Speech by David Patterson M.P.
Budget Debate 2020
Mr. Speaker let me start by offering you my congratulations on your election to your office, and also take this opportunity to welcome all the new MPs on both side of the House to the August Assembly. I would like to congratulate in particular the new MPs on this side of the house, for a job well done so far.
Mr. Speaker, it was Abraham Lincoln who quoted from the bible and said that “a house divided against itself cannot stand”. I stand here today to borrow those sentiments and pronounce that a country divided against itself cannot prosper.
Mr. Speaker, Guyana and its citizens cannot continue to be pawns in this mindless game of disregarding everything studied, analyzed, planned and even implemented by a previous Government only to start over in the name of politics. That’s like throwing the baby out with the bath water; that’s one step forward and two steps backward. It is time for change, we must
do things differently.
Mr. Speaker, for this Parliament to drive progress in Guyana we must first acknowledge where we are and then define where we are going. There are several areas where Guyana has made progress in the last five years and this needs to be built upon like any good foundation. Clichés and buzzwords are everywhere but We need a clear vision to be articulated so that as a Parliament we can judge what to do and how best to do it with inclusivity.
Mr. Speaker, as a country rich in physical resources and (according to our last census) a population of approximately 280,000 persons are in the active labour force. As a country, we are extremely challenged for human resources. Mr. Speaker, Guyana cannot afford to continue ostracizing sections of our citizenry because of differences, whether these differences are religious, educational, ethnic, gender or age related or political. Guyana needs all Guyanese. The Government of Guyana has a duty to support all Guyanese.
Mr. Speaker, I want to press on further by highlighting that (based on our last census), half of Guyana’s population is between the ages of 15 and 64. That is 380,000 persons, some of which are not in the active labour force. Mr. Speaker, can we as a Parliament, point to anywhere in the world where resources such as ours were successfully developed for the benefit of all citizens, with a work force the size of ours? This situation gets worse when we deliberately overlook a section of our people because of differences. Guyana’s development requires all Guyanese to be meaningfully involved. We must also stay focused that the Guyana we build is not only for our present but for the 340,00 youths who are 14 and under. Guyana needs every single Guyanese – and any budget presented and implemented must cater for all Guyanese and must consider our youth.
Mr. Speaker, Guyana’s population is made up of approximately 50% women. However, 75% of our tertiary graduates in this country are female which speaks to the value that resides in the women of Guyana. Yet, according to an ILO report, our women in STEM activities has not moved from 27%. Mr. Speaker, greater involvement of our women means a significant increase to
the available human capital in Guyana and a contribution to National Development. Of course, this means examining our policies, our biases, and discriminatory actions and careless words. Our women must be equal. I reiterate, Guyana needs all Guyanese.
Oil and Gas Sector
Mr. Speaker, I crave your indulgence as I make the following comments on the Oil and Gas Sector, which will propel our economic recovery, post the COVID-19 pandemic.
Mr. Speaker, a lot has been said about Oil and Gas already, much of which can simply be classified as pure political rhetoric, designed to present a falsehood about the sector of which only a few possess expert knowledge.
Mr. Speaker, there has been much talk internally and externally about the efficacy and value of the contract signed between the Government of Guyana and Exxon. I suspect that some of these baseless assertions will continue. In fact, Mr. Speaker, it is our belief, at the time, that the 2016 agreement was a vastly improved contract on the 1999 agreement signed by the PPP/C, an agreement that would bring tremendous benefit to the people of Guyana.
Mr. Speaker, the PPP/C has said throughout their campaign that it would re- negotiate the contracts in the petroleum sector. It is well within their right as the sitting government to do as promised. They have been chirping for more than three years that there is a better deal to be had. Well, if there is, go get it. Mr. Speaker, we are not going to stand in the way of any
process that would bring additional value and benefit to our people.
A review of the budget under Petroleum, mentioned three areas for the strategy on Petroleum. Notably absent is a commitment to Safe and environmentally sound operations. Mr. Speaker, the PPP must continue what Coalition started in order to effect the cessation of Flaring. Ongoing controversy surrounding flaring clearly signals that Exxon does not want to live up to its promise of Zero Flaring from Day one. It is now nine months and flaring has not ceased with over 11 billion cubic feet of gas emitted into the air with the detrimental effects to the people of Guyana. Exxon seems to be resisting closing the loophole in the environmental permits which allows for too broad an interpretation of Startup Operations. To continue to claim that they are still in startup mode is ridiculous.
