Dear Editor,
I could not agree more with Lincoln Lewis (Stabroek News, May 15) that “The Linden issue is not about electricity.” And not only I, for, indeed, those were also the words spoken by APNU leaders in the meeting with President Donald Ramotar and the PPP/C team, and it was that sentiment which led to, and is reflected in, the menu of measures in the Statement that I read in Parliament. Read that Statement again – opening up radio and TV in Linden (and across all Guyana), the early reactivation of the LEN Fund, taking WOW and other funds and programmes to Linden – all to remove a sense of isolation, restriction and constriction in Linden (in comparison with citizens elsewhere in our country) – freedom to look at Channels 9 (HBTV) and 6 (CNS), and to encourage and facilitate entrepreneurship and enable Lindeners to venture into starting businesses for self-employment and employment of other Lindeners. Yes, leaders represent their people, but leaders also have to lead! And the leadership offered in the Statement that I read in Parliament, was good leadership! It was not different from what Mr Linden Forbes Sampson Burnham affirmed in Linden, in July 1976.
Allow me to clarify some assertions of Mr Lincoln Lewis, about the course of events of the bauxite sector.
I am hesitating to contest with Lincoln his recall about what I said at the GAWU Conference, about getting bauxite back to 700,000 tonnes RASC, and commercial production of GUYCOR 93 and GUYMUL. I might have said that it would be desirable, but a great challenge. That would have been more in character. I have always been a realist, and Lincoln has often been painting me as a prophet of gloom and doom for the bauxite industry. Similarly, I hold to what I said about the 69kV electricity link between Linden and Garden of Eden, but I hesitate to contest with him. We would need to establish when last electricity was sent from Linden to Georgetown. We would need to find the relevant operating records, or reports, of the 1990-1994 period, but who can find them now?
I maintain that the instruction, in 1983, was to submit proposals for the reduction in workforce numbers by one third, some 1,800 to 2,000 workers from all levels, and that did happen. There were three general foremen in the Laboratories Department – one was retrenched, another reverted to foreman and one was retained as general foreman. The one general foreman who was retrenched, struck it lucky and immediately got on to a track which led to him becoming a staff manager at Guysuco in three to four years. The general foreman who reverted to foreman, emigrated after two to three years, and the general foreman who was retained also emigrated after three to four years. Lincoln says that they were notified that 1,287 workers were retrenched, and that may well be exactly and technically accurate, but many more workers were let go with early retirement and with voluntary resignation/departure. The totals met the target 1,800 to 2,000. Pursuing this issue further would be time-consuming, but it will still leave us differing – it is better that we put more of our efforts, today, into creating a steadily brighter tomorrow.
I reiterate that no steam-unit has been removed from Linden. The 15 MW turbo-alternator set and condenser which a municipality in the US had kept for years on standby, in their packing cases, and which were bought cheaply, were still, at my last visit, in their decaying wooden crates where they were deposited in the mid-1980s.
Concerning GUYCOR 93 and GUYMUL, technical feasibility was demonstrated in the nominal one-tonne per/hour pilot plant which was assembled and developed over a number of years (and of which there are a hundred of us who remain justly proud). MINPROC did close this pilot plant along with the production of water treatment chemicals, alum and aluminate. A fully-functioning commercial GUYCOR 93/GUYMUL mill was not arrived at. The unresolved issues were about finding financing for the commercial plant which the consultants proposed, concomitant with questions about the willingness of customers, at the time, to pay prices which exceeded the projected costs of GUYCOR 93 and GUYMUL by the required margins. The greater utilization of the bauxite mined, concomitant with the development of a range of diversified bauxite products, had long been seen as extremely desirable. The GUYCOR 93 and GUYMUL work of the 1980s advanced and updated the concepts and work of C Harry Whicher in 1967, with roots in earlier work in the 1950s, and even 1928. Today, BOSAI in Linden, and FIRST BAUXITE, the proposed new operation at Bonasika/Sand Hills on the Demerara River, are planning to offer in two to three years’ time, different sets of the possible range of diversified bauxite products. Their success would bring satisfaction to those who worked before.
