Teixeira pointed out that the APNU’s proposed cut was in excess for the actual budget allocation. It was then noted that the AFC’s motion also contained the same mistake.
Speaker Raphael Trotman adjourned the session to review the Standing Orders governing such issues and upon resumption it was decided that the typos would make both motions null and void. Hence the entire air transport programme was cut, including $175 million for rehabilitation of hinterland airstrips and the $26.3 million final payment to the European Union for the Ogle Airport.
The CJIA expansion was highly criticised by the opposition. APNU MP Joseph Harmon stated the CJIA expansion project was not taken to the house in an appropriate manner. He said the contract was signed in November 2011 but the “financial arrangement for the financing of this project was signed in November of 2012 one year after the fact”. Harmon continued that Parliament had passed the budget in April 2012 under false pretence.
Benn
Benn
Transport Minister Robeson Benn was unsuccessful in answering the questions regarding the airport expansion’s conditional loan from Exim Bank of Chin.
Benn stated, “You have to have a contract before you have a loan approval”.
Moses Nagamootoo of the AFC said that this was unreasonable; he stated that “you cannot enter into a contract when you have no money,” he called the project and the subsequent contract a “misrepresentation to the Guyanese people.”
Minister of Finance Dr Ashni Singh said, “Institutions will not finance a project unless there is a contract between the potential borrower of that financing and a company of the nationality of the lending country”. He said China Exim Bank required a contract with a Chinese company and China Harbour Engineering Company Ltd (CHEC) fit all the requirements. “All loans have conditions… This loan agreement like every other loan agreement proposed conditions and obligations for both parties for the agreement,” Singh added.
“Were there other options to financing this contract? The short answer to that is of course there were other options, one of which would have been to finance the project locally using local resources.
Another one would have been to approach another potential lender,” he continued. However, “in the current instance given that this project had been identified as a priority project within the framework of the China Caribbean Development Summit… the Chinese were the logical potential borrowers of choice.”
He said that the opposition was oversimplifying the situation. “I will say that concessional resources are extremely scarce,” he posited, adding that the low interest rates and the grace period to begin payments would not be possible if the loan was shopped to other financial institutions in the open market.
Leader of the AFC Khemraj Ramjattan agreed that in 2012 the CJIA expansion project was indeed approved. However, “government agreed to pay $1.4 million daily for every delay in the contract construction works that doesn’t seem to be concessional at all,” he said. He stated that the conditions in the contract were bound to occur because the time it was taking for loan securement was already a year overdue. Ramjattan stated that more worrying was that the construction arrangement with CHEC failed to make arrangements for the removal of the existing terminal, a new car park, a fuel farm among other integral parts of an airport.
Benn interjected that “there was US$138 million with respect to a loan and US$12 million which is the government of Guyana’s contribution for the project” and proceeded to list monies allocated from Guyana’s portion to cover cost associated with the projects listed by the AFC leader.
AFC’s Cathy Hughes asked the minister what measures the government was then putting in place to increase the number of airlines that would justify the eight-gate airport expansion.
Benn stated that the ongoing feasibility study was one such action and government was continuously pleased with the results. Benn said the runway expansion was prepping for the “new wave of aircraft”.
He said aircraft currently in use will be phased out over the next few years. The runway as it is now is unsustainable for growth to occur and that alone was a reason for the expansion to proceed, he added.
The minister said government was in talks with multiple airlines such as Virgin, Jet Blue and Air Canada, to which Hughes responded that since she was head of the tourism association, “which was more than a decade ago we were speaking to Virgin Airlines”. She asked for specific and conclusive details on which airlines are confirmed to travel to Guyana within the next three months, to which Benn responded, “We do not have any as yet.”
Afterwards, APNU MPs including David Granger, Joseph Harmon and Basil Williams said they stood behind the decision, although the budget for hinterland airstrip rehabilitation and the EU loan payment were also slashed. Harmon stated that the government had the chance to return to the House with revisions. He said that the technical missteps of both opposition parties were insignificant and minor issues, but the government was unable to look past the minor details and as a result the entire heading was cut.
Granger remarked that this confusion would have been avoided if tripartite talks were seriously considered. He noted that a political lesson was to be learned. Granger too stated that the government would be in a position to take the hinterland airstrips’ rehabilitation and EU payment back to the National Assembly by way of a supplementary provision.
Meanwhile, the estimates for the East Bank Highway Improvement Project and the Amelia Access Road project escaped cuts of $539.9 million and $1 billion respectively, which were proposed by the AFC.
For his part, Benn could only express his disbelief. “This is just unbelievable,” he stated on multiple occasions.
He said that this would negatively affect all 48 hinterland airstrips which he noted was the one of the most important projects to the private sector stakeholders. During a PPP/C press conference held immediately afterwards, Benn said, “I’m too hurt to say much more.”
