This letter was submitted to the Guyana Chronicle as a response to an extensive article captioned, ‘Finance Ministry slams Christopher Ram’s latest journey of speculation and misleading statements.’ Seven days after it was sent in, it still has not appeared.
The only reason I can think of for the three-page April 20 response by the Ministry of Finance (which appeared in GC on April 21) to my letter appearing in the Sunday Stabroek and the Kaieteur News of April 18 is that my exposure of the corrosive effect of first and second generation corruption, conflicting actions within Low Carbon Development Strategy (LCDS) policies, the questionable award of the Amaila Falls Road Project contract to Synergy, a mini-company owned by a political friend, Mr Fip Moitlall, the dubious role of the politically-directed National Industrial and Commercial Investments Limited (NICIL) and the repeated, costly and embarrassing mistakes by Finance Minister Dr Ashni Singh, has made many personally uncomfortable, to the extent that a rancorous public rebuttal became necessary. I refuse to reciprocate by descending to that level. Instead, out of respect for the Guyanese public’s right to the truth, I will rebut, point by point the April 20 diatribe by the Ministry of Finance.
The ministry challenges me on the LCDS implications of the NICIL-awarded road contract given to a friend of the political family, so reminiscent of another such case involving the Ramroops, friends of the President. In that case, tens, and possibly hundreds of millions of dollars of tax concessions, rent reduction and other benefits were engineered for the Ramroops by NICIL whose board is chaired by Dr Singh.
In a famous misunderstanding of the law, the concessions were subsequently approved by Cabinet and granted under the hands of the same Dr Singh.
When Mr Yesu Persaud asked for such concessions to be made widely available, President Jagdeo publicly abused him, directing NICIL’s CEO Winston Brassington to lecture Mr Persaud about the tax laws. Two days after Jagdeo’s abuse, in Business Page I examined for readers the relevant concessions legislation and pointed out that it was the President, Drs Luncheon and Ashni Singh, Messrs Winston Brassington, Geoff DaSilva and the entire Cabinet and Board of NICIL that needed some tax education. No one should harbour more embarrassment from that exposure than Dr Singh who, wearing three different hats, should have been aware of the provisions of the legislation and of the extent of his powers to grant such concessions. Synergy seems to be a case of history repeating itself.
Neither of the two drafts of the LCDS contains any calculation of the carbon emissions from the construction or operation of any of the development schemes outlined in the second draft.
Under the Guyana-Norway Agreement, there are two penalties which could apply – one for increasing deforestation, and the other for the timber cleared for the access road to the dam site. How I arrived at the USD 14.2 million for a road-associated potential penalty is technical and takes up valuable editorial space.
I have posted the details on my website chrisram.net (see box below), but I doubt that the Ministry of Finance is concerned about facts and figures.
| Note on Penalty calculation In the two drafts of the LCDS there is no calculation of the carbon emissions from the construction or operation of any of the development schemes outlined on pages 25-36 of the second draft, December 2009. It is not possible to derive the Ministry’s statement today from the single paragraph on Amaila Falls on page 25 of the LCDS document. Under the Agreement, there are two penalties which Norway could levy. One penalty is for increasing deforestation, and one penalty is for the timber taken off the upgraded 85 km and new 110 km of all-weather access road to the dam site. The 110 km of new road would generate 0.19 MtC (million tonnes of forest carbon). The MoU values the forest carbon at USD 18.35/tC, and the penalty rate is four times the value, so the road-associated penalty is USD 14.2 million. This penalty is due if the deforestation from the roadworks pushes our total for 2009-2010 above the generous Norwegian allowance of 0.45 per cent of total forest area. As the draft LCDS does not discuss the deforestations associated with the development projects listed on pages 25-36, and the President’s Office of Climate Change has issued no calculations, we should be prudent in pointing out this hazard. Whether or not the road does cause that excess deforestation, the second penalty may apply. Under the MoU, the total timber extraction should not exceed the mean national total for years 2003-2008 (total extracted volume, in table 2 on Enabling Indicators of the Norway-Guyana MoU and Joint Concept Note). That mean total is 481,226 m3 and includes raw logs, roundwood (poles and posts), and chainsaw lumber converted to its roundwood equivalent with the conversion factor of 0.4 used by the Guyana Forestry Commission. If the logs from the roadworks do not lead to log production rising beyond that agreed limit, then is log production elsewhere in Guyana being limited to make space under the limit for the Amaila Falls road logs? No agency in the government, nor the Forest Products Association, has indicated an intention of localised restrictions on log production. Page 39 of the LCDS indicates presidential assurance that large-scale loggers can continue their business-as-usual. |
If they were, they would also take note of Janette Bulkan’s letter published by Kaieteur News on March 29, in which she pointed out that the Environment Impact Assessment (EIA) of 2002 on the Amaila Falls project available on the website of the Environment Protection Agency was for a much smaller project.
