“Budget 2023 is simply a numbers budget, the PPP has a huge amount of money at their disposal, so they simply cobbled together some projects, and announced the country’s biggest budget ever. There are no policy statements in the budget, there is no planning or vision – most of the capital projects included were concretised and designed under the Coalition government, but they shamelessly seek to take the credit for the same” stated Opposition Member of Parliament (MP), David Patterson, in his contribution to the Budget Debate.
Landing salvoes after salvoes the MP continued: “Mr. Speaker, I would like to address an issue that the government keeps repeating, that is the life and death of the Amalia Falls project, this project was mentioned in all the government’s four budgets, however it is no way closer to commencement, with all efforts thus far falling short. It is time that the record is set straight, once and for all, not for members of the government side, but for the younger MPs on my side of the House, as well as the public.”
Amaila Falls
The MP supported his argument by outlying: –
- April 1998 – the PPP signed a MOU with Fip Motilall’s Synergy Holdings Inc (SHI), to undertake feasibility studies at the Amaila Falls.
- December 2001 – SHI submitted its report to the government and requested the issuance of a license.
- July 2002 – an interim license was issued to SHI, despite an adverse report from Kaehne Consulting Ltd about the soundness of the project.
- October 2009 – Synergy Holding Inc. transferred their interim license to Sithe Global.
- March 2010, the PPP received four bids for Amelia Falls access road and awarded the contract to SHI. for US$15.4M, even though this company had no previous road building experience.
- January 2012- SHI contract was terminated in having only 30% of the works completed.
- September 2012, the InterAmerican Bank (IDB) issued a mandate letter, however, it was subjected to certain caveats mainly on the financing and technical viability of the project,
- August 2013 approved the passage of the Hydro Electric Amendment Bill as well a Motion raising the debt ceiling to G$50B instead of the G$130B as requested by the PPP, however it was indicted that once the issues raised by the IDB, the opposition was willing to raise the debt ceiling to the requested level.
- Sithe Global withdrew from the development of the Amaila Falls project the next day.
Patterson told the House last Thursday “the project was never approved by the IDB board and all that was agreed was for the IDB to assist the GoG in sourcing finance – the IDB were unwilling to put any money in the project. The World Bank were approached, and they flatly refused to touch it with a barge pole.”
The House was further advised: –
“July 2015, a review of the project was conducted, where information once deemed “too confidential” to share with the opposition was provided – we were told that the project would cost US$858M, and before this the PPP was going around saying that when competed electricity costs would be reduced to 10¢ , but the tariff would cost the Guyanese public 25¢ – and the reason for the hydro, from cheap electricity to “a flagship of the LCDS.”
That’s not the end of the issue, Patterson said, “We then discovered that in addition to the US$858M, the country would be required to pay an additional US$134 CAPEX for GPL, US$40M to buy down the equity for the sponsor plus US$3M for relocation of residences and structures (70 persons) – taking the project to over US$1B and moving the tariff to around 30¢”
“• Mr. Speaker, in December 2016, in association the Ministries of Finance and Natural Resources and the Ministry of Climate and Environment of Norway, a review of the project was done by Norconsult was done, which stated that “AFHP was prioritized as the first hydropower plant because it was the only with full feasibility study completed” – because for the PPP it was Amalia or nothing.”
The MP pointed out that the Ministry of Climate and Environment of Norway sent a delegation of their top technical offices to Guyana in 2018, who met with the Government and the IDB regarding the US$80M funds. “The Norwegian team, came with the belief, as the PPP were shouting that AFHP was Guyana’s only option. GoG, presented our proposed energy transitional plan, they visited various locations, held discussions with stakeholders – at the start of the third day, the team leader announced they had an “epiphany” – discarded support for the AFHP and fully endorsed the ANPU+AFC energy transition plan.”
He elaborated that the APNU+AFC plans was to utilize the US$80M for 30MW of solar farms with 8 hours storage, despite those efforts of the PPP, the Government of Norway has refused to allow this money to go towards the AFHP – that is the project that’s included in this budget, which they are now boasting.
“Mr. Speaker, the AFHP was not killed by the opposition, far from that, it was still born, it died from malnutrition – a lack of financial and technical sustenance as well as bad parents…having resolved this issue and demonstrated that the PPP are incapable of conceptualising and successfully executing any major project, but are good at blaming others for their failure, allow me to address Budget 2023,” he added.
