LIMIT ON AMOUNT OUTSTANDING UNDER GUARANTEES GIVEN UNDER THE GUARANTEE OF LOANS (PUBLIC CORPORATIONS AND COMPANIES) ACT
Mr. Ramjattan: Mr. Speaker, the motion as amended from the tune of $150 billion to $130 billion along with the interlinking of it with GPL and the occasion when there might be shortfalls as to payments to the senior lenders in this project the Alliance For change wants to say on that score that there are problems with GPL that we must really appreciate and do like the last speaker has done. If we have to put in $130 billion now largely to guarantee GPL from not making the shortfalls to the senior lenders – China Bank and IDB – it necessarily means that GPL is not doing a good job. I rather suspect that these lenders and the consortium heads Sithe global and Blackstone would not have wanted that kind of guarantee and that high if indeed GPL was performing. So all that Mr. Manzoor Nadir, Hon. Member as he is, said has to be somewhat debunked – when he said it is a success story. We just had a blackout and he is saying GPL is a success story. He knows when they come like that to indicate support from the Opposition, dressing up and what I would regard as misrepresenting to the Parliament what a success story it is when we all know that it is not, it becomes so mind boggling. Are they making the proper case to the Opposition for the support on this matter? They are not. I want to go straight to him because I did want to talk for long.
I will quote from Dr. Cheddi Jagan Assembly speeches Volume 6, 1980, Motion to Guarantee a Loan to Guyana Stores. It was being said then that Guyana Stores was doing a wonderful job but still wanted a big guarantee on 14th July,1 1977. Their great leader was telling the then People’s National Congress (PNC), do not come to us with that. On page 95 of Volume 6 he said the fact that the banks were coming to government for guarantees means that there must have some dread about these corporations. Why do so if they have their balance sheet in order? Why do so if their business is being properly run. Then he goes on to indicate that it is but a symptom of something wrong with that institution and that is why they want the guaranteed. And that is why they want the guarantee that high. He indicated too that there must be more scrutiny into Guyana Stores, it was Guyana Stores at that point in time that was seeking the guarantee that must be given to the Opposition; he was Leader of the Opposition then. That is what we have been asking for. I must say in all deference to the Government that indeed they have supplied a number of documents that have helped us in the process. They have not provided some but we managed to get because of Sithe Global having on its website a page on this project which says it could help us with information with a direct channel to them because Mr. Brian Kubeck did leave his connections.
They have been very transparent; far more transparent than your Government, Madam Gail Teixeira, in relation to all the questions we wanted to ask. This is important. We feel that $130 billion guarantee is a ceiling too high, very high in the context of what we have before us. It is largely a guarantee to be paid to the senior lenders. We appreciate that any investor would want to have some guarantee that would ensure that, let us say the institution they are going to sell electricity to, namely GPL, might not have the capacity to pay for some years and there maybe shortfalls, But I cannot conceptualise where the shortfall is going to be so maximal that all this guarantee has to be given. That is my major concern. I am no expert on this matter, and I want to concede that, But I have seen other persons purporting to be experts and some who are real experts saying plenty things; of recent times saying quite a lot of things. But from the very inception the Alliance For Change has made it quite clear that not having the capacity and competence to deal with these matters we are going to piggyback on the expertise and experience of the IDB. We will maintain that position.
When we met the IDB officials at the Office of the President they were pretty much open and transparent and indicated to us the three compartments of their technical studies presently being conducted. One has to do with the compartment of GPL itself and its capacity to distribute profitably and efficiently, safely and affordably the electricity we are going to get from Amaila. The other compartment had to do with the economic viability of the project itself and of course the other compartment – and I am speaking in large terms here - has to do with the environmental feasibility. At that point in time it was raised as to the Hydro Electric Power (Amendment) Bill and it was made very clear that it is satisfactory, and we had agreed that once we studied the amendments that were offloaded on us on the 18th July we would come to support it once we agree with it. We did agree with it and so today we passed it. I understand that economic study on the environmental issues will be taken and has to be put on some website for 120 days and a lot of people – Green Peace and I do not know who else - will then make some comments, complaints, grievances and whatever it is in the transparency process over there.
