Under fire over a speedy $3b loan this month to the Central Housing and Planning Authority, the Guyana Geology and Mines Commission (GGMC) today said that it saw the lending as an investment decision.
It cited the rate of interest of 5% on the loan which it said was 3.2% higher than commercial banks, ignoring the fact that the additional interest expense would have to be footed by taxpayers anyway.
Opposition coalition APNU has already said that the loan is illegal. Analysts have pointed out that there is nothing in the GGMC Act that reasonably permits the loan and that two state agencies should not be permitted to enter such a transaction outside of the Consolidated Fund. Such inter-agency transactions, analysts note, would lead to chaos in the public accounts and make a mockery of Parliamentary oversight.
The GGMC also said that it has engaged in many such transactions since 2006.
The GGMc statement follows:
The Guyana Geology and Mines Commission has noted the recent comments in relation to the just concluded Loan Agreement with CHPA and wish to advise that the GGMC Act No. 9 of 1979 is an Act that provides for the establishment and the functions of the Guyana Geology and Mines Commission and is cited as the Guyana Geology and Mines Commission Act 1978.
The provisions of the First Schedule have effect as to the constitution and proceedings of, and otherwise in relation to, the Commission. Sections 10 to 19 of the Act provide the legal framework for the Commission to undertake the granting of loans. More specifically, the relevant Sections are quoted below:
Section 10 states “Subject to such conditions as it may deem fit to impose in particular cases the Commission may, out of its funds and resources, make loans in accordance with the provisions of this Act in that behalf, in the performance of its functions”.
As it relates to the Commission’s functions alluded to in the latter part of Section 10, Section 4 of the Act clarifies these functions. Specifically, Section 4 (1) (f) of the Act provides the Commission with the latitude to undertake activities that would further the business of the Commission and the promotion of its functions by stating “to carry on all activities, the carrying on of which appears to the Commission to be requisite, advantageous or convenient for, or in connection with, the exercise of its functions”.
The Commission undertaking to provide a loan to the Central Housing and Planning Authority (CH&PA) was done purely as an investment opportunity given that the rate offered was 5%; 3.2% greater than the rate currently enjoyed at the commercial banks. In addition, it was seen another opportunity to contribute to the growth and development of the nation.
Further, this should not be perceived as an isolated case of monies being expended or utilized in support of other agencies and for the development of the people of Guyana and the country, given that the Commission has historically provided financial assistance to other entities. This can be evidenced from the listing of financial assistance below that was provided to entities by the Commission over the period 2012 – 2015:
The rehabilitation works to the Bartica Pavilion at a cost of approximately GYD$932,291
The procurement of the Continuous Operating Reference Station (CORS) at a cost of GYD$80,039,806 for the implementation of eight (8) stations over a period of six (6) months which will facilitate real time GPS surveys for all agencies and Ministries.
The transfer of GYD$70,000,000 in 2013 to the Office of the Prime Minister to improve electricity supply at Mahdia, Port Kaituma, Mathews Ridge and Moruca as follows:
GYD$25,000,000 to Mahdia Power & Light Inc. to improve electricity generation and supply.
GYD$25,000,000 to Port Kaituma Power & Light Inc. to improve electricity generation and supply.
GYD$20,000,000 to Mathew’s Ridge Power & Light Inc. to improve electricity generation and supply.
The funding of the restructuring of the Environmental Protection Agency (EPA) by the Commission at a cost of USD$240,000 in 2014.
The transfer of GYD$2.0 Billion from the Guyana Geology and Mines Commission to the National Protected Areas Trust Fund in 2014.
Financial support of USD$450,000 as financial support to Iwokrama International Centre for Rainforest Conservation and Development.
The transfer of GYD$1.0 Billion from the Guyana Geology and Mines Commission to the National Treasury.
The provision of the sum of GYD$756,745,475 to Ministry of Public Works for the undertaking of Road Works in 2012.
Remedial road works at a cost of GYD$3,136,680, to ensure that it is safer for travel by way of reducing its slope.
Payment of GYD$288,309,350 to the Ministry of Public Works for the rehabilitation of roads in 2012.
The transfer of GYD$61,418,000 to the Ministry of Public Works for emergency works under its Hinterland Program.
The transfer of GYD$21,065,925 to the Ministry of Public Works for rehabilitation works conducted to airstrips at Ekereku Bottom (Region 7), Lethem (Region 9) and Imbaimadai (Region 7).
Rehabilitation and widening of road from Mathew’s Ridge to Baramita, Northwest District at a cost of GYD$25,763,826.
Rehabilitation of the Arakaka to the M4 (Manikura Junction) to the M2 (18 Miles) Road costing GYD$31,374,288
The payment of GYD$35, 576,056 for contractual road works in Tamakay.
The Rehabilitation of the road from Brain Sucre Junction to Tumatumari and Micobie Village, Region No. 8 costing GYD$89,691,706.
The payment of the sum of GYD$37,595,974 by GGMC under the Hinterland Road Programme to the Ministry of Public Works to facilitate the rehabilitation of the Ituni-Kwakwani Road.
Rehabilitation of the road from Tamakay to Ottomung Head and Tamakay Junction to Puruni Roadway costing GYD$169,056,450
The rehabilitation of the road from Brian Sucre Junction to Blackwater at a cost of GYD$329,099,606.
The payment of the sum of GYD$168,478,322 to the Ministry of Public Works to cover variation/additional works for the Karasabai-Monkey Mountain Road Rehabilitation.
The payment of the sum of GYD$18,661,000 to the Ministry of Public Works to facilitate the rehabilitation of the log bridge 18 miles before Kurupukari.
Funding of emergency rehabilitation works from Itaballi Landing to 12 miles before Itaballi at a cost of GYD$79,450,000
Funding of emergency rehabilitation works from 12 miles before Itaballi to Puruni Landing at a cost of GYD$60,243,410.
Rehabilitation of Mahdia Internal Roads and emergency works at a cost of GYD$35,888,775 in 2013.
Funding of emergency rehabilitation works for the road from Toraparo Junction to Pappyshou Landing at a cost of GYD$54,026,940
Rehabilitation of the Aremu Road – Phase 1 costing GYD$129,475,767 in 2013 and continued in 2014.
Construction of a Bridge at Tiger Creek costing GYD$8,541,800 in 2013.
Rehabilitation of the road from Matthew’s Ridge to Baramita costing GYD$60,000,000.
Rehabilitation of the road from Arakaka to the M4 (Manikura Junction) to the M2 (18 Miles) Road costing GYD$73,000,000.
Rehabilitation of the Puruni Road costing GYD$47,100,000.
Rehabilitation of the Oku Bridge costing GYD$17,500,000.
Rehabilitation of the Tamakay Road costing GYD$65,000,000.
33. In addition, contributions were made by the Commission to the Consolidated Fund as follows:
Year Amount
2006 $800 million
2010 $2 billion
2011 $2 billion
2012 $2 billion
Total $6.8 billion
The information outlined above clearly indicate the support that has been provided over the years across the natural resources sector in keeping with the mandate of the Commission.
