Pessimistic

Prime Minister Sam Hinds who spoke after Corbin and dealt mainly with the call for a freeze on electricity rates and claims of a crisis in the economy, urged Corbin to tell his supporters not to be so pessimistic and that they must work harder despite the challenges and setbacks to overcome the challenges facing the economy.

If they work hard and cheerfully, survival and success will not elude us is the message the Prime Minister wanted the PNCR to take to its supporters and to use its influence with the labour movement to get them to assist in putting in place a social contract involving the government, the employers and the labour movement.

He conceded that the government lost the opportunity of heeding the warning in 1994 sounded by WPA MP Professor Clive Thomas in parliament that while a low- wage country, Guyana was not competitive on the world market. He said that government should have heeded that warning and taken steps to address it.

Responding to Corbin’s disclosures about the hardships he observed in Regions Nine and One, the Prime Minister regaled the Assembly with a story about the progress made by fruit juice vendor who started extracting cane juice by hand but now had an electric juice extractor and now sells other fruit juices beside cane juice and of the sawmiller who started transporting lumber on his shoulder and had progressed to the stage where he was now seeking to purchase an aircraft.

On the electricity sector, Hinds’ main point, and he was supported by Housing Minister Shaik Baksh who is heading the team negotiating with AC Power, the government’s partner in Guyana Power and Light Inc (GPL), was that higher rates were inevitable. He said too that the consumer couldn’t avoid being asked to pay rates that were now beyond his means. To support his case he compared the cost of electricity in the years before the PPP came to power to show that the cost the consumer is being asked to pay now were near the real cost of the electricity. He urged the PNCR to support the call for those consumers stealing power to discontinue the practice.

Appalled

PNCR frontbencher Winston Murray who followed the Prime Minister in the debate was appalled at the Prime Minister’s assertion that the consumer should be asked to pay rates beyond their means. He called the statement “arrant nonsense”.

He questioned the comparison made by the Prime Minister pointing out that the PM used the official rate instead of the unofficial rate to paint what he said was a false picture of the cost of electricity during the PNC administration.

Hinds said too that increased productivity by the workers would ease the upward pressure on rates.

Commenting on the state of the bauxite industry, the Prime Minister said that the signs of its unsustainability were evident since 1977 beginning with the closure of the Alumina plant and the mine at Ituni and that by 1992 two-thirds of the industry had almost gone. But he stressed that it is the government’s intention to find a way to get a sustainable and profitable industry.

Referring to the statement by Corbin that the government had apparently turned Linmine over to Omai, The Prime Minister explained that the contract awarded to Omai to undertake stripping and mining operations was 60 per cent cheaper than it was done in the past by Green Construction Company and was helping Linmine to see its way.

He defended the retrenchment of Linmine’s 1200 workers ahead of its planned privatisation, explaining that it made for a tidier arrangement with regards to pension payments. He also urged the PNCR to impress upon the retrenched workers to use the US$5 million severance package being given them for the development of themselves and the community.

About the national security situation, Hinds asserted that it was a sign of the maturity of the society that its fabric had held together despite the catastrophic events of the past year.

He asserted too that the fear engendered in some people was as a result of statements by the PNCR and that it was not adequately representing the issues and the proposals it has made are impractical.

He asserted too that the present situation was not one of deterioration but one of the security forces turning the tide against the criminals. He urged the PNCR to use its influence in the villages to generate support for the security forces.

About the question of shared governance, the Prime Minster like Agriculture Minister Navin Chandarpal stressed the need for the implementation of measures of the Herdmanston Accord, the St Lucia Statement and the constitutional reforms enacted by the National Assembly, which improve the participation of the opposition in the work of the parliament.

The Prime Minister observed that Shared Governance has great appeal but is fraught with great risks as the divisions in the parliament could be transferred to the Cabinet with each Ministry becoming a little fiefdom.

