Your Sunday Stabroek article (April 29, 2018) on the sale of land to Scady, contained a number of inaccuracies. One major inaccuracy related to attributing a footnote in my report (attached for ease of reference) dealing with the sale of the Scady land, when the footnote related to the sale of the land to GBTI for their banking headquarters. Page 34 and 38 of my report (transaction #66) deals with the Scady transaction.
Your reporter erroneously treated footnote #66 shown on page 43, as relating to the Scady property sale. My report clearly references this footnote to
Transaction # 63, “Sale of Tract A, Young Street.” This land was sold to
GBTI for their headquarters based on a public tender. Interestingly enough, the tendered value and sale price of $201M is less than 50% of the private valuation from Mr. Rodriques.
GBTI has spent billions of dollars to develop the approximately 3 acres of land acquired, contributing in no small way to the improvement of the landscape. And while Scady has not yet developed the land acquired, although detailed designs have been completed, at least US$150M has been invested in the Berbice bauxite industry since 2004 as a result of RUSAL’s involvement. In fact, RUSAL helped to save the Berbice bauxite industry and almost 1000 direct and indirect jobs. At least at the time of the sale in 2008, I can also say that the sale price per acre of the land sold to RUSAL’s principal shareholder, is the highest sale price/acre for underdeveloped land on the East Coast that I am familiar with. Part of the confusion on prices that your reporter makes reference to, related to the budgeted cost of an access bridge to access the land from the public road, a set off against the G$150M sale price in accordance with the Cabinet decision of Sept 2008 (10 years ago). The bridge cost will now be borne by the land owner in addition to all of the infrastructure to develop the land.
If one peruses the 86-page report titled “Privatisation in Tables-Phase II,” there are literally hundreds of transactions completed during the period 1993 to 2012. I joined the Privatisation Unit in 1994 and served for over 21 years. Many of our transactions look at multiple development considerations.
From 1993, large areas of vacant land have been developed. Take Liliendaal/Turkeyen for example. From the Caricom Headquarters, the Convention Centre, the 100 acres of backland sold to NHL that is now witnessing billions of dollars of investment for residential construction, the GPL substation project, the Amerindian Hostel, the Giftland mall, the Aquatic Centre, and the US$30M+ Movietown currently underway, to name a few. GuySuCo also sold many pieces of land for housing east and south of the Giftland Mall. Projects that did not proceed included the Lakeview Hotel, the Sand and Sun hotel, and the Specialty Hospital. But for the most part, significant development occurred.
Large tracts of undeveloped land have been improved creating jobs and significant investment. And while price was one consideration, economic development was important. Investment created jobs, income and taxes.
I recall that in the last 25 years, over 200,000 houselots were allocated by the Ministry of Housing, at relatively low prices. Government spent initial sums to develop roads and bridges; water and electricity followed later. In more modern developments, bridges, roads, concrete drainage, water, electricity, parks, street lighting, are all borne by the developer, before the lots are sold. At GPL, I recall that over a 10-year period, the number of customers, rose from 125,000 to 175,000, in no small part, from the significant investment being made by GPL (with financing from the IDB/Government), to install electricity for unserved areas. Today, home ownership is at a record level in the history of Guyana, resulting in a significant middle class and considerable economic growth.
And development did not stop at price. The Eccles and Coldingen industrial estates, where plots were leased at G$1/square foot/annum, was focused on investment and jobs (see pages 77 to 84 of the Privatisation in Tables report for a list of all the companies that benefitted). The peppercorn rent had nothing to do with the valuation. Today, as one flies over Eccles and Diamond, one can only marvel at the vast expanse of development that occurred in the last 25 years. Much work and effort however went into creating this expansion.