The Coalition started the process through the Field Development Plan (FDP) review of the Payara, to change this loophole and allow flaring consistent with international standards. The Coalition also acknowledged that it erred in allowing the dumping of contaminated produced water into the ocean instead of reinjecting this water back into the reservoir as commonly done throughout the world. Exxon’s public claim that this water does no harm to the environment contradicts what the experts say. The health, safety and environmental well-being of citizens of Guyana is worth any cost – this is standard international practice. Guyana cannot afford a disaster like those of international acclaim. The only thing international companies understand is fines and penalties, hence we recommend that these be included in the approval of the Payara FDP and any other authorizations and permits being finalized in the future. The only reason that flaring has continued is because
there are no fines or penalties of significance involved. The Government must act urgently and decisively on these environmental concerns.
Continuing on the sector of Petroleum Mr. Speaker, the Government commits to establishing an arm’s length SWF – we say commit to a timeline so that this is not just empty rhetoric. The Government commits to training of thousands of Guyanese at every level – we say that this local content mandate must have definitive numerical goals through legislation and in contracts. We propose, a minimum of 50% of all subcontracts must go to local businesses; and have a mentor protégé programme to achieve this goal in 3 years to ensure the transfer of skills and knowledge.
The budget speaks to regular audits for our country’s oil wealth, we insist that these audits be done by the Government agency. Also, notably absent from the areas to be targeted with our oil wealth, is a return of free education from kindergarten to University which existed under the PNC but was abandoned by the PPP. This was a commitment by the coalition in 2020 which we intended to keep. There can be no better spend for our wealth.
Mr. Speaker, I note that the Ministry of Natural Resources is about to set up a Gas to Power working group aimed at ultizing our natural gas. I am pleased to inform this house that my government alone with several international partners has done a lot of work in this regard, to this end we have completed
• A Study on Costs, Economics, Impacts and Key Considerations of transporting and utilizing gas from offshore Guyana for the Generation of Electricity for Local Consumption (IDB)
• Study on System Expansion of the Generation System, on how best to transition Guyana to clean and renewable energy (IDB).
• Feasibility Study of Transporting and Utilizing Natural Gas from
Offshore Guyana (IDB)
• Gas to Power Feasibility Analysis (IDB)
• Oil and Gas Master Plan (Government of Japan)
• Site Selection Study where 10 possible locations were identified and ranked accordingly based on land size, site development costs, Accessibility to utilities, infrastructure and port; distance and accessibility to FPSO; socio-economic and environmental impact.
• Site Analysis for a new Deep-Water Port in Guyana (IDB)
• Financial Proposal for the funding of the gas pipeline and generators at extremely competitive terms.
Mr. Speaker, the only outstanding issue when this project was transferred from the then Ministry of Public Infrastructure to the newly established Department of Energy on August 1, 2018 – was a final approval of the recommended location – all these studies and reports still remain with the Department of Energy.
Mr. Speaker, before commencing my budget presentation I provided certain sections of the media with copies of these reports – not only on Natural Gas but other areas which I will reference in the remainder of my speech.
• Mr. Speaker, the Junior Minister made headlines when he reported to this house that the Government owes GPL – G$16B – this is correct. What he failed to inform this house, is which section of Government owes 85% of that debt – it is GWI – this entity is like Guysuco, very loss making, at the current rates, coupled with the leakage in the system, this company is indebted to GPL about G$1B per annum. But before I get into the details let me state that GPL 2015 audited accounts shows liabilities of over G$10B, so this issue predates the Coalition administration. (I have also included the 2015
audited accounts in the folder to the Media).
• “Water is Life” so GWI was never disconnected – but now the honorable Minister is free to pass the instruction to cut power to GWI anytime he wishes. Mr. Speaker, I will be keenly examining the estimates next week to see, now that he knows that GWI owes GPL these large sums, how much he has included in the 2020 budget to start repaying this debt.
