With expected oil and gas revenues positioning Guyana to finance infrastructural development, the Guyana Association of Professional Engineers (GAPE) and the Ministry of Public Works are expected to meet soon to discuss the proposed creation of a National Infrastructure Plan (NIP).
The local engineering body explained that an NIP would form a subset of this country’s overall National Development Plan and should be welcomed across the parliamentary divide to ensure that Guyana’s development does not become hindered when governments change.
“We certainly need an NIP because our infrastructural needs still far exceeds our available resources, therefore it is a question of us maximizing the use of the resources we have, in order to achieve the best development outcomes for this country,” the Chairman of the Interim Management Committee of GAPE, Stuart Hughes, told Sunday Stabroek.
“And even with the large revenues which will accrue to the government from the oil and gas industry, our infrastructure needs will far exceed the available resources in the short and possibly medium terms,” he added.
Echoing the views expressed in the most recent edition of the organisation’s quarterly magazine, Engineer’s Quarterly, Hughes said that if this country is to meet its infrastructure needs, the NIP must be based on well-researched and well-reasoned plans that prioritise and synchronise activities to maximise the scarce resources at its disposal.
He pointed to key new-build infrastructure projects, noting their estimated costs. These included the gas-to-shore pipeline and natural gas power plant – US$900 million; Amaila Falls Hydro Electric Plant – US$900 million; the Linden to Lethem Road – US$600 million; the New Demerara River Bridge – US$500 million; the Ogle to Diamond Road – US$180 million; the deep-water port/shorebase – US$400 million; and the Schoonord-Parika Highway – US$200 million.
“The price tag for this very short list of projects exceeds US$3 billion. For some context, this is more than five times the entire current capital expenditure budget of the country. Yet the list does not include the rehabilitation of our main road network and other key infrastructure assets such as sea defences. These will require substantial sums as well, and while our Natural Resources Fund is growing – with current estimates placing it at US$344 million – there is no indication as to what percentage of it will be allocated for economic infrastructure,” he said.
“Therefore, to avoid wasting limited resources, we need a prioritised plan focusing on projects that are economically feasible, environmentally and socially acceptable, and which ultimately will give us the best return on our investment,” he added.
Minister of Public Works Juan Edghill told this newspaper that he values the advice and discussions with GAPE and that he looks forward to meeting the organisation’s team to hear their views on the creation of a NIP.
“From my discussions with GAPE, I believe they add value for the discussions to national development. They have innovative ideas and I will remain willing to engage with them,” Juan Edghill said.
“I believe they are a responsible group. I have engaged them already since I am minister. They have submitted to me work done on two proposed pieces of legislation- The Engineer’s Bill and the Architect Bill – and these are with the Attorney General’s Chambers,” he added.
In the quarterly, Hughes noted that given the fundamental relationship between consistent economic growth and good infrastructure, the NIP needs to clearly set out what infrastructure is needed to boost growth, improve productivity, and create jobs in an environmentally and socially responsible manner
“A good NIP will also help us achieve our carbon emission targets, meet international climate commitments, and move to 100% renewable energy. It can also support private investment in infrastructure and identify ways to accelerate and improve project delivery,” he said.
“More specifically the NIP needs to address, inter alia, improved regional transport and digital connectivity roads and fibre optic networks connecting all 10 regions; investment in regional infrastructure; improved inter- town connectivity (Mabaruma, for example, lies within the contiguous land mass of Guyana but it is not connected by road to any other declared town); reliable and safe public transport; congestion in Georgetown and its approaches; and water and flood risk management,” he added.
Making reference to Guyana’s giant southern neighbour Brazil, which he noted has the tenth largest economy in the world, he pointed out that their laws mandate national development planning. He said that it is seen by Brazil as an important tool of economic development and the constitution includes the “Plano Plurianual de Acao” (PPA) – a multi-year development plan which is part of a set of legal instruments for fiscal and public expenditure management. “The main role of these is to provide the government with strategic guidelines for the allocation of public resources, improve efficiency, and ultimately achieve a higher level of development,” he explained.
