While concerned over the proposed hikes in the Berbice Bridge tolls, the Guyana Manufacturing and Services Association (GM&SA) on Thursday voiced its concern about government’s recent move to take control of the Berbice River Bridge, saying it does not bode well for future investments.
“The recent proposed increase in tolls for the Berbice River Bridge have raised concerns in the manufacturing sector since it would certainly result in increased commodity prices,” President of the GM&SA Shyam Nokta said as he delivered the President’s Year in Review address at the organisation’s Annual Awards Dinner last Thursday.
“Perhaps even more concerning is the action by government to take over control of the bridge’s operations, albeit temporarily. If as a country we are going to promote Public-Private Partnerships for major projects, there must be an alternate way of doing things and which include finding workable solutions,” he added.
On October 16th, 2018, the Berbice Bridge Company Incorporated (BBCI) announced that it was instituting increases in tolls, which were to be effective from November 12th, 2018. Government, however, vowed to fight what it termed the “draconian” increases and assured citizens that it would not approve them.
The BBCI subsequently proposed that it be given a 19-year extension on its original, scheduled to expire in 2026, in exchange for it not increasing the tolls. The company asked for a meeting with government to discuss the proposals and Minister of Public Infrastructure David Patterson said he would first have to put it to Cabinet. However, before Cabinet met, Patterson issued an order declaring that the functions of the BBCI “to maintain and operate the bridge shall be exercised by the Government of Guyana as of November 5th 2018, until the date the Minister specifies by notice on the cessation of the threat to public safety.”
The government’s decision to temporarily take over the bridge has been welcomed by residents of the county but there has also been some criticism, with Opposition Leader Bharrat Jagdeo and others calling it a political move intended to score political points ahead of tomorrow’s local government elections.
Nokta used his address to point out that an increase in tolls at the bridge would see the prices of local commodities rising and thus burdening citizens, as produce comes and goes to the ancient county on a daily basis.
But the bridge tolls were not the only concern for the GM&SA President on Thursday as he also mentioned that the lack of access to a reasonably priced reliable energy supply continues to be a hindrance to the business community’s manufacturing plans and this was compounded by government adding Value Added Tax (VAT) to the already high utility cost. “One of the major challenges to manufacturing is energy; the high cost, coupled with issues of stability and reliability has pushed many manufacturers off the grid and to self-generate. Tax measures introduced in budget 2017, such as VAT on electricity, further compounded this issue and continues to affect manufacturers in 2018,” the GM&SA President stressed.
“While there has been a continued call for more value-adding in the primary productive sectors, and for more exports, adjustments to the VAT regime in 2018 resulted in some manufacturers being unable to reclaim VAT on inputs for exported items [with] this serving as a disincentive to not only manufacturing but exports. Key sub-sectors affected included wood-processing and rice,” he added.
Nokta noted that infrastructure and access also proved challenging in the first half of this year since the 2017 rainy season was extended and that, compounded by a lack of maintenance, rendered many key interior roads “virtually impassable.” This led to severe challenges in getting goods to hinterland locations overland and also affected the forestry and mining sectors in a major way, he said.
And with Guyana set to begin oil production in 2020 and government moving to put together a national framework plan for the sector, Nokta said there is need for assurance that local businesses would benefit.
“Critical issues such as local content, legislation for a Petroleum Commission, and a Sovereign Wealth Fund continue to be discussed and debated even as efforts appear to be moving apace on Sovereign Wealth Fund legislation. Guyana continues to receive international attention and there is the movement of investors looking for opportunities here. This is good for business and good for Guyana. We need to benefit from those who have experience and expertise in oil and gas. However, there are concerns within our business community that in this new sector, local businesses could be vulnerable or worse yet, not be part of the value chain in a meaningful way. This has fueled the discussion on local content with some advocating for legislation to ensure Guyanese businesses benefit,” Nokta noted.
“The GM&SA share the concerns that we need to have a strong Local Content Framework in place sooner than later and with Government playing its part in ensuring Local Content Plans are implemented. However, we also believe there is the need to adopt a systematic approach and not be too prescriptive too early. Even as we push to ensure there is a framework to facilitate mutually beneficial partnering, and joint ventures between foreign and local businesses, we, as Guyanese businesses, also need to raise the bar in terms of our preparedness for this new sector,” he added.
Nokta also said the GM&SA is hoping that the upcoming national budget will address some of the problems that have been highlighted while at the same time stimulating the economy to put the country back on track to 5% or more growth.
Nokta said that the organisation sees itself playing a critical role if the projected growth rates are to be achieved. He said when the GM&SA made a presentation to Minister of Finance Winston Jordan this year for the 2019 national budget, it made certain recommendations toward this end.
He explained that the GM&SA put forward a menu of measures – 50 measures in fact, covering broad areas, such as taxation, access to finance, public procurement, energy, standards and regulations, among others. Sector-specific measures were also proposed, covering forestry and wood products, agro-processing, construction and engineering and the services sector. “We believe these measures, if considered, can help to provide a much needed stimulus for the manufacturing and services sector and ultimately a stronger, economically diversified Guyana,” he added.
Meanwhile, several companies and persons were awarded for their contribution to the manufacturing sector for 2017.
Among the awardees was Diekah’s Spices, which was honoured for improvement in product presentation.
Ramsey Ali was bestowed with an award in recognition of his commitment and dedication to the agro-processing sector and for spearheading the GM&SA’s Uncapped initiatives, which GMSA says has resulted in the growth and development of many secondary products now available to the public.
Triple “C” Consultancy was awarded for the company’s efforts in promoting the use of technology to enhance primary crop productivity, while REEL Guyana was recognised for its efforts in showcasing and promoting Guyana’s natural cultural heritage using cutting edge technology and imagery.
Caribbean Containers Inc. took away the award for attainment of food industry certification under the YUM brand as it facilitated the supply of environmentally-friendly containers locally and regionally.
Durable Woods Products received an award for the introduction of new technology in the production of wallaba shingles, while INAVA was awarded for its penetration of the Dominican and St Maarten markets with the non-traditional export of purified water.
Banks DIH copped two awards; one for the company’s penetration into the Caribbean market for indigenous wines and the other for achieving FSSC 22000 certification for its dairy plant.
Ministry of Finance employee Sonya Roopnauth was recognized for her commitment and support to the GM&SA as exemplified in her role as co-chair of the government-GM&SA Joint Technical Working Group.
The Institute of Applied Science and Technology Head Dr. Suresh Narine received an award for his leadership in the undertaking applied research that led to the commercialisation of products in the agro-processing sector.
The coveted Executive President of Guyana Award for Export Achievement went to Gafsons Industries for the significant increase in export of its HDPE pipes and PVC products in CARICOM and other regional markets.