Murray in dealing with the economic crisis his party says is facing the nation questioned the government’s expansion plans for the sugar industry pointing out that while the objective was to bring the production cost down to US$0.12 a pound, he was not sure what projection it used to predict that the world price now at US$0.06 cents would rise to that figure. Chandarpal in his presentation said that by expanding production in the lower cost estates it was hoped to have overall production costs nearer the world price.

Murray also questioned the expansion programme while governments in countries such as Cuba, Trinidad and Tobago, Jamaica and Barbados were downsizing their industries. Chandarpal countered this by pointing out that Guyana has comparative advantages that those countries did not enjoy.

Murray also urged the government to aggressively pursue markets in the region where there is the possibility of meeting the 130,000-tonne market of which Guyana now provides just about 50,000 tonnes. He also urged it to coordinate its efforts with other affected countries to meet the challenges being posed to its preferential market in Europe.

Investments

Murray questioned too the government efforts to attract foreign investments, He conceded that political stability was a factor that underpins development but stressed that the government first had to do all it could to encourage foreign investors. He pointed to its failure to retain the interest of prospective Malaysian investors, Ballast Needam, the Development Finance Limited with which the Guyana Manufacturers Association had signed a memorandum of understanding on the establishment of a development bank; and to attract investment from any of the various missions by businessmen from the United Kingdom.

He also alluded to the government’s behaviour in relation to the Guyana Telephone and Telegraph Company (GT&T), arguing that negotiations to end the monopoly must be conducted in a mature manner. He pointed out that in the ten years it was here GT&T has paid some $20 billion in taxes and dividends even though it was not allowed an increase of its tariff within the first three years of its operations.

Murray’s harshest criticism was for the government’s handling of the electricity sector. He accused it of emasculating the Public Utilities Commission by amending Section 32 of the Act that established it thereby preventing it from interfering with the fixing of rates by the power company.

He accused it too of negotiating to cap the PUC’s ability to order compensation to customers at $20 million and added that it has earned public disgust by its seeking to agree to the reduction of the $1 billion compensation that the power company was ordered to pay its customers. The PUC made the order as a result of a flaw in the power company’s calculation of the tariff it charged customers. Baksh said that the cap was necessary as AC Power claims that it is a disincentive to investment.

Murray was also critical of government’s willingness to revise the efficiency targets in the proposed revised agreement with AC Power downwards. Baksh said that no agreement was reached but that the new targets would have to be set in the context of the new equity AC Power plans to put up. He put this equity at US$10 million including the US$3.5 million AC Power has withheld because of the $1 billion compensation the PUC ordered it to pay.

Emasculation

Murray said that the PNCR would oppose the emasculation of the PUC urging the government to staff it with the best professionals in the various fields.

The former Trade Minister accused the government of waiting too late to raise GPL’s failure to meet its efficiency targets. Baksh denied the charge contending that since 2001 the matter was raised with AC Power and was again broached in 2002.

Explaining the government’s position in relation to the talks with AC Power, Baksh asserted that it was in the government’s and country’s interest to reach an accommodation with the investors. He said if AC Power walks the government would have to come up with the new investment needed to reduce the line losses as well as pay the US$6.8 million the power company owes it creditors as well as absorb its US$0.6 million monthly operating shortfall. Also he said if AC Power was successful at the arbitration panel the government would have to pay the US$20 million being contested.

Baksh said that there was no way the government could meet all those costs.

GAP/WPA’s Sheila Holder was also critical of the government, berating it for bad governance and for its passage of anti-crime legislation despite protests by the Bar Association and other groups that the various pieces of legislation contravened international human rights standards as well as the fundamental rights of the citizen.

Invoking statements by the World Council of Churches, the GAP/WPA parliamentarian contended that peace cannot be ensured in the absence of justice and that in order for the violence in the society to cease it was necessary that there be justice for all.

Holder argued that the government has a responsibility to ensure an environment that is attractive to investors but that it does not see the present political instability as a failure on its part.

Holder contended too that it was the government’s responsibility to balance the interests of the electricity consumer and the investors and that it needed to ensure that the line losses caused by the inefficiency of power company’s operations were not passed on to the consumers.