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Oil money must not be wasted on PPP pet projects
– Gaskin cites gas-to-shore, Amaila Falls as examples
By Davina Bagot
Kaieteur News – As Government draws nearer to accessing the finances in the Natural Resources Fund (NRF) – the revenues garnered from oil and gas production, Economist Ramon Gaskin has warned that the finances must not be misused to fund projects such as the much touted Gas To Shore Project and the Amaila Falls Hydropower initiative.
Economist, Ramon GaskinEconomist, Ramon Gaskin
In a recent interview, the Economist told Kaieteur News that the Government is planning to create a system where the politicians will make the decisions on how to spend the oil money. He was referring to the recent announcement by the incumbent administration that the 22-member oversight committee for the fund would be replaced with a Board of Directors, appointed by the President.
“When you put politicians in charge of spending money and big, big money like that kind, you are going to have a lot of problems. You will have wastage, you will have squandermania and you will have corruption, all of which we have at the present time, so you will get more of it at a greater degree,” Gaskin cautioned.
At the end of November 2021, some US$534,040,707 was sitting in the NRF. Already the Head of State, Irfaan Ali has signaled his intention to utilise the funds on ‘green economy’ projects and infrastructural development, as was highlighted only yesterday when the President held a briefing to discuss the Natural Resources Fund.
In his statement, Ali said, “I made it very clear that one: we have to accelerate our infrastructure transformation; better roads, better drains, better facilities, better recreational facilities, greater lighting, greater support for security services for our accelerated infrastructure transformation. We have already laid out what those transformative projects are”.
The President noted that the oil funds will also go towards the traditional sectors of the economy such as agriculture, tourism and the services sector as well as investment into human capital to boost local content.
Even more importantly, Ali noted that the NRF will be used to bring down the cost of electricity and create 50,000 jobs as was promised on the elections campaign trail. “We have spoken about this; that we want to bring down the cost of energy by 50 percent. We have spoken about the type of investment that we will have to make to make this happen…expenditure would have to be made to ensure the promise of 50,000 jobs is realised, so investment will also be made in job creation,” the President informed.
In this regard, Ramon Gaskin pointed out that a proper investment plan must be made, only after consultations with the Guyanese public. But in addition to the investment plan approved by the country, Gaskin warned that the fund must not be used to construct police stations and fund other “non-priority” projects.
“They need to set out in the law the principal priorities on how this money is going to be used, rather than leave it to the politicians to waste, squander and to steal. Politicians will steal the money because they do it all the time because they are involved in corrupt transactions,” he warned.
When it comes to the Amaila Falls and the Gas to Shore Projects, Gaskin argued: “We do not know, or we haven’t seen the numbers. We haven’t seen the data to show that these investments are feasible and viable. We haven’t seen it, but they want to go ahead and spend the money”. He added, “That’s how they are operating; they are not consulting with the people. They are too secretive about all of this and they are not giving you the facts so that you could study them”.
Instead, the Economist noted that the Government should consider directing funds towards reducing its external debts, as well as the creation of a stabilisation fund so that when the oil prices drop dramatically, it can tap into the fund to stabilise the price. The controversial Amaila Falls Hydro Electric Project was first proposed at an initial cost of US$450M— a cost that escalated in ensuing years to more than US$1B. The project is slated to bring on 165 megawatts of power. Meanwhile, the Gas-to-Shore Project could cost Guyana at the very least, US$900M. It is intended to add an additional 250 to 300 megawatts of power to the national grid.
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