• Mr. Speaker, the Junior Works Minister listed all the various reasons why, since the PPP assumed office why blackouts has increased, and his proposed solution – Expressions of Interests for 30MW – and received responses from 30 agencies to sell power to the GPL, Mr. Speaker, if that’s the Government’s short term plan – the country is in for a dark Christmas and even darker first half of 2021. The reason is simple. Firstly, no private company currently has that excess capacity to sell to the grid that amount of power, 2nd – GPL is not Legoland – – you cannot just plug in bits and pieces into the grid. There are several
other technical challenges such as grid stability and voltage frequency synchronizing involved in putting power into our system (just ask Giftland) and finally cost – all those 30 agencies will want long term contracts to bring units to Guyana, no legitimate business will come here for a 6 month contract as suggested by the EOI.
• Mr. Speaker, on behalf of the citizens of Guyana I would like to offer a solution. Sit with your team, ensure that you have a full and detailed listing of your unreliable units, review their maintenance schedule, provide immediate funding for the purchase the spares for these units
– and get PPDI to undertake this works. If you do that now all our
engines can be operational for Christmas and the first half of next year.
– we have done it before – we have had more than a year of reliable power supply until the PPP got involved.
• Mr. Speaker, the only solution are the engines that my Government procured, (I have also included in the media package the project details for these generators) – the same engines which the Junior Minister spoke so mockingly about – I bet that next year when commissioning these generators – the PPP will claim credit and announce that it was always part of their plan to end blackouts. However, Guyanese deserve a reliable supply.
• Mr. Speaker, mention was made of this project in the budget speech, however no funds have been allocated – which is a very good thing, because as we have said on numerous occasions – the project as conceived by PPP is nothing more than a Ponzi scheme – a retirement fund for certain politicians.
• Allow me to clarify our position on this project, Amaila Falls (as a hydro site) remains a workable prospect, however the Amaila Falls Hydro Project as developed by the PPPC is not. There are claims “that this project would not have cost the Guyanese public any money”– this is far from the truth and criminally inaccurate.
• Mr. Speaker – to best describe this project, permit me to quote and paraphrase from the real Minister of Finance (WJ) 2015 Budget speech – “This Government is well aware of the importance of clean, reliable and affordable energy for development and the improved welfare of our people. The problem is that, as currently configured, it will not only be irresponsible, but a downright criminal act of deception were we to proceed with the Amalia Falls. Our investigations have revealed that at the current cost of almost US$1 billion, the Guyana Power and Light Company Inc. (GPL) will be required to make annual payments amounting to US$130 million to the operators of the hydro facility, which will total US$2.6 billion over the 20-year
commitment period of the power purchase agreement. This does
not include Guyana’s contribution of at least US$160 million, comprising roughly US$45 million for the road, US$80 million in equity through the Norway Fund, and US$35 million in loan, that we had to take from the Inter-American Development Bank (IDB). Further, there is the question of the garnishing of US$65 million of our foreign reserves”. (Mr. Speaker – the only reason, I have not included the financing details that was submitted to the IDB in the media folder, is because I am
unsure if it still remains proprietary information – if any of the lawyers listening to this speech can confirm that it is not, I will add it to the folder).
• Mr. Speaker, even the sums committed from the LCDS to be used as equity are no longer available – a high level team from Norway visited Guyana in 2019, when our Government explained our Green State Development Strategy, our proposed energy diversification program, the team were so impressed – they immediately endorsed our plans and approved the transfer of these sums to construct 3#
10MW solar farms for GPL – so the Norway Funds are no longer
available for the unworkable project – “that boat done gone a falls”. (In the media package) I repeat for emphasis, the current formulation of this project is criminal in its costs and burden to the people of Guyana compared to its proposed benefits.
Renewable Energy Projects
• Mr. Speaker, what were the renewable projects that so impressed our Norwegian partners? – to highlight a few – 4 hydro projects (Moco Moco, Kumu, Ikuribisi and Kato), 10 solar farms (Bartica, Mahdia, Lethem, Yarakita, Hotoquai, Bethany, Kabakubauri, Monkey Mountain and Achiwib) – ALL of these projects have been included in the 2020 budget without comment, that can only signal that the PPPC also endorses our plans and the people of Guyana will benefit. (I
have included a full listing of renewable projects to the media folder – 69 projects in total).
