The government has been given the go-ahead by the Inter-American Development Bank (IDB) to restart the US$1.6M telecommunications reform project and Prime Minister Sam Hinds expects that the project would be active again in a month or two.
But Hinds says clearance for the much larger US$22.5M Information and Communications Technology (ICT) project would depend on how the telecommunications reform progresses as well as negotiations with GT&T on opening up the sector.
The ICT project was before the IDB’s board last year but had been stalled by court action in the US by GT&T’s parent company, Atlantic Tele Network (ATN) which challenged the project claiming it would infringe on the company’s monopoly rights in Guyana. The court threw out the motion on grounds of lack of jurisdiction but the IDB has now taken a position that approval of the project would depend on successful negotiations to open up the market to data and voice transmissions.
Hinds indicated that GT&T had forwarded their version of a draft memorandum of understanding reflecting the outcome of the Trinidad round of negotiations the two sides had held prior to the court action.
“We are still mulling things on both sides....I see some things in the MOU which I am not happy with, but we are working...” Hinds told Stabroek News last week.
The Trinidad negotiations had centred on the need for GT&T/ATN to give up the monopoly on data and voice transmission in return for compensation, which the government has indicated it would not provide in cash. The government’s 20% stake in the company has been raised as a potential source of compensation as well as possible tax reductions. The company also wanted immediate rate re-balancing in return for liberalising data and to retain a hold on voice transmissions for a minimum of three years. The company, sources say, has not been in favour of a proposed forensic audit of its operations.
It is not clear how long the negotiations with the government and GT&T/ATN will drag on but there are signs that the government may have to give in to a number of GT&T’s demands.
The government in August 2000 benefited from a US$1.1M grant from the IDB to modernise and promote competition within the telecommunications and information services sector. The grant, which is to be supplemented by US$500,000 in counterpart resources, was also to provide for the establishment of the regulatory framework to support the liberalisation of the telecommunications sector.
This project was to be completed by February 2002 but was put on hold in July 2002 because of the lawsuit by ATN. However, at the time of suspension, the project had covered substantial ground with a public consultation paper on a telecommunications policy widely discussed with special interest groups.