While officials from Chinese logging company Baishanlin want three more years to make good on long-awaited promises, the APNU+AFC government believes that not only the time requested is too much but that leniency and their patience have been exhausted.
“I think that government has been more than reasonable with Baishanlin. We have done all that we physically or possibly could to give them, to hold out the hope to them, that things could happen, Minister of Natural Resources Raphael Trotman told Stabroek News, when asked about government’s response to the company’s pleas.
“It would be quite wrong for us to hold concessions which are not being utilized for another three years, simply on a request,” Trotman also posited.
Baishanlin, said to control some 1.3m hectares of local forests prior to the Guyana Forestry Commission (GFC) moving against it, established a presence here in 2006 and has been accused of making big promises to add value to forestry but failing to do so.
Instead, it kept on gathering forests and increasing the export of logs all the while gaining huge fiscal concessions under the former PPP/C government.
But over the past few months the company seems to be losing its operational grip here with the GFC first signalling the yanking of all of their forest concessions.
The GFC said that its decision to repossess came after the company failed to deliver on agreed steps to introduce investors to the Commission and having been given time to prove that it had an acceptable plan to clear an approximately $80M debt to the commission.
Trotman, has said too that government has to make a decision based on Guyana’s best interest rather than one “based just on a narrow view of getting at the company….”
When asked if the views expressed meant that government had written the company off, Trotman explained his government’s stance. “As it is now, letters have been written to them. Their concessions have been reclaimed.
The company continues to exist legally, and I am sure has interests, but as so far as their operations within the state forest, that is not happening,” he stressed.
However, he did point out that Baishalin was free to approach government again. Said the Natural Resources Minister, “We welcome investment, any investment.
The company, or any part, or any derivative thereof may approach the GFC and ask to be considered in the future. We are not going to say no.
They will be scored objectively as every company will be scored,” he asserted.
The Central Housing and Planning Authority (CH&PA) last week announced that it plans to take back lands from errant developers, such as the Baishanlin-owned Sunset Lakes, for failing to meet contractual obligations.
We are looking at that arrangement with Baishanlin. There are conflicts, legal and other, but the bottom line is that we intend that those lands be made available for middle and upper income and that has not happened. This thing is absurd and we will not be compromising on that,” Chairman of the CH&PA Hamilton Green told Stabroek News in a telephone interview from the United States.
“As far as we are concerned it (the contract signed with the initial buyer) is non- negotiable. We are not accepting any excuses. We don’t have any sacred cows,” he added.
Green said he understands that Baishanlin may want to seek redress through the courts to hold on to the lands and it is their right to do so, but it would not stop the CH&PA from executing its works in repossessing due to the failure of the company to meet specified clauses of the contract.
It is through the use of the courts that the company plans to hold on to assets seized already by yet another government agency, the Guyana Revenue Authority (GRA), earlier this month, from its Coomacka and Providence operations.
Earlier this month, the GRA began seizures of assets in lieu of $1.5B it said that Baishanlin received in duty-free concessions, the conditions for which it breached.
According to the letter sent by GRA to Baishanlin before the seizure, the company did not undertake the aspects of the project specified in the investment agreement signed with the Government of Guyana i.e. upgrading and building a modern wood processing facility at Conception, Linden.
It was also argued by the GRA that Baishanlin failed to create and sustain employment for 150 persons over three years and that the company failed to procure and provide all of the investment and other financing needed for the undertaking in the sum of US$130m over a three-year period from the date of the signing of the investment agreement.
As a result, the revenue collection agency advised, that Baishanlin was in breach of Covenant 5 (1) b (i) of the investment agreement with the government for which the penalty is termination of the agreement. The GRA therefore said that the residual customs duty and taxes were now due and payable on the machinery, equipment and motor vehicles, to the tune of $1.58b, in accordance with Section 36 of the Customs Act, Chapter 82:01.
Attorney for the company, Pratesh Satram, told this newspaper on Friday, that representatives from the company met with officials of GRA during that week, to discuss the matter.
He said that the company anticipates other discussions and that the issues with GRA could be resolved amicably.
