Govt. spending millions $$$ to police waterways for oil companies 

Apr 23, 2023 News

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 …but receiving pittance from industry due to lopsided contract – Glenn Lall   

Kaieteur News – Government’s investment in purchasing pilot boat to provide added security to ExxonMobil and other oil companies operating here is seen as excessive given that the country’s profits from the oil could hardly compensate for such high spending.

 

Last week President Irfaan Ali commissioned a $535M pilot boat which will cost taxpayers a further $20M annually to maintain, according to Public Works Minister, Juan Edghill. With Guyana’s meagre profits from its oil, given the lopsided nature of the Exxon contract – many have questioned the investment.

The vessel PD Arapaima was custom-built for MARAD by Ocea Shipbuilding Limited in France. The 14-person vessel is built from aluminum. Speaking at the event, President Ali pointed to a number of measures that he said his government is implementing aimed at completely transforming local maritime operations. He noted, however, that the acquisition of the PB Arapaima is just a small step in a series of larger efforts to mitigate difficulties being faced in the sector. “We have aging assets. Bad decisions in 2018 by the last government led to the acquisition of what was supposed to be a new asset for just around $300 million. One year afterward, we spent more than $300M on spares, and that takes it to about $600-plus million. That vessel is costing us about $50 million annually to maintain,” President Ali explained. He contrasted it with the new, improved acquisition, highlighting that this vessel is much more efficient for the purpose it was purchased for.

“This vessel, on the other hand, was acquired at $535M, one-year free maintenance on warranty, and from the second year, it is anticipated that will cost no more than GY$20M in maintenance [annually]. It will also utilise 30 percent less fuel than the current fleet. That tells a story by itself,” Dr. Ali underlined. The President also congratulated the management and staff of MARAD on the acquisition of the vessel, iterating that it is a continuation of the administration’s efforts to give MARAD a fleet of modern reliable, fuel-efficient vessels capable of serving the needs of the shipping industry, and facilitating a modern marine sector.

Guyana retrogressing  

Meanwhile, analysing the investment in the vessel against the background of its intended purpose, oil transparency advocate, Glenn Lall said first of all the country could have gotten a better boat for less than $100M. “But that’s not the issue, corruption has long been under Jagdeo’s leadership, it’s a way of life in Guyana and it gets worse as the days go by. You either live with it or fight it and that’s what me and my team here have been doing ever since,” Lall who is also the publisher of the Kaieteur News told listeners to his Friday night show.

He said Guyana received a mere US$162M from its oil between January and the end of March in profits from Exxon and yet it was taking out tax dollars to buy a boat to police the increasing traffic out in the Atlantic Ocean. “According to President Ali, the 14 new oil blocks that have been placed on auction will create traffic so they have to spend $535M to buy a boat and pay people to work 24 hours a day to police the traffic out there, not the 600 oil blocks that ExxonMobil where all the oil is, but the 14 new oil blocks, where there is no certainty of its oil potency,” Lall told his radio and internet audience. He said the profit with royalties Guyana currently receiving from its oil will finish on the said boat alone. “We barely getting a little crumbs from the oil, and now we have to spend it to police the oil industry – this is what you call running the government like a business, not like a cake shop.  You getting two mangoes from your mango tree in the year, now you got to build guard hut and pay security for the people who thieving the mangoes – how do you explain these things? I don’t know,” Lall exclaimed. He further stated: “They done borrow US$2.5M and use that money to clean up the ocean floor in front the mouth of the Demerara River for free passage in and out for the supply boats to the oil ships, you people don’t have a clue where this country is heading with your future, and the President is so proud to go cut ribbon for a boat and for a forklift the other day. God bless you and God bless Guyana,” Lall said lamenting.

At the commissioning of the vessel, Minister Edghill, highlighted the important role the maritime industry plays in the economic growth and development of the country and cited the increasing amount of maritime traffic and commerce taking place. “It is crucial that we have effective systems to ensure that everything is running smoothly and safely with the latter being paramount, and this is precisely why this vessel was acquired. Safety in our waterways is something that is of utmost importance to this government. And in keeping with its mandate, MARAD is working to ensure that people employ safe practices,” he stated. Minister Edghill noted that the PPP/C government’s continued commitment to the people of Guyana is demonstrated by the substantial investments being made in the sector. “We will continue to build on what we have started as we acquire new vessels to advance our work. In addition to infrastructure, emphasis has been placed on the training of our staff to man these vessels, to keep our operations running smoothly, and in compliance with international best practices. With this new vessel, the time for pilots to embark and disembark will be cut by 75 percent and this is just the beginning of great things that will be accomplished with the pilot boat Arapaima,” he added.

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• Irfaan Ali, Juan Edghill, President, Public Works Minister, waterways

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