Is it feasible?

Mar 30, 2021 Features / Columnists, Peeping Tom

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Kaieteur News – Up to now, this column has not commented on the statement attributed to Vice President, Dr. Bharrat Jagdeo, to the effect that the call for a feasibility study for the gas-to-shore project is a ‘no-brainer.’ Others have described the Vice President’s statement as “disappointing, arrogant and insulting.”
This column would not characterize the statement as any of the aforementioned. It is the opinion here that the statement is idiotic. It is inconceivable that a national leader could spew such drivel.
Here is major project which from all accounts, the government intends to pursue. And in addressing a worldwide audience over the Internet, the call for a feasibility study is said to be a no-brainer.
That statement by Dr. Jagdeo should disqualify him from any future involvement in that project. It also places the young President in an uncomfortable and embarrassing position. What happens when potential financiers demand to see the feasibility study? Will they be told that this is a no-brainer? Or have selected investors been identified even before there is a project document?
The Vice President’s no-brainer statement can only be deemed a personal opinion. Such a position can neither represent nor bind the government. It would be unimaginable if the President and his government were to support such a position.
After the debacle of the Skeldon Sugar Factory, it is unthinkable that any major project would be undertaken without a feasibility study. Except if the objective is to create another white elephant and bankrupt the economy!
Anand Goolsarran, the former Auditor General of Guyana, conducted an audit into the construction and operations of the Marriot-branded hotel built during the tenure of the PPP/C government. The audit found that Cabinet took a decision to proceed with the project without a feasibility study. The audit concluded that there was no economically sound basis for Cabinet’s decision to proceed with that project, since at the time Cabinet made its decision; it did not have a feasibility study.
The audit, however, did indicate that the original pitcher of the project did do a study. But this would have been relatively dated by the time the decision was taken by Cabinet to approve the project. By the time Cabinet decided to move ahead, the person who pitched the idea was no longer involved and as such Cabinet could not have had the benefit of that study because it could not have been produced for propriety reasons.
Atlantic Holdings Incorporated, the developer, did indicate that a number of studies were done. But these would have been specific to the interests of those undertaking the studies, such as the Marriot chain and Republic Bank, which handled the syndicated portfolio. It is doubtful whether Marriot would have branded that hotel without some understanding as to the feasibility of the investment being made. But this fact does not absolve the government from not undertaking its own feasibility study especially considering the financial model involved.
The PPP/C had commissioned a pre-feasibility study for a new Demerara Harbour Bridge in 2013. So why this rancour now over the calls for a feasibility study for a project which is likely to end up costing more than five times the cost of the bridge?
Two years ago, the PPP/C, then in Opposition, issued a call for a feasibility study of the sugar industry, as well as, for a transparent plan. But no sooner it embarked on the campaign trail that it announced that it would be reopening the closed sugar estates.
And it did when it returned to office in August 2021; it did not launch any feasibility study. But it has been announced that the Corporation is selling sugar at half the price it costs to produce and hopes to sell 40 percent of its sales as packaged sugar, which fetches a higher price. No one said whether a feasibility study was done to determine whether there existed a real possibility of additional markets being found for packaged sugar.
To its credit, the APNU+AFC had undertaken a feasibility study of the sugar corporation engaging in aquaculture. And the report of that study was handed over to the corporation. To date, the PPP/C has said nothing about its plans for aquaculture as part of any diversification efforts within the sugar industry. Certainly, if aquaculture can turn a profit, it may be a useful device for cross-subsidization of the loss-making sugar production.
In relation to sugar, the PPP/C is obviously acting on the basis of political expediency. It promised its supporters that it would reopen the estates and it was determined to do so whether or not there is any future in sugar production.
But surely there can be no such political expediency when it comes to the gas-to-shore project. So why this issue about the feasibility study for the project being a no-brainer? What is behind this project and who benefits?

(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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