices are now collapsing around the world. In the United States, natural gas prices have dipped 30 percent since last November on account of predictions of a warmer winter.
Europe sees no future in natural gas; there is greater interest in hydrogen. The Head of the European Investment Bank was quoted as saying, “To put it mildly, gas is over.” Europe sees greater use of natural gas as an interim source during the phasing-out of coal and the introduction of hydrogen.
But the prognosis of Europe and the United States should not be the only factor shaping Guyana’s response to natural gas. Such a critical resource should not be wasted. If flaring is allowed to continue, it will disrobe Guyana’s reputation as a net carbon sink. Instead of the country becoming an environmental high-flyer, it will become a major polluter.
Guyana also needs cheap and affordable energy. The high cost and unreliability of energy is a major constraint facing the country’s manufacturing sector. The country cannot improve or increase manufacturing and business sectors without affordable and reliable energy.
Natural gas has the potential to help solve this problem. But for it to do so, the natural gas has to be converted into a public energy good. This would lend support to the establishment of a gas-to-shore project but not along the lines contemplated by the PPP/C.
The PPP/C’s mentality is to use public infrastructure projects as cash cows for favoured investors. The Marriott Hotel and the Berbice River Bridge are prime examples of public private partnerships modelled in a manner aimed at enriching private investors at the expense of taxpayers.
It was taxpayers’ dollars which floated these projects. And if the projects collapse, it is the syndicated investors – the identities of which are top-secret – who will have the first lien on the assets. As was pointed out by this newspaper many moons ago, the preference shares would allow these syndicated investors to buy-out these projects at rock-bottom prices should the financial model collapse as it appears to be doing.
Public private partnerships (PPPs) are attracting a bad name. Last October a number of civil society organizations (CSOs) wrote to the World Bank and the International Monetary Fund urging a rethink of PPPs, pointing to their negative results in developing countries.
But those organizations need not look any further than Guyana, where PPPs have become cash-cows for friends and cronies of the ruling People’s Progressive Party while threatening public corporations with bankruptcy. The finances of the National Insurance Scheme have been thrown into turmoil as a result of its reckless investment in the Berbice River Bridge. Duty-free concessions, financed by taxpayers, have been doled out to these PPPs without any positive returns to taxpayers.
It is within this context of the PPPs being used to fatten the pockets of favoured investors that the proposed gas-to-shore project should be examined. If this project is to be modelled along the lines of providing a public good, then it has at the minimum to be financed by small investors and private citizens and, secondly, it has to deliver free residential electricity (to a threshold) for all citizens.
The PPP/C should not be allowed to conceptualize the gas-to-shore project as another PPP (public private partnership) project to benefit its friends and cronies. This must be protested vigorously. The PPP/C, and especially those who were involved in the modelling of the Marriott Hotel and the Berbice River Bridge, must not be allowed to turn this project into a revenue stream for their friends and cronies.
The gas-to-shore project must be conceptualized in a manner to deliver a public good, just like what the World Health Organization is asking of the coronavirus vaccine. The heavy-pocketed friends of the PPP/C should not be allowed to milk this project for their own enrichment.

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

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