Linden – Lethem Roadway
• Mr. Speaker – while the road linking Linden and Lethem has been discussed long before Independence, I heard comments from the Senior Minister of Works stating that “this is a PPP project”; it is not. Current funding and project development for this phase of the project was secured by the APNU+AFC government as a grant
provided by the UKCIF on September 2015 (included in the media
• What even worse – when the then Opposition met with the UKCIF officials last year, they informed them that if the PPP won the elections, they would cancel this project outright; the UKCIF responded by saying – if they cancelled the project, UKCIF will cancel the grant funding.
• The PPP did not want this project, they were forced to continue it otherwise the funding would have been withdrawn – MPs Sears and Figuera – please inform the people of Region 10, not to allow this Government to tell them that the road is being constructed because they wanted to see development in the region 10 – if they had their way, this project would have been cancelled and the money spent elsewhere.
• Mr. Speaker – I would also like to inform the residents of Region 10, that when the Coalition government met with UKCIF, we were told that there is a choice between constructing a fair weather road and an asphaltic concrete road – we all know that a fair weather road is only good in the dry season, our government indicated that even if we had to borrow additional funds from the CDB, that our non-negotiable
option is the construction of an asphaltic concrete road– We will ensure that the PPPC government will not reduce this project to a lesser standard road.
East Coast – East Bank Bypass road
• Mr. Speaker, the traffic on the East Bank corridor has reached a critical stage, to this end, the APNU+AFC designed a modern highway which not only catered for better traffic management to all areas
along this corridor, but also allowed for additional lands in all communities to be opened. What is included in this budget is a road that only links Ogle to Eccles, a bypass road in the truest sense of the word. It bypasses Sophia, South/North Ruimveldt, Houston, Agricola, McDoom, Bagot town, etc. Our design was for a FOUR lane highway with a sufficient medium to allow future expansion, linking all communities. All those communities bypassed also need traffic relief.
• Mr. Speaker, one must ask who will this new road benefit? How will it reduce traffic congestion along the East Bank corridor? Whose lands will this road benefit? This map will provide a clearer indication of
the proposed benefactors.
• Mr. Speaker it is not lost on us which villages were bypassed by this new design – this is a loan; all Guyanese will have to repay this loan – hence all Guyanese should benefit from it.
New Demerara River Crossing
• Mr. Speaker, I note that the PPP is seeking expression of interests for
a new Demerara bridge, let me say – I wish them well. A new bridge is greatly needed, I will be so bold as the say that despite whatever route
they propose, any new bridge will have to be exactly where the APNU+AFC proposed (Houston – Versailles) if not the country will not see a new bridge in the next five years, since the only other viable option would be Wales to Hew Hope on the East Bank – and that location will not ease the current traffic congestion. (Feasibility Studies and reports are on the Ministry Website for all to see).
Berbice River Bridge
In my August 4th handing over letter, I highlighted that this is the 14th year that the pontoons supporting the bridge have been in the water without servicing by the Berbice Bridge Company Incorporated – this should be done every five years. This issue is compounded by the lack of a maintenance plan and a lack of budgetary allocation in the 2020 Budget, contrary to our Government’s injection of G$120 million in 2019.
We want to put the country on notice that we see a clear intention by this Government to purchase this bridge, from their cronies at supernatural profits, using the monies that should be allocated to improving the life of every hardworking Guyanese. While BBCI continues to put the lives of citizens at risk for their continued financial gain and the Government will let it continue.
Mr. Speaker, a lot has been said and continues to be said about the project – it is said to be “half baked”. The junior minister claims that there are hundreds of items to be corrected, his boss claimed that the project is “troubled”, let us accept all, all of these comments and
concerns – let me tell this house and country about the status of this project (as at July 31, 2020). Currently in the ministry there are two irrevocable bonds totaling US$6.206M plus a performance bond of US$13.8M and a retention of US$6.9M. These bonds are in place to ensure that all the works completed are acceptable – if not, the bonds can be cashed without question. That is how you manage projects against risk.
