The government must be commended for withdrawing from the Memorandum of Understanding with Canada-based, Guyanese entrepreneur Mr Mohammed Osman, for the establishment of a solid waste recycling plant. It was inconceivable that the MoU could be clinched with a potential investor who as reported by Stabroek News had never constructed such a plant. Any engaging of an investor on such flimsy underpinnings could not be acceptable. There were other warning signs about this particular arrangement. The recycling plant was apparently to operate without any financial burden to the state – stupendous and incredulous. Moreover, there were immediate concerns over how and wherefrom the investor would have access to US$30M. Land also had to be identified and conveyed for the purpose of the recycling. All of this portended a pie in the sky project.
In his dismissal of the MoU on November 20, Head of the Presidential Secretariat, Dr Luncheon conceded that the due diligence done prior to the MoU was unacceptable. “The due diligence, I will be the first to concede, it did not attract the same level of due diligence as it would have had it been for the execution of a contract. A number of areas were inadequately attended to and the revelations in the media pointed this out rather forcibly for the attention of not just the Cabinet but for the Guyanese people,” Dr. Luncheon said, according to GINA. No matter how shabby the due diligence leading to the MoU, it must be recalled that it was Cabinet that had given its blessings to the number one ranked contender and this must surely call into serious question its processes and judgement. Worse, the hierarchy of the Ministry of Local Government has been completely exposed for egregious conduct.
Dr Luncheon interestingly also said that abandonment of the MoU obviated the need to proceed with a feasibility study prior to the execution of an investment agreement with the firm, Natural Globe. It was the first time that a feasibility study had been mentioned in the context of the recycling plant. Undoubtedly it made sense for a feasibility study to be done as it would have injected a needed sense of realism into the project. Such a study should have been available first to the government even before the signing of the MoU and would have laid to rest the fantasy about there being no cost to the state.
The signing of the MoU by the Ministry of Local Government on November 11, 2013 was devoid of any reference to pivotal matters such as a feasibility study and the technology to be employed. This utter lapse is what the government must further explain or act upon. How is it that two ministers of local government: Ministers Persaud and Whittaker and their Permanent Secretary Mr Collin Croal could preside over such an evidently unsound arrangement without the slightest hint of any restraint or reservation. If that wasn’t enough, the ministry mounted a spirited defence of the MoU on November 14 in which it poured scorn on questions asked by the media and postulated that there was a campaign to drive off investors.
It stated in part that the ministry “is satisfied that there is credible evidence with regards to Mr Osman(‘s) experience, involvement and expertise in the business of recycling and his initial commitment to invest approximately US$30M in this particular project and the standard operating procedures were followed in identifying Natural Globe Guyana Inc”.
As far as the ministry was concerned Mr Osman was a shoo-in for the deal and both ministers and Mr Croal offered laudatory remarks in this context.
Minister Persaud was reported by this newspaper on November 12 as stating that the government had made a commitment to identify suitable land and offer a lease arrangement to the company for the construction of the plant. Further, there were going to be five transfer stations. To top it all off, Minister Persaud said that there would be no direct cost to the Guyanese public.
Minister Whittaker was quoted as saying “What we are about to see takes us a huge stride forward with respect to recycling of waste. As I understand it, it is an environmentally safe way in dealing with waste and as I understand it, the company has much experience dealing with solid waste and it is for these two reasons we are looking… to use the experience of this company”. The minister in one fell swoop vouched for both the technology to be employed by the company and its supposed experience – two matters still of great doubt. As far as Minister Whittaker was concerned, it was a done deal as he was reported by GINA as urging the company to deliver in a “timely manner”.
GINA then went on to further deepen the involvement of government by saying that the project was also supported by the Ministry of Natural Resources’ Environmental Protection Agency and the Ministries of Finance, Housing, Agriculture and Public Works among others.
As far as Mr Osman was concerned there was to be nothing like a feasibility study. He was quoted by Stabroek News as saying “In terms of how soon the project can be started, we are still looking at the acquisition of land to construct our recycling plant. It will run at US$30 million, but that will probably expand because our programme is not just recycling one material, but several… non-degradable materials”.
It took only one question from this newspaper to establish from Mr Osman himself that his company had only built a prototype of the plant that was intended to be constructed in Guyana. This calls into question the type of examination that was done by the Ministry of Local Government which had been assigned the task by Cabinet to evaluate the varied proposals.
Based on Mr Croal’s own explanation at the MoU signing on November 11, expressions of interest were received from nine companies for the solid waste recycling. These companies were then invited to submit detailed proposals and were subsequently ranked based on this and additional information. With all that is now known, it is inconceivable that Mr Osman’s proposal could have been ranked ahead of eight others. Cabinet, if it is interested in getting to the bottom of this matter, should review the proposals in the possession of the Ministry and seek an explanation from it on the decision in favour of Mr Osman.
It has since transpired that Mr Osman is in further hot water over the name of his business which has been claimed by another company that had also presented a recycling proposal and which has real experience in the Caribbean. Mr Osman is also being accused of misrepresenting the role of one of the company’s directors who happens to be the daughter of a sitting government minister.
All of that aside, it is alarming that Messrs Persaud, Whittaker and Croal could have presided over a process as flawed, shoddy and shadowy as this. The government should mount an investigation of their actions and sanctions should be applied wherever necessary.
A solid waste recycling plant is sorely needed and this debacle notwithstanding, the quest should be resumed afresh under the aegis of the National Procurement and Tender Administration Board.
