Minister of Governance Raphael Trotman said that should controversial Chinese company Baishanlin and equally contentious Indian company Vaitarna not produce value-added products by the end of the year their contracts could be terminated.
During a post-Cabinet press briefing at the Ministry of the Presidency yesterday, Trotman said, “Both have been spoken to already. Both have given a commitment that within a matter of months they will be addressing the value-added concern… We are in July and I expect before the end of the year the nation will start to see value-added products being produced by those two companies.”
He added that should this not happen, “Well then their contracts will have to be reviewed for termination.”
Trotman said companies have pointed out that more concessions are needed in the sector as it relates to fuel, vehicles and spare parts. He noted that in talks with private sector entities these have been issues that were brought up as a way to keep the economy stimulated and for growth in business.
Stabroek News did point out that log exports are up 80.77% from 2013, according to the 2014 annual report of the Guy-ana Forestry Commission (GFC) and as a result business was in essence booming.
Trotman noted that the figures would be useful at the bargaining table with the various companies. He said, “We are happy that we have them because as we have discussions [we can] say you know you’re exports are up by 80% and therefore you can’t say that you are not enjoying good profits… That is a good indicator… or device, if I could put it that way, when we come to negotiations about concessions.”
He said looking at whether the nation has benefited and how much would require a studied review of the sector to look at the number of jobs created, as well as the taxes paid vs concessions granted.
Trotman was pressed by the Kaieteur News as to when the government planned to make public the various contracts that were kept secret under the PPP administration, as the now government had aggressively lobbied for just that when in opposition.
“It will be coming up for discussion at Cabinet very shortly,” he said. “…The point I am making is that I can’t stand here and say that we are going to be slashing concessions here or concessions there, but we are in fact reviewing all agreements and seeing where there has been compliance or there has been violations and how we could in fact tighten up.”
The usual practice would be for the contracts for both Baishanlin as well as Vaitarna to be tabled in the National Assembly.
The minister did note that while log exports have increased tremendously from 2013 to 2014 Guyana was “still within an acceptable threshold monitored by Norway and others to ensure that we are not going beyond what is an acceptable cutting rate.”
In terms of financial performance, the GFC recorded a net surplus for 2014 of $163 million compared to $172.1 million in the preceding year. The main revenue generator for 2014 was royalties at $334.9 million followed by commission on exports at $220 million, acreage fees at $178 million and licensing and other fees and compensation at $126 million.
Between January and December 2014, 138,502 cubic metres of logs were exported at a value of US$24.4 million compared to 76,615 cubic metres of logs in 2013 at a value of US$12.4 million. By comparison, plywood exports in 2013 amounted to only 5,278 cubic metres at a value of US$2.6 million. In 2013, plywood exports totalled 4,714 cubic metres at a value of US$2.3 million. Barama Company Limited has been the producer of plywood in the country and the figure would suggest that it is also exporting other timber products including logs whereas its investment agreements should have required exclusive focus on plywood and other value-added products.
Baishanlin is yet to begin work on a wood processing plant at its Moblissa site even as the company continues to use the defunct Coomacka sawmill at Linden as its base for packing containers of logs for export. When Stabroek News visited the site in December a lone flag fluttered in the wind as the site remained untouched.
Vaitarna was to begin value-added production after equipment for its plant was installed in the first quarter of this year. The company had advertised for sawmill operators in February.
