A government legal team is “fervently” exploring legal options to secure a stalled $3 billion transfer from the Guyana Geology and Mines Commission (GGMC) to buy land from the cash-strapped GuySuCo.
“They still are trying to get the money and have a heavy legal team working fervently to see how legally possible and how soon they could get it transferred,” a source close to the deal told Stabroek News.
Earlier this month, government solicited the help of two senior counsel and met with members of the GGMC’s hierarchy to find alternative ways to tap the money. The source said the legal team has been “extended” and will meet with government to report and give possible recommendations and analyses of the situation.
Since January, the government has been trying to access the $3 billion from the GGMC for the Central Housing and Planning Authority (CH&PA). First, it sought to secure the funds through a loan agreement—which was challenged in court–and then by a direct transfer on the basis of Cabinet approval.
Following the court action, sources said the Ministry of Natural Resources and the Environment and the Ministry of Housing and Water presented a memorandum to Cabinet which approved the transfer of $3 billion to the CH&PA to support the development of housing infrastructure projects in mining communities.
The Cabinet decision said that the transfer was to support the development of housing infrastructure projects in mining Communities and other areas where miners’ settlements occur.
However, in the face of ongoing scrutiny, the GGMC sought legal advice from law firm Cameron and Shepherd, which advised that the agency couldn’t be directed to move money to another agency.
Former president Bharrat Jagdeo earlier this month confirmed that GuySuCo was the intended beneficiary of the $3 billion.
At a news briefing at PPP headquarters Freedom House, Jagdeo said the funds are state funds and do not belong to the mining sector and the transfer was solving two problems at the same time. He said the money in the GGMC treasury currently is earning less than 2% interest as opposed to the 5% per annum stipulated under the original loan agreement with the CH&PA and that the struggling GuySuCo would be receiving a much-needed influx of money.
Analysts have argued that two state agencies should not be permitted to enter such a transaction outside of the Consolidated Fund.
Such inter-agency transactions, they say, would lead to chaos in the public accounts and make a mockery of parliamentary oversight.
The revelation of the proposed loan in the media sparked concerns about government seeking to circumvent constraints on spending ahead of the May 11th general elections.
The GGMC subsequently claimed that it should not be seen as an isolated case and cited 33 instances where it provided financial assistance totalling over $8 billion between 2012 and 2015.
Additionally, the GGMC has said it made contributions to the Consolidated Fund in the sum of $6.8 billion from 2006 to 2012.
