Parliament approves $2.5b in supplementary spending during testy session

-NDIA has assumed responsibility for 29 pump stations following GuySuCo’s D&I exit

After more than five hours of intense debate the National Assembly yesterday approved $2.5 billion in supplementary spending for the 2018 fiscal year.

Government is now set to spend at least $271 billion this year including the $267 billion budget and the first supplemental provision of $1.931 billion which was used to meet a portion of the severance pay for sugar workers.

Among the spending items approved last evening were current and capital estimate increases for the National Drainage and Irrigation Authority (NDIA) totaling more than $800 million.

The authority, which has assumed responsibility for drainage and irrigation tasks previously undertaken by the Guyana Sugar Corporation (GuySuCo), has found the challenge daunting.

Minister of Agriculture Noel Holder told the House last evening that though he was asking for $600 million in additional current expenditure he could not assure that he would not ask for more.

“The fact that it is a work in progress affects our ability to be accurate in our budgeting …as we get more into it we realize the intricacies involved,” Holder said of the expenses.

The opposition pounced on this explanation noting that it was a clear indication that the Ministry was not sure of what it was doing.

PPP/C MP  Dharamkumar Seeraj specifically noted that the uncertain budgeting was directly linked to government’s failure to conduct a proper impact study before closing four GuySuCo estates.

Holder however presented this restructuring as a means to properly maintain systems and retain workers.

NDIA, he explained, has assumed responsibility for 26 additional drainage pump stations with 55 pumps, three additional pump stations with eight pumps, and the maintenance of 4, 560 additional miles of drainage and irrigation canals along with 1000 miles of access dams and 760 bridges and more than 14,000 airfield structures.

He noted that NDIA and GuySuCo have signed a memorandum of understanding which would see those pumps on the closed estates being maintained by GuySuCo at a cost to the NDIA.

The opposition was less than impressed with this reasoning but the expenditure was approved without their support.

 

Guyana Tractor

Under capital estimates, the ministry also received an additional $226 million for the NDIA. This sum represented the settlement of a court matter between Guyana Tractor and Equipment and the NDIA.

This settlement will see government spending the approved sum for the purchase of six long boom excavators and four mini excavators along with spare parts.

While government attempted to represent this settlement as a positive development former Attorney General Anil Nandlall called on Minister Holder to defend this position.

Holder in turn called on current Attorney General Basil Williams who threw the ball back at Nandlall claiming that the situation developed because of the actions of his government.

According to Williams during the previous administration, GuyTrac was awarded a contract to supply NDIA with equipment, specifically 20 mini excavators however Cabinet subsequent to the award withdrew its no objection and GuyTrac owner Hareshnarine Sugrim then commenced an action on the 1st June 2015 suing the NDIA and the Attorney General for breach of contract.

The court awarded damages to Sugrim for breach of contract in the sum of $226, 161,235, damages for loss of profit in the sum of $44,602,000 as a result of the breach of the contract on the part of the defendant, resulting damages in the sum of $19M and interest on any award at the rate of 6% per annum from the date of filing to the date of judgment and at the rate of 4% per annum until fully paid.

“Given the Order of the Court and the manner in which the case was conducted … it was in the best interest of NDIA and the Government of Guyana to amicably resolve this matter”, the AG’s Chambers said in a statement earlier this week.

It was explained that on the instructions of NDIA it was agreed between the parties that NDIA would purchase from Sugrim six long boom excavators and other equipment which they needed for the sum of $226, 161,235 in full and final settlement of the matter.

Nandlall yesterday argued that the no-objection was withdrawn by the previous government because of a failure by GuyTrac to lodge a bond as provided for in the contract. The former AG stressed that government’s actions in this case were “defensible if the lawyer were competent.”

In the end the request was approved and the debate moved on to the second largest request that of $778 million to meet estimated legal fees for the preparation of Guyana’s case in the border controversy with Venezuela for the International Court of Justice (ICJ).

Under intense questioning, Minister of Foreign Affair Carl Greenidge explained that the sum will be sourced from the signing bonus received in 2016 from ExxonMobil via the agreement with its subsidiary EEPGL.

Asked by opposition Chief Whip Gail Teixeira whether the sums were from the bonus, Greenidge noted that he didn’t know it was normal to be “asked the source of funds.”

He however explained that the Ministry having requested permission to spend the money would see the transfer of “funds from accounts where (the bonus sits)  to the Consolidated Fund and then to be expended.”

According to the Minister the entirety of the funds would not be transferred because “the exercise [ICJ case] takes place over a number of financial years so we don’t plan to transfer it all in one year.”

He further explained that “the ministry anticipates and we have to anticipate because lawyers are paid on a time basis essentially.

At this point in time we anticipate the demand on the lawyers’ time should not cost more than the figure shown. Any more than this we are not able to anticipate. In 2019 and 2020 there will be estimates of the sum and in those years we will make request for expenditure as the case goes through its various phases.”

Meanwhile, the Ministry of Public Infrastructure received $346.5 million to facilitate the purchase and installation of two additional boarding bridges for the Cheddi Jagan International Airport Expansion Project while the Ministry of Social Protection received $81.6 million for the construction of a 10-foot concrete perimeter fence with barbed wire at the New Opportunity Corps and the Guyana Defence Force (GDF) received $484.2 million to facilitate the acquisition of four aircraft.

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