Acting Chief Justice Ian Chang has directed the Guyana Geology and Mines Commission (GGMC) and the Central Housing and Planning Authority (CH&PA) to account for the contentious $3B loan agreement signed by both agencies last month.
Justice Chang granted the orders yesterday based on applications by WPA member Desmond Trotman and city councillor and CH&PA board member Ranwell Jordan, who have moved to the court to prevent the disbursement, which critics say violate the GGMC Act and is a misuse of state funds.
The agreement caters for the GGMC to loan the CH&PA $3B for a period of one year to be used for the development of the housing sector. Although the GGMC has said the loan is provided for under the GGMC Act, it has failed to explain how it qualifies given that the law requires that such disbursements be connected with the exercise of the agency’s functions.
Based on Trotman’s application, Justice Chang has ordered that the GGMC show cause why a Writ of Certiorari should not be issued to quash its decision to lend the funds to the CH&PA as an unsecured loan and why a Writ of Prohibition should not be issued prohibiting the GGMC from taking further action on the loan on the grounds that it is illegal.
Further, based on Jordan’s application, the judge has ordered the CH&PA to show why a Writ of Certiorari should not be issued to quash its decision to submit an investment proposal to the GGMC and enter into the loan agreement. It is Jordan’s claim that the CH&PA is not authorised by law to enter into any loan agreement for the borrowing of moneys. The court has also ordered that the CH&PA show cause why a Writ of Prohibition should not be issued to prevent it from taking further steps on any and all sums received from the GGMC as proceeds of the loan “on the grounds that the CHPA has no statutory authority to submit any Investment Proposal or to enter into any loan agreement with the GGMC,” among other things. The matter is returnable for March 13th.
Analysts have argued that there is nothing in the 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, they say, would lead to chaos in the public accounts and make a mockery of parliamentary oversight.
Although the announcement of the loan sparked concerns about government seeking to circumvent constraints on spending ahead of the May 11th general elections, the GGMC has claimed that it should not be seen as an isolated case and it has cited 33 instances where it provided financial assistance totalling over $8 billion between 2012 and 2015.
The GGMC’s loan to the CH&PA is the single largest outlay disbursed by the commission during that period. Additionally, the GGMC has said it made contributions to the Consolidated Fund in the sum of $6.8 billion from 2006 to 2012.
According to a joint GGMC and CH&PA statement, the CH&PA project is “pivotal to the realisation of the Government of Guyana strategic target of allocating 30,000 lots under the Adequate and Affordable Housing Programme in order to maintain momentum in the provision of service land in several areas on the East and West Demerara.”
