Opposition insists law requires all state owned infrastructure to face parliamentary scrutiny

Jan 14, 2023 News

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…says US$1.3B pipeline not exempt

Kaieteur News – The Parliamentary Opposition, the A Partnership for National Unity + Alliance for Change (APNU+AFC) is insisting that Guyana’s Constitution requires all investment into state assets be submitted to Parliament for scrutiny and consideration.

The Opposition posits that the Government is mandated by law to have a national discussion and follow particular processes before purchasing even basic items.

With the Government of Guyana signaling its intention to fund the construction of a US$1.3B pipeline which will be built by the ExxonMobil, and eventually owned by the State, the Opposition is adamant that the same checks and balances requiring Parliamentary consideration is required for the pipeline project.

Economics and Youth Advisor at the Office of the Leader of the Opposition, Elson Low on Thursday said that the pipeline issue is one in which the APNU +AFC wishes to alert Guyanese.

Speaking at the Opposition Leader’s Press Conference, Low said that the project is the largest in the country’s history and there are already breaches of constitutional and parliamentary requirements that include funding for state owned projects as well as procurement.

Low reasoned that if the pipeline is intended to be Government owned, and  a national infrastructure, it must be financed through the national budgetary process.

He said “This process allows the existing oversight bodies to carry out their functions—first and foremost, the National Assembly, but also encompassing the Public Procurement Commission, Auditor General’s Office and Public Accounts Committee.”

Low noted that the Government is constitutionally mandated to ensure national discussions, public accountability, and transparency on such national infrastructure directly funded from the cost oil arrangement in the Production Sharing Agreement (PSA).

The Economics and Youth Advisor asserted that, “It is vital to draw a distinction between the offshore FPSOs, which ExxonMobil and its partners own, and a Natural Gas Pipeline that the Government of Guyana would own. If Exxon develops a pipeline that it owns and then costs recovers that pipeline, it is within its rights under the PSA. This is exactly the same process we see currently with the FPSOs.”

On the other hand, Low said if the Government of Guyana seeks to acquire that pipeline from Exxon, whether in whole or in part, it must approach Parliament for funding.

“Direct cost oil funding opens up the possibility that under the PSA, Exxon could be empowered to construct a wide variety of government-owned and operated public infrastructure projects, from roads to wharfs, completely bypassing Guyana’s existing laws and constitution,” he said.

To this end, the Economist said there are a number of pressing issues the Government must address including immediately making public the agreement it has made with ExxonMobil for the pipeline, in whatever form it exists.

He explained that the Government must state what law allows it to bypass the Natural Resources Fund Act and Consolidated Fund in this way and the Government must state what procurement procedures ExxonMobil will use in building this pipeline.

“The Government must state what law empowers Exxon to procure in a way that is not monitored by the Public Procurement Commission, which is also a constitutional body. We have tabled some of these questions in the National Assembly in the name of our Member of Parliament, Mrs. Volda Lawrence.

Further, Low said the Opposition intends to table a Motion for the National Assembly to call on the Government to release all contracts and agreements on the project and for the Parliamentary Sectoral Committees on Natural Resources and Economic Services to jointly review them in the public’s interest.

The Economist is of the opinion that if is not done, it opens the door to hundreds of billions of dollars being continuously borrowed and spent on infrastructure projects without Parliamentary oversight.

Moreover, he said Guyana would be saddled with costly oil bills that severely restrict the size of the Natural Resource Fund (NRF) and the nation’s ability to spend on health, education, and a wide range of public services.

Low explained that this is exactly what Hugo Chavez did in Venezuela, asking Petróleos de Venezuela, S.A (PDVSA), the state-owned oil company, to fund his “missiones” programs.

“These programs were awash with corruption, drained the nation’s resources and helped ensure Venezuela’s Sovereign Wealth Fund only had $3 million USD in its accounts as of 2021.”

He added, “Guyanese need to recognise that this project is in the hands of Vice President Bharrat Jagdeo who is accused of bribery and corruption and has not been involved in one successful project in his disastrous political career and therefore we are likely to have another failed project with wide-scale corruption.”

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• A Partnership for National Unity + Alliance for Change (APNU+AFC), Elson Low, Natural Resource Fund (NRF), Parliamentary Opposition, Venezuela’s Sovereign Wealth Fund, Vice President Bharrat Jagdeo

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