Mr. Speaker – let me be clear, the EXIM bank of China, has advanced monies to CHEC and provided this government with on demand bonds, so if anything is not acceptable to us, then we can cash this bond – so if there is anything that the government finds unacceptable they should cash these bonds.
Mr. Speaker, my government moved to cash these bonds and wrote EXIM in November 2019. This was delayed by the Chinese New Year and Covid-19. I have not seen anything retracting this request.
There is a total of US$27M available in bonds and retention to the government – enough to buy 52 air bridges. The ball is now in your court, let’s see what you do with it. If you return to this house and report that you have not cashed these bonds, it means that you have accepted the works.
Mr. Speaker, the junior minister claimed that moneys were paid for delays which were all the contractor’s fault – I will forgive him this time, due to newness. We should all remember that there used to be an Engineer Corp and Police Quarters in front of the airport. It was the government’s responsibility to relocate them so that the contractor could work – it took 4 years to relocate these groups since the army refused to relocate to their new barracks which they
considered dog houses. The PM up to the time he retired from the DF
refused to accept the buildings.
Mr. Speaker, another delay was the attempt to relocate 2000 households from Timehri North – thankfully the people resisted you long enough, for APNU+AFC to come along and we were able to proceed with insignificant relocation.
Mr. Speaker, I want to address the issue of river transportation and the funding illegalities being referenced in the 2020 budget as ‘unlocking bi- lateral processes’ to benefit from an Indian Government grant and loan. The flouting of the laws governing the National Procurement process will be met by legal action, especially since this was a publicly tendered project which was evaluated and awarded to the lowest responsive bidder. Mr. Speaker I want it noted and recorded, that there was a bid protest and NPTAB conducted an independent evaluation review of the project and the result remained the same causing NPTAB to award the tender to the lowest responsive successful bidder. River transportation is important for the development of our country. However, no bi-lateral process supersedes our National Procurement Laws. There are two options available; either honour the lawful award by NPTAB or annul the process and execute a pubic retender for the river transportation project.
East Coast Road – Embankment, bridges to be done; loan comes to an end in December 31, 2020
Sheriff Mandela – Reason it was not started until 2018 (there was Fraud in the tender during the PPP time – check the IDB website, contractors were blacklisted)
Mr Speaker, I would like to end my contribution by providing an insight into Budget 2021 – because unlike 5 years ago, when we entered office where we found absolutely no “implementation ready projects” – in the ministry as we speak right now there a slew of interesting transformational infrastructure projects, all studied, either with preliminary or final designs, simply awaiting the political will to move to next phase of procurement. In fact, some of the projects that you will see in the PPP Budget 2021 submission which should be titled “Don’t Stop the Progress” are as follows: –
• Parika Waterfront Development Project – feasibility Study and
Project Concept has been completed.
• Lethem Regional International Airport – feasibility study completed.
• Georgetown Waterfront Development Project – feasibility Study and
Project Concept already completed.
• Alternative entrance and exit road to Diamond Housing Scheme – preliminary Project concepts already completed and work commenced.
• Upgrade of the link road between Sophia and UG road – revetment to both sides and upgrade of roadway.
• Upgrade Lamaha Street (between Vlissingen and Sheriff Street) – designs completed, revetment to both sides and upgrade of the roadways – awaiting the completion of GWI pipework installation to commence.
• Wismar Bridge – Feasibility study and project design documents completed.
• Upgrade of Linden Soesdyke Highway, design completed – financing secured.
• Wakenaam Solar Farm – financing secured – Procurement Stage.
• Solar Farm for Annai – feasibility report completed; financing secured – awaiting procurement.
• Solar Farms in Port Kaituma, Matthew’s Ridge and Kwakwani – Feasibility Studies completed, and financing secured.
• Extension of the East Coast Highway – financing secured for the design works.
• Extension of the bypass road from Diamond (if it ever reaches there)
to the Soesdyke Highway
• Sipurella to Orealla to Kwakwani – already started (Hon Bharrat)
• New 1.8MW Generator in Anna Regina – civil work already completed – simply procurement of generator (GPL Expansion Plan)
• New 2.5MW Generator in Canefield – civil works already completed –
simply requires procurement of generator (GPL Expansion Plan).
• New Asphalt Plant
I thank you, Mr. Speaker.