“Guyana also needs a long-term economic development plan which has broad national consensus and parliamentary approval. As a country we are not lacking ‘development plans’ – we have had them in many different iterations from the late 1940s. Records available show that a development programme was advanced as far back as 1948 by then economic adviser to government of British Guyana, economist Col. O.A. Spencer. In 1952-1953 a mission from the World Bank considered afresh, and reported on, the problems of the economic development of the territory. Then in 1959, a Cambridge University economics don, Mr. Kenneth Berrill, advised on the preparation of the Development Programme which was implemented up to 1964. From 1964 to 2000, there were several national development programmes, including Highways to Happiness; Feed, Clothe and House the Nation; the Upper Mazaruni Development Programme, and from the late 1980s the Economic Recovery Programme, which in essence lasted until the late 1990s,” he reminded.
But according to Hughes, the various National Development Strategies have all suffered setbacks, ending up stalled by the lack of national consensus in their development and implementation and this is why, he said, there should advocating for such consensus.
“It should go without saying that for any national development plan to succeed, and not to be discarded as a partisan plan, it must be developed with national consensus,” he contended.
Long in the works
And with many projects here not meeting completion dates, Hughes reasoned that a NIP will also address issues associated with mega-projects, which usually have long gestation periods – running into decades – because of design complexity, large numbers of stakeholders, financing challenges, and changing of governments and their priorities.
The road to Lethem was used as a case in point where according to documented evidence, it was first discussed in the British Guiana House of Assembly in the 1950s.
He went back in history as he noted that when Premier Cheddi Jagan had visited Washington, DC, during the summers of 1958 and 1959, he held talks with officials of the World Bank and U.S government agencies seeking funding for the construction of a road from Parika to Lethem.
“These early attempts were followed by many others over the years, and while an unpaved fair-weather road to Lethem has been implemented in stages over time, it is only recently that we have been successful in realising a project for an all-weather paved road from Linden to Mabura Hill, scheduled to start in 2022. This translates to a 70-year implementation period for this 450km project, and we are still only at partial funding!” he pointed out.
“The construction of the new Cheddi Jagan International Airport has also been instructive. This relatively simple US$150 million dollar project has taken us in excess of 9 years to build and the prolonged timeframe was not entirely due to technical reasons. Another example is the alternative southern approach to Georgetown, first conceptualised in 1970, an iteration of which is finally scheduled to start construction in 2022 as the Ogle to Diamond road,” he added.
One of the lessons learned from these experiences, according to Hughes, is that large projects have long gestation and implementation periods, and political changes can have serious ramifications for them.
“It is in the context of our experiences on these projects, which have huge national and economic significance, that the NIP becomes important. An NIP developed with full national consensus will provide the policy and political stability needed to ensure continuity of such huge undertakings and avoid the pitfalls associated with stop-start attempts or the wastage of money and effort when such projects are abandoned. With an NIP that has full national buy-in, it is less likely that such important and costly projects would be abandoned when there is change in government, “he posited.
“Policy stability in infrastructure will also help in securing funds from sources which are currently underutilised. There are sufficient funds in the local financial system to fund major infrastructure through public private partnerships (PPPs), as shown in a 2010 study which indicated that six local commercial banks had assets equivalent to 98% of GDP. Non-financial institutions such as mortgage providers, pension funds, and credit unions had assets equivalent to 42% of GDP, and nine insurance companies had assets equivalent to 17% of GDP. The NIP would provide certainty to the local financial sector to mobilise such untapped funds for financing of infrastructure projects through mechanisms such as PPPs,” he added.
While emphasising that politicians need to find common ground to ensure holistic development, he suggested that the NIP needs to be long term. “For example, 20 years or longer; it needs to transcend political cycles, it must be the result of national consultation, it must have national consensus, and, most importantly, it must have broad parliamentary approval if it is to stand a chance of success,” he stressed.
“An NIP will also give greater visibility of our plans to our international development partners who would also be able to take a longer term approach in the preparation of their various country strategies with respect to financing infrastructure. However, the greatest benefit of a truly national NIP with parliamentary approval, will be a coherent approach to investment in infrastructure which transcends political cycles. The vicissitudes of the Amaila Falls Hydro project illustrates only too painfully why an NIP is sorely needed,” he added.
And for the ordinary man, he said, the NIP would also bring about a sense of stability and reassurance to the infrastructure sector as it would allow the entire supply chain – contractors, consultants, material suppliers – to plan and invest in their firms with more certainty. “This in turn would allow for meaningful involvement and participation by local suppliers in implementation of megaprojects thereby improving local content, building local capacity, and expanding the benefits for the local economy,” Hughes declared.
