Introduction
It has been all quiet and stable on the business scene this past week, or at least what could make news. The column will resort to a number of issues which could not individually justify a column but together represent matters of some concern. One rather publicised issue was the appearance of the Minister of Finance Dr Ashni Singh with the Minister of Education Mr Shaik Baksh at a press conference to defend questionable contracts valued at approximately $300 million for the procurement of computers for schools.
The result was hardly what they would have intended. It was defending the indefensible. But please remember that this most recent contract is separate from the $5.4 billion for the laptop computers that have also generated concerns from beginning to end. One wonders whether this is why the PPP/C has made a joke of the constitutional requirement of a National Procurement Commission. If such a commission is established, the cabinet would have no role in the award of contracts and the country would be spared the extravagance and corruption we witness with each disclosed contract.
NICIL
Readers will recall that the Minister of Finance last year stoutly defended the award of the Amaila Falls Road Contract to Mr Fip Motilall – that time not for $300 million but $3 billion – ten times more than the school computers’ contract. The joke about road contracts is the building of a road to nowhere. In this case it is no road to anywhere, as far as Mr Motilall is concerned. Prominent in the award of Motilall’s contract was the Privatisation Unit headed by the ubiquitous Mr Winston Brassington, the Chief Executive Officer of National Industrial and Commercial Invest-ments Limited (NICIL), a company that enjoys corporate infamy even by Guyana standards for its failure to have audits and to file statutorily required Annual Returns for decades.
Despite this failure being raised on numerous occasions NICIL, whose directors are mainly ministers of the government, continue to receive public monies and to spend it however it pleases. It infamously played the role of handmaiden to President Jagdeo and his cabinet in the unlawful tax concessions to Queen’s Atlantic Investment Inc and has failed to provide properly audited financial statements for its expenditure of hundreds of millions of dollars of GGMC funds to build hinterland roads. It is at the heart of the proposed Marriot Hotel deal and indeed has been busy shopping around for any partner which would give the project legitimacy. No one knows where the funds will come from.
What is clear is that NICIL continues to receive public funds and late last month the Official Gazette (Legal Supplement) of June 25, 2011 carried fourteen Orders under which public lands were disposed of to individuals mainly in Linden, under agreements of purchase and sale in which NICIL was named as the seller.
One wonders whether the nest egg being built up by NICIL is for the Kingston Marriot which President Jagdeo wants to see before the elections – whatever the financial and other implications.
The Berbice Bridge Company
Some weeks ago, a group of courageous Berbicians joined in a protest at the high cost of traversing the Berbice River Bridge, demanding that it was time that something was done about it and calling on the Transport & Harbours Department (T&HD) to reintroduce the services of the pontoon MV Sandaka on a regular basis. The government has been less than responsive. To make the bridge feasible for the investors – many of them friends of the government – persons seeking to cross the river have little option but the bridge.
At the protest, persons complained that only the rich people could enjoy the bridge, describing it as “terrible” since the bridge was one of those elections promises to Berbicians. According to reports, individuals have to pay $100 to go to the Rosignol Stelling and wait a long time until the bus is full and pay $300 to cross. In all they pay $800 return and lamented that some persons who work in NA earn just $1,200 per day and are barely left with a little money. Security guards receive less.
One of the big defenders of the high fares is President Jagdeo who had told Stabroek News that especially for private cars and minibus operators crossing the river using the bridge, the one-time toll of $2,200 toll was cheap. Mr Jagdeo and his entourage never have to pay a cent so he would not know what is cheap or expensive. Unlike the Demerara Harbour Bridge, pedestrians and cyclists are not allowed to use the bridge. This would surely be what a low carbon economy would require.
With the range of concessions under the Berbice River Bridge Act surpassing those given to the Ramroops, one would have expected that these would have been seen as subsidies to be used to make the tolls affordable. Compare the toll between the two bridges: Cars – Demerara Harbour Bridge $100 while for Berbice it is $2,200.
Here is a summary of the concessions that the company and its shareholders whose names seem to be a state secret receive: Exemption from all the duties and taxes under the Tax Act; all imports of goods, equipment and services on design, construction, expansion, rehabilitation, repairs are exempt from taxes, import duties, purchase tax, consumption tax, motor vehicle taxes and all other taxes; and licence fees and other similar fees or charges. This applies to the concessionaire, contractor and subcontractor.
Other concessions are: Complete exemption for the concessionaire from corporation tax, income tax and withholding tax for the entire concession period; exemption from corporation tax, income tax and withholding tax of all dividends and interest paid. Additionally, all income earned by a contractor or sub-contractor pursuant to the Concession Agreement is exempted from income tax.
Like NICIL, the Berbice Bridge Company Inc, whose chairperson is Ms Geeta Singh-Knight of Clico fame, has not filed annual returns and financial statements since its incorporation, so we cannot tell whether the company is making money or not and if so how much. So much for the rule of law, transparency and good governance.
The PPP/C’s embrace of free enterprise
In a letter to the press earlier this week Mr Dennis Lee, an executive member of the TUF, claimed a pivotal role for his party’s leader Mr Manzoor Nadir in the PPP/C government’s adoption of the free enterprise system. That the statement has not been challenged by the ideological wing of the PPP is probably more surprising than the accuracy of the actual claim.
It is true that the government has practised a crude form of the free enterprise system in which major segments of the economy are at best poorly regulated and at worst allowed to run literally on illegal oil. Many of the nouveau riche actually started and or sustain their empire with illegal fuel, narcotics and customs evasion.
That key pieces of legislation including the Prevention of Money Laundering Act are poorly administered with none of the requisite resources to make them work is not free enterprise but abject lawlessness and deception. Indeed the TUF leader can take credit for his role in weakening the trade unions and in keeping the minimum wage of $800 per day for security workers.
But it is also true that despite his decades of railing against the IMF, Dr Jagan came to power in 1992 after he had given commitments to run with the Hoyte-inspired IMF- directed Economic Recovery Programme. The PPP/C under four successive Presidents including Mr Jagdeo who was Finance Minister to three of them comfortably ran with the free enterprise system so warmly embraced by Mr Lee.
It would be interesting to learn whether the new TUF leader Ms Valerie Garrido-Lowe shares Mr Lee’s exuberance over the free enterprise system. What she did tell me on Plain talk was that she would like to see a more compassionate system to take account of our present situation where the free enterprise system has widened unbridgeably the gap between the rich and the poor.
One might also question Mr Lee’s praise of Mr Nadir as the TUF’s investment in Guyana’s future and whether in fact the TUF was Mr Nadir’s investment in his personal future.