Lincoln may be correct that MINPROC was formally contracted, eventually, in June 1992, before October 1992 when the PPP/C came into office. My memory is that MINPROC was on the ground by early 1991. What is important, and what Lincoln has hesitated to state, is that the MINPROC contract was part of the whole package which the government of the day had entered into, with the various multilateral agencies and institutions and supporting governments; that MINPROC was to be given a ‘free hand’ to manage the Linden operation for two to three years, refashioning it and either demonstrating sustainable profitability, at which point it was to be privatized, or, if no profitability, the Linden bauxite operation was to be closed in its entirety.
This PPP/C government allowed MINPROC to manage in its best, deliberate judgment (imagine what Lincoln would be saying if the PPP/C government had interfered), but when, in 1994, MINPROC declared that they could not see how the Linden bauxite operation could be made viable, this PPP/C government stepped in at that point, broke the covenant with the multilaterals and supporting governments, did not close down the bauxite operation, and kept supporting it through a number of ways, including through NICIL, until good partners came along for the privatization of the bauxite companies. It would be very gracious of Mr Lincoln Lewis to take himself by the hand, and the people of Linden, to acknowledge the above.
Contrasting the PPP/C’s actions in the bauxite sector with those in the sugar sector, at any one point in time, is misleading, is deceiving, and is worse because the two sectors have been on different tracks, or at different points on a set of tracks.
Preceding the intervention in the sugar sector, there had been two earlier interventions in the bauxite industry, in 1983 and then again in early 1992, by the government of the day, in association with multilateral agencies and supporting (foreign) governments, to make bauxite sustainably profitable. And when, as stated above, MINPROC declared that they could not see a way to make the Linden bauxite operation profitable, this PPP/C government immediately applied to the EU for a third intervention under the SYSMINS arrangement, to transform the people and town of Linden to survive beyond bauxite. This was the birth of LEAP, the Linden Economic Advancement Programme.
It took seven or more years of persistent arguments and negotiations to bring LEAP to the point of disbursements. Part of the delay in LEAP was this government’s fight for the original conceptualization of LEAP, which then was a programme of about US$25 million, about half of which was for infrastructural investment, but which the EU excised as EU policy evolved, insisting that LEAP should concentrate on changing people, and was not to be an infrastructure project.
I need to address, again, the question of tax-free overtime bonus and incentive payments in the bauxite sector.
Yes, this was implemented in the latter 1980s by the government of the day when, with the real market in Guyana being the black market of the day, and the requirement by the institutions on constraining the pay of the public sector, including government-owned companies, the pay in the bauxite industry was so low that many unemployed men (not women) were refusing to take jobs. As government was unable to raise wages, an “accommodation” was made to allow the over-time tax waivers for bauxite workers (on the pleading that bauxite workers had little opportunity for private side-line work), but with complaints emanating from many other government workers. There was a question, even then, whether this waiver was really legal, but certainly it could not continue after privatization. However, the general mining incentives to the bauxite companies were continued on privatization. Share price (one dollar, or whatever) and other arrangements were set so that the new company had a chance to survive, so that jobs may be sustained and workers’ pay could be at the highest sustainable levels. I was shown recently the pay-slips of some RUSAL mine-workers and, even with paying taxes on overtime, take-home pay compared well with comparable jobs across our country.
Indeed, the privatizations were not structured as a sale of any portion of the companies, but as an investment of a certain number of $US millions to receive a certain percentage of the shares of the new company.
In this process, the assets contributed by the government, which had been parts of loss-making subsidized operations since 1976, became themselves revalued from a minus figure to a few US$ millions. In these privatizations, this government restored some value to the work of earlier generations of our people, and to our bauxite resources. And, the assets not required in the new company were vested in NICIL (created by the preceding government for that purpose), and repackaged as appropriate.
