“What they did last week in Parliament, surreptitiously, at the last hour, after the Speaker said the business for the day has been concluded…they passed an amendment to allow now the $50B [Debt Ceiling] to be applicable for any loans that they take.”
Those were the words of former President and current Opposition Leader, Dr Bharrat Jagdeo on Wednesday afternoon as he chastised the Government for amending the debt ceiling which he believes will be to cover the $30B loan for the Guyana Sugar Corporation (GuySuCO) and another loan for the development of the new Demerara Harbour Bridge which they intend to take.
During the last sitting of the National Assembly on May 11, Government used its one seat majority to pass a motion that extends the ceiling for the State to guarantee debts, to up $50 billion, for any project upon which the Government wishes to embark upon.
While the A Partnership for National Unity/Alliance For Change (APNU/AFC) was in Opposition, it had rejected a motion to raise the debt ceiling to the required level with respect to the Amaila Falls Hydro Project and as such, the project was killed.
At his press conference today however, Jagdeo outlined that in relation to the Amaila Falls Hydro Project, the PPP Government was not guaranteeing a debt but was guaranteeing contingent liability; that is, the Government would have only become liable if GPL refused to buy the power or pay for the power bought under a Power Purchase Agreement.
Jagdeo said that by providing a Government guarantee through the Debt Ceiling amendment, the Finance Minister, Winston Jordan has shifted the liability on to the treasury.
His party in a press statement on the issue had said that the passage of the bill paves the way for Guyana to once again be on the road towards “financial and economic bankruptcy.”
In February, 2018, it was disclosed that the National Industrial and Commercial Investments Limited’s (NICILs) Special Purpose Unit (SPU) was seeking $30 billion in loans via a syndicated bond to support GuySuCo and its remaining estates.
The funding, it was outlined, would cover a four-year period and will provide capital, support infrastructure maintenance and upgrades at Albion, Blairmont and Uitvlugt.
The monies are also expected to go towards developing new co-generation capacity for the estate operations and the national electric grid.
Government has since secured this loan.
Additionally, in early April 2018, Finance Minister Jordan said that “Guyana has not received any loans from the Islamic Development Bank [IsDB],” however he noted that “the IsDB has a resource envelope of US900M that is potentially available from which the Government of the Cooperative Republic of Guyana can borrow.”
To this, Jagdeo was recorded in the media stating that the Coalition Administration was pawning the future of Guyana.
He said that the debt accumulated from 2015 to 2018, plus the 30 billion from Republic Bank, coupled with the US$900 million which PPP predicts that Government will borrow from the Islamic Development Bank, doubles the total debt which the PPP had left after 24 years in Government.
Government had also disclosed its plans of creating a new bridge over the Demerara river that will start at Houston, East Bank Demerara and end at Versailes, West Bank Demerara.
The project is expected to cost US$150M.
Today, the Opposition Leader asserted that he will be keenly observing these two projects.
“There are two projects we will look at extremely careful…this one, the $30B because we heard they collected an advance…they have not defined how they plan to spend it. There is no Board [of Directors] at GuySuCo…I don’t know who is borrowing all of this money for GuySuCO ….the next one is the [new Demerara Habour] bridge, which we see as a totally corrupt project…” (Ramona Luthi)