Nov 20, 2015 News
– company was blocked from exporting logs
Government has not yet granted Chinese-owned logging company, BaiShanLin International Forest Development, an extension of two years to complete its planned processing facilities along the Soesdyke/Linden Highway.
The facilities are a critical part of BaiShanLin’s investments in Guyana and would have been a key factor in the determination of granting hundreds of millions of dollars in duty free concessions and other tax breaks to the foreign investor.
The factory has been delayed for several years now, despite promises.
Recently, Minister of Governance Raphael Trotman, who has responsibilities for natural resources, when questioned about the BaiShanLin’s progress, disclosed that the company wanted another two years.
The new government (which had criticized BaiShanLin’s activities before it came into power in May) was even contemplating granting the two-year extension which had sparked a flurry of questions.
According to the Ministry of the Presidency, the Department of Natural Resources and Environment has taken note of the maelstrom that arose from reports that Government has granted BaiShanLin a two-year extension to fulfill its obligations, and also, permission to continue the export of logs as normal.
“Both reports are inaccurate and not factual. By way of clarification, the Department of Natural Resources & Environment would like to inform the public that it has not granted the company a two-year extension as mistakenly reported in the media, and wishes to advise that the reference to “two years” made by the Minister of Governance, was merely to make the public aware that a two-year extension was being sought by the company.”
Rather, the department has not considered the request and has requested information from the company
about its proposed business plan and evidence of financing.
“It is only upon receipt of those documents that such an application can be objectively scrutinised, and a decision made about the future of the company’s operations in Guyana,” the statement indicated.
With regard to the valid concerns about the export of logs, the department insisted that the company has not shipped logs in several months; following an earlier restriction placed on exports. However, a quantity of locust logs remains in a holding area and their quality is rapidly degrading. The department is now planning to release a sizeable quantity into the local market for use by furniture manufacturers, while the surplus will either be allowed to depreciate further, or will have to be exported.
BaiShanLin was on the former Opposition’s radar, after it became known that the company was granted significant concessions and allowed in return to conduct what appeared to be unprecedented harvesting activities.
Reportedly, the company has collected almost US$70M for the processing plant from a Chinese bank but invested it on other ventures, including gold mining and housing development.
BaiShan Lin had given conflicting reasons in the past to justify the delay of establishing this wood-processing facility.
Commissioner of the Guyana Forestry Commission (GFC), James Singh a few months ago had also revealed that the company indicated to him that the current holdup is as a result of “financial difficulties”.
Singh had explained, “They told us that they have been experiencing some financial difficulties in the sense that they were unable to meet some benchmarks for certain lending agencies…We met with them and they had some concerns. They indicated to us that they met with some government officials and are expected to submit a revised programme in relation to the facility to them and wait for it to be reviewed.”
He had said, too, that a team from the China Development Bank accompanied the Chinese company to the meeting. The Commissioner said that he told BaiShanLin to make the wood processing facility their “priority.”
Singh said that the company promised that once the “financial difficulties” are over, it would also submit the revised programme on the facility to the Commission.
A few months ago, Trotman had told the media that companies, this time around, will not escape sanctions: should they fail to make good on their promise then their contracts will be reviewed for termination.
Presidential Advisor on Sustainable Development, Dr. Clive Thomas, recently warned against a two-year extension for BaiShanLin. The company is also facing problems with the Central Housing and Planning Authority for falling behind on its housing development at Providence, East Bank Demerara, and is under investigation by the Labour Department, following complaints.
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