With respect to the Bauxite Pension Plan, NIS, and GRA, I reiterate that in the pervasive economic difficulties in our country from the mid-1970s, the bauxite companies did not, at all times, have all the monies to make full payments. There were accumulated shortfalls on each of the above accounts, which this government ‘made up’ after reconciliations, at times of transactions. It should be noted that when the NIS came into being, the Bauxite Pension Plan was adjusted. It was no longer a “full pension scheme,” but a “top-up scheme” to “top up” the provisions of the NIS to reach the provisions of the previous, existing bauxite pension scheme. The NIS became the basic pension scheme for the workers of the bauxite company, and remained untouched.
Concerning the question as to what was to be done with the monies to the credit of, and accessible to, undivided workers in the various “funds,” it was at Mr Lewis’ suggestion that a study was made by the Institute of Development Studies of the University of Guyana (we have found a copy), in 2003, which reported that the overwhelming majority of workers wanted to receive all that was to their credit in individual lump-sum payments. This is what was implemented! This government had no mandate to turn over any part, or whole, of the workers’ monies to any fund – to be set up and run by whom? And, who would then carry the responsibility for the workers’ monies? Each worker received what was due to him on each account, and was free to do with it as he/she was pleased, in accord with the expressed preference of the majority.
And, whilst a number of workers might have wasted their monies, many others put their monies to good use. It was for Lincoln and others to engage with workers and take responsibility for setting up and running any such fund, whilst protecting and even growing the workers’ monies.
Allow me to repeat two paragraphs from Lincoln’s letter, which reveal a mindset with which all Guyana may sympathize, but the world has moved on and we want to encourage Mr Lewis to move on too.
“Linden always had independent electricity generation up until today.” “Water and electricity were always elements in the production cost of bauxite and the unions which have been in the industry since the 1940s factored these into negotiations with the company.”
True in the 1940s, but that was more than sixty years ago!
True, but how is electricity in Linden being paid for, today? In April, the government paid G$240.3 million (about G$2,884 million per year), G$62.38/kWh, to cover the generation costs for electricity supplied to the Linden community, using diesel; and we are looking within four years, with Amaila Hydro-power in place, to have electricity delivered at Linden at no more than G$25/kWh.
Today, things are quite different. Times have changed. Guyana’s bauxite was tops in the 1940s, but then Jamaica, Guinea and Australia bauxites came along, and already by 1970, there was recognition that Guyana bauxite was facing great challenges to survive and to stay competitive, yet profitable. DEMBA/ALCAN, in 1965, began handing over McKenzie to the residents and to the central government (which in time renamed the area ‘Linden‘). When the financial difficulties of the nationalized company began in 1976, the transfer of responsibilities, for all social services, began: education, health, roads, electricity, water. The bauxite workers’ trade-school was not taken away – it was taken into the nation’s technical training system.
The PPP/C government embarked on a programme, alert to opportunities to refashion the bauxite sector so that it could become profitable and proud again; and to turn old assets, and people, to new, sustainable, profitable modern activities. This was a programme in which NICIL played, and still plays, a leading role.
It would be good if there were a movie like a ‘Google Street View’ of Linden, and all of Region 10, as was made in October 1992, so that we could play it back today and compare with what prevails today. I do not know if that would satisfy Lincoln.
Truth is that nothing is forever; every situation has its time of birth and growth and glory days, but the world steadily moves on; things change.
The glory days of our bauxite occurrences were the 1940s, ’50s and ’60s. We do not live to serve our bauxite; our bauxite is there to serve us for as long as it can, for as long as we cannot do better otherwise. This is true for all economic activities. There comes a time when one has to let go of past glories and focus on re-inventing and modernizing oneself, and one’s community.
Yours faithfully,
Samuel A Hinds
Prime Minister
