Dear Editor,
At a recent press conference, the President of Guyana was purported to have stated that if the Government of Guyana (GoG) does not get what it considers a ‘fair price’ for the used BMW cars it has in stock, it will keep them.
BMW cars are as the saying goes, ‘the ultimate driving machine’. However, they are expensive to operate. In addition, they need skilled technicians who have access to a well-equipped workshop with the specialized tools and vital spare parts necessary to maintain them in tip-top operating condition.
Unfortunately, Guyana has none of these prerequisites and a discerning potential buyer knows that without proper service and local access to needed expensive spares, these cars can quickly become inoperable. Therefore, GoG is unlikely to get what it considers a ‘fair price’ for these vehicles and will have to settle for what the savvy Guyanese buyer is willing to pay for the prestige of driving a BMW, if it is serious in unloading them to recoup its losses.
It is reasonable to assume that an acceptable financial outcome for the used GoG BMW cars appears very bleak indeed, as it is unlikely that GoG will sell the cars for a price dictated by market forces in order to reduce the tremendous (or eventual total) loss the Guyanese people will have to bear for a dubious decision to purchase these cars in the first instance. In the circumstances, it would seem wise for GoG to reduce its losses and sell the cars for what buyers are willing to pay for them, thereby recouping part of its investment. Failure to do so will result in GoG keeping the cars. With little or no maintenance and rapid deterioration of their sophisticated electronic and mechanical components in the hot, humid tropics, as well as thefts of critical components, it will in all likelihood result in their value depreciating sharply. And sooner or later GoG will have to write off this investment resulting in another financial burden for the Guyanese people.
Alternatively, GoG may choose to keep the cars and use them as and when needed. This will be another misjudgment for the country since the depreciation of assets, operation and maintenance costs will be far greater than the revenue generated for debt service and to cover the costs of keeping the cars operational. Hence, a subsidy will be required from the Ministry of Finance to cover the anticipated deficit, thus adding to the financial burden of Guyanese.
Yours faithfully,
Charles Sohan
