Addressing a large contingent of private sector representatives from both Saudi Arabia and Guyana, President Dr Irfaan Ali impressed on them the need for collaboration and partnerships, including the forming of consortiums, where both sides can mutually benefit from investment opportunities.
President Ali gave the main address during the Guyana-Saudi Arabia Investment Engagement that was held in the dome of the Arthur Chung Conference Centre (ACCC) on Saturday. In addition to an over 60-member delegation of investors from Saudi Arabia led by Deputy Minister for Investors Outreach, Badr al Badr, Guyana’s private sector including members of the Private Sector Commission (PSC) was present.
“In the private sector, if you have a specific idea, today, that you can bring to the private sector and partner with them in a consortium, an opportunity that you see today…put the two private sector bodies in a room. Let us not do circular talks,” President Ali said.
“Put the two private sectors in a room and let us come up with five or six areas that we will move forward on. And then let us agree that we’re going to remove all the barriers in those areas… let us not work in a way that is circular. Let us identify the areas, and the priorities, and put together two working groups from the private sector and from the Government agency. And let us get this ball rolling.”
According to President Ali, in the same way, the Government has taken a decision to establish an embassy in Saudi Arabia, Guyana is also ready to accommodate the Saudi Arabians, with the grant of a piece of land for them to establish a permanent footprint. Additionally, he said that Guyana is prepared to house the Saudi Arabian Development Fund branch for the region.
“I’ve said to the leadership of Saudi Arabia. The Crown Prince. And I’ve said to the Minister of State, we are prepared to make the land available for you to establish your embassy for this region, in Guyana.”
“And I expect that within the next quarter, we must have positive movement on this. I’ve already established there are many additional reasons beyond investment and economic ties, that you should have a footprint here,” the President also said.
President Ali explained that work is already well advanced in Guyana establishing an embassy in Saudi Arabia. The President also said that the Ministry of Finance will be establishing a help desk for the Saudi’s.
Since the passage of the Local Content Act last year, the Government has said that foreign companies have been actively seeking out local companies with which they can form a partnership.
According to Vice President Bharrat Jagdeo back in May, the Government saw the passage of local content legislation as a way of making sure that Guyanese could reap the benefits of the oil and gas sector, though it is not limited to this industry.
The Vice President noted that even today, Guyanese individuals and companies are reaping those benefits and that foreign companies looking to invest in Guyana are actively seeking partnerships with locals.
“We had to get a legislative framework. We passed a tough law now, that created huge opportunities for Guyanese and Guyanese companies. And you should ask the people, the Guyanese companies here now, that the foreigners are busy now running them down. When they were treating them with disdain because now there’s a benefit to partnering with a Guyanese company.
The Local Content Act lays out 40 different services that oil and gas companies and their subcontractors must procure from Guyanese companies by the end of 2022. For instance, these companies must procure from Guyanese companies 90 per cent of office space rental and accommodation services; 90 per cent janitorial services, laundry and catering services; 95 per cent pest control services; 100 per cent local insurance services; 75 per cent local supply of food; and 90 per cent local accounting services.
These are just a few of the services highlighted in the first schedule of the Local Content Act. The Local Content Act mandates penalties for oil and gas companies and their sub-contractors who fail to meet the minimum targets of the legislation, as well as those who are in breach of the Act. These fines range from as low as $5 million to as high as $50 million.