But what is important here is for us also to know what the IDB is going to say in relation to the economic viability of the project. What it is going to say in relation to GPL. These high class institutions dealing with big time money and finances have the big boys that know the financing arrangements, economics and whatever it is, and they will definitely be in a better position to know whether it will be viable or not. We are banking on their final technical committee reports or what generally I refer to as their due diligence. I see absolutely nothing wrong in an approach like that, holding on to whatever studies they will bring. And that is why the Alliance For Change has taken the safe position of saying if the IDB green lights this project we support it, because they have the technical capacity, and if not and they red light it fine. In their recommendations we understand too they will say why they red light it if it required a higher guaranteed than the $50 billion we have proposed. I want to indicate that after the Minister came up with his $130 billion the Alliance For Change in a motion moved by myself and seconded by Mr. Moses Nagamootoo reduced that to $50 million and did some amendments to their amendments. We feel that this is important because we too are scared somewhat that if there is not some amount of guarantee it may very well kill the project even before it reaches the IDB.
Because we are patriots, because we are nationalists and want to see hydro electricity for our generation and the generation next of Guyanese, because we have been dreaming of this for generations, we feel we have to give it the lifeline until such time as we get further technical reports from the IDB in relation to matters pertaining to what they are now studying. So I will like to urge the Government to understand the Alliance For Change because notwithstanding we have supported the Hydro Bill we have come under criticism for not wanting to support $130 billion. We do not want to jump in with that very high guarantee, not upon the representation of people like Hon. Member Mr. Manzoor Nadir that says GPL is a success story, no. We have to act cautiously. This Government has done projects as mentioned by Mr. Carl Greenidge in which it said we are going to get a lot of success coming out of them. I do not need to mention them – the Skeldon Factory, the Enmore Packaging Plant. There are so many that have turned out to be not as successful as they were represented to be. For that reason we in the Alliance For Change on a matter of principle have taken that approach.
I want to say too that the Alliance For Change welcomes foreign investment, foreign direct investment. As a matter fact it was in keeping with principle we were glad Blackstone is here, we were glad that Sithe is here. These are big companies that will bring credibility to a country and its investor climate indeed if they conduct successful businesses here. It will be of course to the benefit of all Guyanese. In our action plan we did mention it and that is why we had taken the approach from the very beginning which this has to do with our energy policy. It was in keeping with renewable energy, page 21, which could be funded by foreign direct investment and concessional borrowing from the IDB. We even mentioned directly the IDB and other similar financial institutions. Of course we then went on to say that our energy needs should be met by a portfolio of renewable energy sources and not just hydro electricity. We went to talk about ethanol and a number of other things – wind farm, solar panel farms and whatever else there was. We want to stick to that. We want to ensure that the Guyanese nation at a certain period in our future will have affordable electricity. But as was pointed out by Mr. Carl Greenidge and Mr. Nagamootoo we are still uncertain about a number of things like whether the rates will come down whether we are going to have the capacity of GPL to ensure that it reduces the losses we now have and so on.
That is why we do not want to carry it up to that $130 billion; that is why we are acting cautiously here awaiting the due diligence, so that at that stage, we may very well do what we will think at that stage is in the national interest.
It is for that reason we propose the amendment that this National Assembly - rather than the motion brought by the Hon. Minister of Finance – we proposed this one, that the aggregate amount of the liability of the Government under section four of the Guarantee of Loans Act, in respect of guarantees given under section three of that Act, shall not at any time exceed the sum of $50,000 million.
The fact that we are doing this too means that we are taking a leap of faith here. We have gotten some good blows for what we are doing here, but we are a principle party and we are brave and bold and we are patriots and we are going to go that course. Did we not also made the proviso that this amendment aggregate limit shall only apply to the obligations of the Guyana Power and Light Incorporated to make payments to the Amaila Falls Hydro-Power Incorporated, its lenders or their respective lawful successors, pursuant to any agreement and shall be reviewable - and we put this in bold – by this National Assembly within three months hereof, if necessary?
We have been lobbied by some senior Government officials to increase it to $100 billion or $80 billion. I can understand their concerns, but they must also understand ours. So we have left a leeway there that in three months time we can come back.
I am urging the Government to support my amendment to the motion rather than theirs. Thank you very much. [Applause]