The document acknowledges that an expansion of capacity would require a fresh EIA, but that would get in someone’s way.
Further, the ministry’s attempt to confuse my stated concern about the Synergy road contract with hydro is artful, and even dishonest. The two are clearly separate but have come to represent the modus vivendi of this ministry in particular, and the government in general.
As a private company, NICIL is not subject to the stringent rules of the Procurement Act and the Fiscal Management and Accountability Act (FMAA). It is subject to lower standards of accountability under a political board that includes Drs Luncheon and Singh and Messrs Robert Persaud, Geoff DaSilva and Winston Brassington. To divert attention from “NICIL/ Government,” the Ministry of Finance in its April 20 statement conveniently introduces the Ministry of Works, which was not once mentioned in the Amaila Project Request for Proposal issued by NICIL.
That unholy combination is not unlike the Privatisation Unit/NICIL hybrid, which allows it, chameleon-like, to be and act like a government department when it is convenient, as in this case, and like a private company when it does not want the constitution, the FMAA and the rules of accountability to apply.
Let me correct some of the other issues which the Ministry of Finance chose to distort.
Queens Atlantic
I had objected to the illegal concessions granted to that company. To the extent that a person fails to honour his/her investment commitment, the concessions should be revoked. The only investment of substance by QA has been the newspaper which was not even included in its investment proposal seeking the hundreds of millions of concessions. But if the Lord gives, who else dares take back?
The Berbice River Bridge
My objections were all of a financial nature. They were:
(1) Winston Brassington’s attempts to have me withhold a Business Page article for one week. It turned out that he needed that week to get the Roger Luncheon-led NIS to invest in the bridge.
(2) The massive tax concessions given to everyone involved, even tangentially, in the bridge.
(3) The fact that despite these concessions, a Berbician car owner pays twenty times as much to use the Jagdeo Bridge as his Demerarian counterpart pays to use the Burnham Bridge. I did not realise at the time that unlike the Burnham Bridge, cyclists and pedestrians in Berbice could not cross their bridge.
RUSAL
In negotiations led by the President and Mr Brassington, we have given away our bauxite to a company owned by a Russian oligarch Oleg Deripaska, a man with a reputation for strong tactics and for lavishly entertaining foreign officials, and who like some of our own top people, has had his own visa problems. (See London Guardian, October 31, 2008.) RUSAL is now actively engaged in union-busting in Guyana and yet earns the tacit admiration and undisguised support of this administration.
Arising out of its secret negotiations with President Jagdeo and Mr Brassington, RUSAL has been granted exemptions from just about everything, including the bauxite levy.
But to divert attention, the Ministry of Finance chooses to speak of jobs. As if Mr Deripaska came to Guyana to provide employment, rather than obtain free bauxite for his Russian plants, acquired under circumstances that can still excite!
Finally, let me remind the Finance Minister that I have challenged his knowledge of the sinister history of the VAT rate, conflicts of interest involving his ministry and the Audit Office, and his veracity in the National Assembly over a $4 billion payment to GuySuCo. No space was found in his ministry’s three page production to enlighten citizens on where he stands on any of the issues raised, or, on where any of the issues raised stand.