Nov 29, 2015 News
The financial troubles enveloping Chinese-owned logging company, BaiShanLin Forest Development Inc., seems to be multiplying with technicians cutting power to the company’s headquarters in Providence last week.
According to officials of the state-owned Guyana Power and Light Inc. (GPL), BaiShanLin was caught stealing power last year and had been assessed and penalized.
The logging company reportedly was supposed to pay over $20M but failed.
Between Thursday and Friday, GPL disconnection crew descended on the Cacique Palace and Banquet Hall, a partially finished hotel behind Princess Hotel.
In August, Kaieteur News reported that the logging company owed around $600M for the property.
It had belonged to a group of private developers who were aiming to capitalize on the 2007 Cricket World Cup.
However, the US$3.5M ($700M) project was not completed despite a $30M cash injection by the then Government.
To recover its monies, the previous administration had established a team comprising the developers and Keith Burrowes, a senior official.
BaiShanLin, which was rapidly expanding its tentacles in the logging and other sectors, expressed an interest. A deal was reportedly reached for US$4.5M, down from the original asking price.
However, BaiShanLin between 2012 and 2013 only paid US$1.5M. There was difficulty in collecting the remaining US$3M.
The spotlight has been on BaiShanLin’s operations in Guyana along with its closeness to consecutive administrations of the People’s Progressive Party/Civic, which was voted out in May, following general elections.
The APNU +AFC, while in Opposition, had criticized the seemingly excessive concessions and other tax breaks granted to the company. The criticisms have refused to die away.
In the beginning, the company was harvesting an extraordinary large amount of logs and exporting them. A flyover last year in Kwakwani confirmed that indeed the company’s operations, as far as forestry activities go, were extensive.
It came to light that the company questionably acquired significant other forestry concessions, making it one of the largest players in the timber export business in the country.
It was discovered that the company was also granted hundreds of millions of dollars in duty free concessions for trucks, excavators, skidders and road making equipment for use specifically in its logging operations.
In return, BaiShanLin promised to build a modern, wood processing factory just off Linden, Region 10 that would have created jobs for locals.
The company has been here for almost a decade but has failed to build the facility.
Guyana later learned that BaiShanLin reportedly collected almost US$70M for the wood processing factory but instead diverted the monies to gold mining, a housing community at Providence and a mall to showcase Chinese products, among other ventures.
With regard to gold mining, the company has acquired a number of concessions.
Gold miners have been complaining that BaiShanLin breached its investment agreement by using its trucks and equipment from logging in the gold mining sector.
It has placed local operators at a disadvantage as they are required in most cases to pay the taxes and duties.
The New Life gated community project at Providence is also facing problems with little work seen on the 100-acre plot the Chinese company bought from local businessman, Brian Tiwarie.
Central Housing and Planning Authority (CH&PA) has given BaiShanLin up to February to finish off critical infrastructural works or face penalties.
The nearby mall in Providence is also halted with little work done since December.
In the meantime, BaiShanLin has applied to the new Government for a two-year extension to build the wood processing facility in Linden. This is because a loan it has applied for from the China Development Bank is on hold.
In recent months, to raise cash, and with little monitoring from the authorities, BaiShanLin started entering the local market, using its trucks and other equipment to vie for jobs.
Last week in one of the biggest scandals for the new administration, BaiShanLin had quietly started to fetch sand for the runway expansion of the US$150M Cheddi Jagan International Airport.
The logos on the logging trucks were covered in paint and stickers, in a crude attempt to disguise them. Many of the trucks still carried registrations showing BaiShanLin as the owner.
They had secretly been working there for months now with the nearby CJIA management saying late last week it had no idea. An investigation has been launched.
Nobody knew something was wrong except for local truck operators who claimed they saw no advertisements and in any case, BaiShanLin is acting illegally when it uses its trucks that were specifically allowed in for logging, to be hired in another business.
Amidst it all, there is little evidence that anything much is being done by regulators, including the natural resources sectors, to monitor the seeming lawless situation the company has been operating under.
While at the CJIA runway extensions site on Thursday, GPL contractors also went to the contractor’s compound to cut the power off.
China Harbour Engineering Company (CHEC), the contractor, reportedly owed over $1M.
The contractor had not received a bill, an official told the GPL crew.
CHEC was allowed to pay the money on Friday.
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