GGMC gets legal advice against Cabinet decision for $3B transfer

A furtive bid by the government for the transfer of $3b to the housing authority suffered another setback yesterday after the Guyana Geology and Mines Commission (GGMC) received legal advice saying that it couldn’t be directed to move money to another agency.

Since January, the government has been trying to access the $3b from the GGMC for the Central Housing and Planning Authority (CH&PA) – first by a loan agreement which has been challenged in court – and now by a direct transfer on the basis of Cabinet approval for this at a meeting on Tuesday. Yesterday’s issue of Stabroek News had incorrectly said that Cabinet had approved a $3b loan. What Cabinet did was to approve a $3b transfer. The proposed loan has since been abandoned. The Cabinet decision on Tuesday said that the transfer was to support the “development of Housing Infrastructure projects in Mining Communities and other areas where Miners settlement occur”. In the eye of the controversy, the GGMC sought legal advice from law firm, Cameron and Shepherd.

The advice yesterday authored by Senior Counsel Ralph Ramkarran noted that Section 31 (1) of the GGMC Act says that the subject minister may give directions to the commission of a general nature.

“Assuming that the Cabinet decision constitutes a direction by the Minister, such direction does not fall within the scope of section 31(1) which relates to `directions of a general character as to …policy … in the performance of its functions…’ A direction to pay over to another agency for the development of housing infrastructure is an operational (matter); it is not a direction on policy. The Minister has no power to direct the Guyana Geology and Mines Commission to carry out a specific act”, the advice stated.

The advice further noted that the functions of the Act are set out in section 4 and do not “remotely relate to the development of housing infrastructure or anything connected to it even in mining communities of for miners”.

According to Ramkarran’s advice the functions of the GGMC relate to the development of mining and mineral resources. This point had also been argued by other analysts.

This legal advice sources say leaves the GGMC in a quandary and the government with a major problem on its hands.

Loan

The initial transfer attempt revolved around a loan from GGMC to CHPA instigated by the government. This loan proposal was reported by Stabroek News in January and triggered criticisms. A legal challenge to the loan resulted in a court order on February 27, 2015 for the GGMC to justify the decision for a loan between the two agencies. This situation appears to have encouraged the government to abandon the loan route and to move for a transfer.

Sources say that following the presentation of a memorandum by the Ministry of Natural Resources and the Environment and the Ministry of Housing and Water, Cabinet on Tuesday approved the transfer of $3b to the CH&PA to support the development of housing infrastructure projects in mining communities.

The government has not announced this transfer decision.

On February 27, Acting Chief Justice Ian Chang directed the GGMC and the CH&PA to account for the contentious $3B loan agreement signed by both agencies last month.

Justice Chang granted the orders based on applications by Working People’s Alliance member Desmond Trotman and city councillor and CH&PA board member Ranwell Jordan, who had moved to the court to prevent the disbursement, which critics say violate the GGMC Act and is a misuse of state funds.

The agreement had catered for the GGMC to loan the CH&PA $3B for a period of one year to be used for the development of the housing sector.

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