Atlantic TeleNetwork (ATN) Chairman, Cornelius Prior, said yesterday that while there had been agreement to liberalise national and international data transmission as a short-term measure to break his firm monopoly’s, a lack of faith and trust in the government as a negotiator had led to him intensifying a Washington lobby against the Information and Communications Technology project for Guyana.
The government is seeking a US$18 million loan from the Inter-American Development Bank (IDB) for the US$22.5 million ICT project, which is premised on data liberalization. But because of the ATN lobby, consideration of the project has been put off by the IDB’s Executive Board.
Prior; GT&T’s Chief Executive, Sonita Jagan; and Senior Counsel Miles Fitzpatrick, yesterday briefed the media on ATN/Guyana Telephone and Telegraph’s (GT&T) position on the impasse, insisting that the firm had not acted in bad faith nor was it attempting to blackmail the Guyanese people with its stance against the project as President Bharrat Jagdeo has asserted.
Prior said there were several components of the ICT, which the firm opposed as these contrasted with the monopoly the firm had on national and international data and voice transmission. He said that even though the negotiations were going on, because of the history of failed negotiations with the government, he could not give up the leverage he had to lobby Washington against the project until he had a deal with the government. He said he only intensified this lobby when the
government failed to make available the memorandum of understanding to reflect the outcome of the negotiations to the end of April for perusal and signing within two weeks as was understood.
'Fitzpatrick, who has advised the company that it has a monopoly on voice and data including voice over internet protocol and data over the internet, said that he was quite elated after the two intensive days of negotiations in Trinidad when the teams came up with a package to be implemented in a matter of weeks to free up international data. He said the latter was to be the centrepiece of the memorandum of understanding, which he knew the government’s senior telecommunications adviser, Hank Intven, had prepared by the end of April.
He said he also knew from the leader of the government’s negotiating team, Attorney General, Doodnauth Singh, that Cabinet was to give consideration to this MOU but after several calls to Singh, there was a letter from him indicating that Cabinet would consider the MOU in two weeks.
The attorney said that the short-term measures were to free up data transmission and if that was what the President wanted, that was what he had. However, Fitzpatrick said he did not know what happened after that.
Prior confirmed ATN’s willingness to give up the monopoly on national and international data transmission immediately in return for "a few things" but he would not elaborate on what compensation package the firm was seeking. He said if it took the government two months to produce a MOU, then ATN was right to go the route of lobbying the IDB and not trusting the government. Stabroek News understands that high officials within the government have objected to some of the positions adopted by the government negotiating team in the talks.
"Had the MOU been signed in a matter of two weeks, the whole issue of the ICT project would not have arisen," Jagan elaborated on the issue, pointing out that the IDB consideration of the project came in June whereas the MOU was to have been signed in May.
Prior described the negotiations as having "stopped dead in their tracks" after the teams came back from Trinidad.
He also said that the government had known about his lobby with Washington, which started in 2001, against the ICT project. Prior said the firm was demanding that the government return to the negotiating table, and restated his willingness to go to the International Centre for Settlement of Investment Disputes (ICSID) to have the matters resolved.
The ATN chairman, who came to Guyana specifically to respond to the President and Prime Minister Samuel Hinds, said the positions of these officials did not make sense to him and outlined efforts on ATN’s part, since 1997, to engage the government in meaningful dialogue.
Prior said that the company was asked to hold off a rate increase pending the elections and after the elections Fitzpatrick and Ralph Ramkarran, whom the government appointed, attempted to negotiate issues of mutual concern, but failed to get serious responses from the government.
He said GT&T attempted to work with the Public Utilities Commission (PUC) in good faith but this also did not bear fruit.
He said the company then expressed its concerns to government consultant, William Garrison on its rights, which ought to be respected. He said Garrison disappeared after dialogue commenced.
Intven was then hired and Prior said he was found to be much more reasonable and had recommended immediate rate rebalancing. He said it was Intven who suggested that serious negotiations be entered into to break the company’s
monopoly and to introduce market reforms into the sector.
Prior said that all of the issues on the table were discussed, including the rate of return, advisory fees, and expansion plan of GT&T and whilst agreement was not reached, the parties agreed that a memorandum would be signed in a matter of weeks to show the way forward. He said this for ATN/GT&T meant two weeks.
He said that ATN/GT&T’s position was that in this liberalized era, a monopoly did not make sense, but he said the firm had invested US$150 million into the company and was willing to negotiate an end to the monopoly at a price. ATN hired a firm to advise it on a compensation package for breaking its monopoly and among the issues on the table would be cost base rates, price cap regulations, a more stable regulatory environment and phasing out data transmissions over time, sources said.
Prior denied that the firm has had negative relations with major US carriers, the US Federal Communications Commission among other interests as the President said. He also said that the seven dollars interconnection charge was what the PUC ordered for cellular services.
He also expressed the view that it would be very naïve for the government to feel that investors would fall over themselves to compete with GT&T once the sector opens up, though he would not bet on it.
Prior said ATN had earned money on its investment in Guyana but had ploughed this back into the country. He estimated that some US$50 million was taken out as the controversial six per cent advisory fees in the period, but insisted that the government had received its fair share of revenues via taxes and recently via dividends. Since 2000 to now, the government received US$7.4 million in dividends from GT&T, with US$3.1 million paid over for last year’s operation.
He said that the guaranteed 15% rate of return and six per cent advisory fees was not terribly different from what was granted to AC Power, the managers/investors into the power company.
Prior said he was lobbying in Washington to protect his shareholders’ interests and he would protect those interests wherever he went.
He said once the government could negotiate a fair settlement with ATN/GT&T, then it would bless the ICT project.
ATN is arguing that the ICT project, on which the US government has a veto, will infringe on its contractual rights and the government can deny such developmental assistance to Guyana. The project is expected to come up at the IDB board on Wednesday. It is not clear if President Jagdeo has signalled to that board whether he is willing to go to arbitration or not.
Jagdeo had said that if he decided to go to arbitration, it would not just be over the rate of return, but also advisory fees, taxes and other issues of concern to the government.