By its shadowy and opaque standards of governance cemented over the last 15 years or so, it came as no surprise that the PPP government stealthily signed a deal with a local contractor to “rehabilitate” the controversial fibre optic cable project. Whatever the real intention, this contract translates into the wholesale handing over of a valuable and sensitive, even if degraded, asset for the unlimited use by this investor without a clear idea of the cost to the government and as to whether there would be any benefit to the consumer.
First, as was pointed out by Mr Ralph Ramkarran yesterday in his blog carried by this newspaper, even the most elastic of the conventions governing what an outgoing administration can do in the period just before elections will prohibit the striking of a deal such as the one fashioned on March 16, 2015 with the company Dax Contracting Services Ltd, about whom not much is known. On these grounds alone, this deal should be immediately placed on hold with the intention of repudiating it. Legislation is clearly needed early in the life of the new administration to tame the abuse of state resources in the election campaign period and to define the degrees of freedom with which it can operate in the striking of commercial deals.
Second, and of particular importance in establishing accountable government, this “deal” manages the astonishing feat of completely ignoring where responsibility lay for the decrepit state of a much-vaunted project which was the brainchild of former President Jagdeo. Under no circumstance is the expenditure of taxpayers’ money in a wasteful or reckless manner to be countenanced and then without explanation. In addition to whether this project was even necessary considering the cable capacity that already exists in the country, was the procuring and laying of the cable done in a haphazard and unprofessional manner leading to it being exposed at several points and breaking? Who was responsible for this and who should be held accountable? It won’t escape the awareness of the public that the person in charge of this project is Mr Alexei Ramotar, the son of President Ramotar, and that there should be full accountability on his part and a review of his role in the entire project.
Third, there is the not inconsequential matter of the cost of this project. Very often one is unable to get a clear fix on the base value because of the intertwining of projects by the government and conflicting allocations from year to year. This project was a coalescence of the fibre optic cable, the one lap top per family project and the e-government initiative for government agencies and ministries. When disaggregated, the government must say clearly what the cost of the cable is combined with the enterprise for laying it from Lethem to Georgetown. That will no doubt run into billions of dollars and this is the figure that the government has to account for not to mention the value of the lost time over which the project has not functioned. The project has been delayed by several years.
Enter the contract with Mr Faisal Mohamed. He was able to craft this deal with the government as he had been one of the contractors in the laying of the cable for this now hobbled project. How come Mr Mohamed was selected? Did he approach the government? Did the government approach him? Why wasn’t a tender placed by the government for the expression of interest in rescuing this project. It could very well be that the government was aware of the flak that another monumental failed project under its rocky tenure would attract particularly in this election season. This is no doubt why it hurriedly sealed the deal two months before the elections and also accounts for the harsh language by Dr Luncheon on Thursday in defending the deal and attacking the media. This deal is indefensible but Dr Luncheon would be well aware that the best form of defence is offence.
How could what is essentially a repair contract on a botched cable-laying job be transformed into a deal where Mr Mohamed will use and maintain the cable, its repeater stations and the equipment for a period of 25 years with the option of a renewal for 15 years? Despite the protestations of Dr Luncheon, this is a 40-year assignment. What entrepreneurial alchemy is this? Does Mr Mohamed have experience using such a cable? It doesn’t seems this way as he had been only contracted for the laying of the cable. What then would Mr Mohamed do with the cable? Would he on-sell or subcontract his rights as has been frequently done in previous PPP/C deals? Isn’t it ill-advised to be consigning the cable or any part of it to this investor considering the security sensitivities? Is Mr Mohamed adequately resourced for the job or is there the possibility he would declare incapacity, with the cable then falling into the hands of others? Clause six of the agreement seems to envisage just that. It states that Dax “will be free to enter into a joint venture agreement with any other company or entity so as to execute this agreement”. Why would the government enter into a deal with an investor who will clearly not be there for the long haul? Is there some silent investor behind him who should have been declared in the first place?
As part of this staggering deal, Dax will also benefit from “applicable” tax holidays, remissions and waivers. The company will also be favoured with duty-free concessions on the importation of equipment, spares and vehicles.
For all of this, Dax is then to provide “maintenance services”. There is no known fiscal agreement detailing what Guyanese are to expect and even more puzzling is clause 8 of the deal which says the government undertakes to contribute financially to the cost of “specific maintenance service of an emergency nature according to an approved formula”. How much money could possibly be involved here considering that this was meant to be the primary responsibility of Dax. What on the other hand could be the estimated revenue for Dax from this investment by the government on behalf of the people?
The fibre optic cable represents yet another gross failure of government conceptualising and management. It is one project where they constant harangue about opposition budget cuts post-2011 cannot even be raised. It represents a shameful squandering of money which must be redressed but not via, as the WPA has said, a wholesale giveaway.