Coalition Government made Production Sharing Agreement possible
Pointing out that the Minister of Public Works, Juan Edhgill in his presentation in focusing on the size of his budget for Miscellaneous and Urban Roads, made light of the sum available to the then Ministry of Public Infrastructure compared to now was made possible “solely based on the production agreement signed by the APNU+AFC government.” Patterson said it is the very agreement which the PPP criticised and promised to renegotiate, if they were returned to power, a promise which they have not kept.
He noted that it was the coalition government that established the Special Projects Unit (SPU), in 2015 on assumption of office.
He mentioned, “All that was in place was a small unit called the Force Account Unit under the direction of the Permanent Secretary, at that time, this unit’s only responsibility was to provide general emergency services – patch a hole or two, fix a plumbing leak and repair a leaking roof.
“The creation of the SPU was done under the leadership of Hon. Annette Ferguson, in 2016, 2017 & 2018, the Coalition government purchased more than G$450M worth of equipment every year, increased the staffing twofold, with engineers, semi-skilled and unskilled workers, placed it under the direction of the Work Service Group, and made it what it is today.”
He noted that whilst Edghill announced the SPU completed several kilometres of roadworks, during 2020 – 2022, compared these against the coalition record, with a fifth of the budget the coalition did more.
“Less money, more work at a better quality, excellent value for money,” he said.
M.P. Patterson also spoke about sea defence.
“Mr. Speaker, the Minister also boasted on the sums of moneys expended on sea defence by the PPP [but]that since coming to office, his Ministry has completed 5.4km of new works, rehabilitated 1km of sea defense and maintained 81.8km of sea defense – this to loud applause from his colleagues, once again the devil is in the details.”
He then compared it to the APNU+AFC (2017 – 2019) track record. Below are projects executed by the coalition, shared by M.P Patterson.
13.83km of new works.
50.3km of rehabilitation works
253km of maintenance works.
“Chalk to cheese, value for money, prudent spending – no kickbacks for the boys. And for added measure, we also completed the Supernaam waterfront development – the PPP never had such vision! …[the coalition government] did so much more with so much less, and at a higher standard. Mr. Speaker, the Honorable Minister, spoke about the extent of Urban roads completed during his tenure, once again, we are grateful on behalf of the citizens of Guyana, for all infrastructural works,” he posited.
Again, the M.P shared details, done by the coalition and compared it against the PPP/C government.
“Mr. Speaker, in the last three years 2017 – 2019, the APNU+AFC administration, completed 58km of roadworks in urban areas, compared to 28.13km of urban roads under the stewardship of these two Ministers. How’s that for ‘lethargic and do-little state’ as claimed by the Minister.
Mr. Speaker, one might be wondering why this little attention or lethargic approach by the PPP to our urban areas, however one just must look at the voting patterns in urban areas to understand the citizens that are not being served under the “biggest” budget ever!” he stated.
APNU+AFC did more for infrastructural development with less money
Further he stated, “Mr. Speaker, the Minister of Public Works mentioned the sum of moneys available to the coalition administration for miscellaneous roads as opposed to the sums disbursed to his ministry from 2020 – 2022; the then MoPI received according to the Minister G$8.522B as opposed to G$45B. Mr. Speaker, I will admit that total roadworks done in these areas exceeds the coalition achievements but as always the devil has always been in the details.”
The M.P stated that the coalition constructed approximately 165 km of roads during 2017 – 2019 at a cost of approximately G$46M/km, while the PP is paying approximately G$92M/km, more than double the cost per km, for half the quality of work.
“Mr. Speaker, what makes this worse, is that for 2022, only fifty (50%) of the roads were completed under this programme, so of the 290km that the Minister boasts about, only 160km has been finished – the remainder has been rolled over to 2023. The ministry can’t even spend the sums allocated to them, yet we are giving them even more funds – money for the friends, family, and favourites. As the saying goes – the boys are back in town,” he noted.
He continued by stating, “It would have been natural to expect that with the huge increase in funds under this programme, that the Ministry would have been increasing staffing complement to supervise the additional work, quite the opposite, an examination of the staffing details shows that reduction in staff for all categories of technical staff.”
“That would explain why I took the Ministry eight months and a personal visit by the Minister to discover that a contractor, after collecting his advance, never one day turned up on the site. Of course, we were not surprised to learn that the contractor was a cousin of a PPP Minister.
“Mr. Speaker, this ministry should be renamed the Ministry of Friends, Family and Favourites, since every friend, family or favourite has been awarded a multibillion contract, no matter your experience.”
