Today’s column will simulate two scenarios of expected money inflows into and outflows from the Natural Resource Fund. All simulations are based on the NRF Act of 2021. The Act allows for higher early withdrawals from the Fund. Several justifications for high initial withdrawals were outlined by government officials. First, the dire shortage of the present infrastructure has to be addressed. Second, the existing infrastructure – especially those pertaining to drainage – will require significant upgrade; and in some cases, they will have to be reconstructed. Third, building infrastructure is akin to transferring wealth from the present to future generations.
As noted in a previous column, I am sympathetic to these arguments. As was done in the 2022 Budget, future Budgets are expected to outline amounts for several big-ticket projects. The problem I have relates to the limited transparency surrounding the procurement process. The cheapest bidder is not always the best contractor, especially when insider information was provided. I am still puzzled as to why the government needs a BOOT for the proposed permanent-structure Demerara bridge given that it knew how much monies will enter the NRF over the next decade.
