Guyanese Online

In last week’s article, we discussed the Cheddi Jagan International Airport Expansion Project which, after ten years since the design and construction contract was signed, is yet to be completed. The main reason for this state of affairs is the absence of feasibility studies prior to the contract award, to determine the precise nature and scope of the works to be undertaken, coupled with a lack of effective supervision as the works progressed. The Project is financed by a loan from the Exim Bank of China, with counterpart funding from the Government of Guyana. Table I shows the list of projects in Guyana that are financed by loans from the Exim Bank of China since 2005:     

The Skeldon Sugar Modernisation Project

The reported US$200 million Skeldon Sugar Modernisation Project (SSMP) project  commenced in September 2005. Completed in March 2009, it has so far been non-operational because of major defects in construction, including alleged use of inferior materials. This was despite efforts by a South African firm in 2012 to rectify the defects. The SSMP was financed by a loan of ¥270 million, equivalent to US$41.283 million from the Exim Bank of China, as well as two loans from the Caribbean Development Bank amounting to US$28.356 million, giving a total foreign financing of US$69.639 million. This is in addition to counterpart financing from the Government of Guyana over the five-year period of construction.

The assets of the SSMP along with other assets of the closed sugar estates have since been transferred from the Guyana Sugar Corporation to the NICIL in keeping with a Vesting Order signed by the then Minister of Finance. However, an examination of the Auditor General’s reports indicated no evidence that NICIL’s accounts were audited beyond 2003. The related report was issued some eight years later in 2011.  A Google search for NICIL’s website was unsuccessful, suggesting that it is no longer in existence or that it might have been down.

The One Laptop Per Family and the Fibre Optic Cable projects

Two other major projects that failed to deliver are the One Laptop Per Family (OLPF) and Fibre Optic Cable Project. Both of these were financed by the Exim Bank of China – the former from a grant of ¥50.267 million, equivalent to US$7.686 million; the latter, from a loan of ¥215 million, equivalent to US$32.874 million. Numerous irregularities relating to the acquisition, storage and distribution of the computers were uncovered by the auditors; while the Fibre Optic Cable Project had to be abandoned because numerous problems were encountered in the laying of the cables from Brazil through Guyana’s interior towards the coast.

The problem also appears to be a lack of effective accountability mechanisms to ensure that the funds are spent with due regard to economy, efficiency and effectiveness in the achievement of the stated objectives, outputs and outcomes.

For example, in relation to World Bank and IDB loans, one of the conditionalities is for separate financial reporting and independent auditing of the projects within specified deadlines. This is in addition to the submission of periodic reports to these institutions of the status of the projects, financially and otherwise, as well as periodic inspection visits by bank staff. One recalls one such visit resulted in the termination of the World Bank-funded Essequibo Road Project because of credible allegations of corrupt behaviour as well as mismanagement, as detailed in a special report prepared by the then Auditor General.

– To be continued..