The MP expounded that:-
- In 2020, you were a race car driver, no worries, you will be awarded a contract under the Ministry of Friends, Family and Favourite.
- In 2020, you were a dealer in gold and other metals, no worries, you will be awarded a contract under the Ministry of Friends and Favourite.
- In 2020, you were a Joker on social media, no worries, you will be awarded a contract under the Ministry of Friends and Favourite.
- In 2020, you were a dancehall promoter, no worries, you will be awarded a contract under the Ministry of Friends and Favourite.
- Your son, daughter and wife never build a road before, no worries, you will be awarded a contract under the Ministry of Friends and Favourite,”
He noted that CLAUSES 39 and 52 of the Procurement Act – allow for objections by the procuring entity.
“The resurfacing of the Linden/Soesdyke Highway designed was completed by the Coalition in 2019, the funding was secured by the Coalition Government since 2018, with a US$900M envelope from the IDB. There were no ‘shovel ready’ projects in place in 2015; here are some fully completed projects in the Ministry, which no doubt they will bring out later and try to claim:-
- Upgrade of Lethem airport to international standards.
- New stelling at Parika
- New Stelling at Georgetown and Vreed-en-Hoop.”
“The Government will want to respond by saying that complaints about these strange awards should be directed to the Public Procurement Commission [PPC], sadly this constitutional body has been comatose for the last eight months, they have not launched a single investigation, not even requested a meeting with NPTAB or any Ministry.
In fact, the MP stated, in the eight months since PPC was established, the hardest task undertaken by the PPC was to decide what food and wine to order for their Christmas party at the Marriott.
“.. the Honourable Minister of Public Works in his presentation…, provided a report on the achievements of the Transport & Harbours Department, he indicated that all their liabilities have now been cleared. On behalf of the staff of T&HD, I would like to commend the government for their actions, however, what the Minister did not say is that the PPP was cleaning up the mess that they created,” he pointed out.
Liabilities of T&HD
- End of 2013 – G$296.4M
- End of 2014 – G$258.6M
- End of 2015 – G$195.4M
“At the end of 2015, NIS was owed G$31.6M and GRA – G$78.5M; all unpaid and passed down from the PPP government,” he added.
“Mr. Speaker, the PPP now wants to take credit for cleaning up their mess, trying to be congratulated for finally resolving their poor handling of the department. The APNU+AFC administration started to address this deficit since 2015, reducing these arrears by G$63M in just 6 months – moreover, by the end of 2019, this arrear was under G$80M; under the APNU+AFC T&HD signed a partnership agreement which earned the department an additional $120M per annum. Mr. Speaker, most if not all the monies that the Minister paid off, was incurred once again under his watch,” he noted.
Patterson said the coalition is pleased to hear that there are currently 116 Guyanese now employed on this roadway, however contrary to the Minister’s statement, these citizens owe nothing to the PPP, but everything to the vision and foresight of the APNU+AFC administration.
PPP government taking credit for work of APNU+AFC government
“This is yet again another case of the PPP trying to take credit for our hard work. Mr. Speaker, the project currently being executed was designed, packaged, and financed by the APNU+AFC, lock stock and barrel; the funding was secured in 2015 via a grant from DFID and a loan from the CDB, the design consultancy was conducted by Mott McDonald, UK and completed on December 14, 2019, and an international tender issued in 2020.
“In fact, as I would have stated publicly since 2019, the VP when he was the opposition leader, informed DFID, that if the PPP were successful in the 2020 elections, they would be cancelling this project – fortunately for the 116 workers and the rest of the country, our British counterparts stood firm, advising the PPP is they cancel this project, DFID would withdraw funding all together,” he stated.
He mentioned that “The designs for these bridges [WISMAR AND KURUPUKARI BRIDGES] have been completed since the end of 2019, public consultations would have been done with the citizens of Regions 10 and 8, all of whom gave their inputs, which were incorporated into the designs, the Iwokwana Reserve also provided their blessings and permission for the river crossing thru their reserve, yet to date no works have commenced, clearly demonstrating that this is not a priority for the PPP government, despite having access to billions.”
“The Honourable Minister was proud to announce that the PPP was building new offices to house 6000 workers, away from the congestion of the city, what he did not say, is that nowhere in the PPP manifesto, or any other document they ever produced, this project mentioned. Where did they get the idea from – the coalition 2017 – 2025 Infrastructural Development plan. Cabinet approved plan, publicly circulated document, they are following our plans wholesale without providing credit. Another example is the sands hills to Morikioa road linkage,” said the M.P.
“The APNU+AFC had a comprehensive energy diversification blueprint in place, and the PPP have been slavishly following this plan and shamelessly seeking to take credit. In fact, save and except the remodelled gas-to-shore project, all the energy projects, have been conceptualised, designed, packaged with funding by the APNU+AFC administration…the 1.5MW hydropower facility and the 700kw Moco-Moco rehabilitation projects mentioned in the budget, was fully conceptualised, designed including sourcing funding by the Coalition administration. So too was the 1.5MW solar farm in Bartica and the 0.75MW farm in Wakenaam, as well as the solar farms in Lethem, Madhia and Linden, as well as the solar panels to hinterland communities – all fully conceptualised, designed including sourcing funding by the Coalition administration,” he was quoted saying.
The M.P continued saying, the PPP is visionless, possessing no useful and progressive ideas, but like parasites, they exist from others vision and energy.
Gas-to-shore and energy management
“The coalition administration included a gas to shore project in our energy expansion and diversification blueprint, our proposal was to construct a 200MW natural gas powered connected to the FPSO with a 12” pipeline, which also included LPG plant – all for the total cost of US$700M. Our proposal included everything single accept of the PPP Wales gas to shore at 25% of the cost. The same operator (Exxon) would have been constructing the pipeline, the size of the pipeline remains the same, the size of the LPG plant is the same – the only difference is the location and the PPP – these two factors have combined to add an additional US$2B and counting to the project.”
And, “in similar fashion to the AFHP, the PPP has announced that when completed this project will deliver power at a cost of US5¢, based on the costs for the pipeline, and the power plants, but have excluded costs for land acquisition, GPL infrastructure and as well costs associated for providing redundancy (fuel storage/wharves/etc.) – if these are added the total project costs will be well over US$3B.
The country is none the wiser on: –
- The gas to sale agreement signed with Exxon.
- The costs associated with the operations of the LPG and power plant operations.
- Inland transportation of the LPG.
- The necessary transmission grid upgrade.
- Transmission lines crossing over the Demerara River
- Oil spill plans
- Waste Management Plan
- Gas leak Management Plan
- Gas dispersion Patterns in the event of any gas explosion
- Insurance coverage and liability.
And the government, still wants the people of Guyana to accept that this will not be another white elephant project just as the Skeldon Sugar Factory and the Fibre Optic cable project.
He also spoke about Exxon making another discovery but that brings no joy to the people.
M.P. shared several facts below:
- Still no audits of the pre contract costs – despite Exxon accounts showing these amounts have been overstated by US$100M
- No completed audit on the post 2016 costs, despite repeated promises.
- No limited liability coverage
- No Petroleum Commission
- EPA cannot provide a report on a single barrel of oil spillage.
- The Local content Act is not completely effective, despite the opposition’s offer to send it to a special select committee to ensure that Act would be impactful.
- Exxon continues to flare above the permitted levels
“Mr. Speaker, of concern to us in the Opposition is the announcement that Guyana expected oil lifts for 2023 will only be 23 lifts. Mr. Speaker, in 2018, Exxon provided the Government of Guyana, with a cash flow analysis for Liza 1, which stated that the costs for production (FPSO and other costs was pegged at US$4.4B in 2018, but was finally completed for $3.4B), and after this cost has been recovered, Guyana share would thereafter by 50/50 – based on producing 120K per day, at US$70 per barrel, this payback period would have been four years commencing 2020.
“Exxon has since increased production on Lisa 1, by 20K per day to 140K barrels, a sixteen (16%) increase – additionally, oil companies have been making a windfall based on high oil prices for the last two years – it is expected that these two factors combined, would have resulted in Exxon fully recovering their production investment, and on the Liza 1 project, the country would now be enjoying 50/50 share of profit oil. This is not the case, the Government should inform this House on the status of oil recovery of the Liza 1 project, and when are we expected to commence full equality share on this project,” he said.
In concluding he said, “the Opposition will support the government in defining constitutional reform provisions that would result in a bipartisan approach to addressing our national challenges and opportunities, we will support new systems of governance which would facilitate an equitable distribution of our national patrimony. We will support any budget that just does only look good on paper but will actually input the standard of living of our people in a real and tangible way – unfortunately Budget 2023 falls short of these modest measures and cannot gain our support in its current format.”
