Duty-free concessions…BaiShanLin given free-for-all under the PPP/C

Dec 09, 2015 News

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– senior Govt. official
Days after it was announced that the State Assets Recovery Unit (SARU) has launched an investigation into the operations and acquisitions of the Chinese-owned BaiShanLin Forest Development Inc., worrying details are emerging that suggest that it was all a wild-west situation with respect to concessions.

A senior Government official yesterday indicated that the logging company within the last two years was allowed to bring in scores of trucks and heavy duty equipment, clearing them without the necessary Customs documents being completed.
“We are finding some scenarios where the vehicles and equipment were allowed under what is known as “Permit For Immediate Delivery” (PID). It means that the vehicles would come on the wharves where they are released without the documents being perfected.”
The problem with the situation is that more than a year later, in some cases, the company has been using the equipment and trucks to do their work. But the Guyana Revenue Authority (GRA) is still to close the files on the importations.
The concessions and tax breaks to BaiShanLin have been angering business owners and other Guyanese who are forced to abide by the GRA’s strict rules when it comes to the importation of the vehicles and other equipment that attract duties.
Last year, over $60B of the national budget of Guyana was granted in duty free concessions to investors, remigrants, farmers and miners, according to state audit reports, raising questions as to how the previous administration, under the People’s Progressive Party/Civic , was managing the country’s revenues.
It had also raised the issue of corruption in the process, with state auditors complaining of the absence of a proper accounting system.
Normal Guyanese buying a car for US$5,000 are asked to pay up to US$10,000 ($2M) to remove it from the city wharves, while under concessions, that US$10,000 is waived.
“We are looking into the process. The Investment Agreement…what was brought in…and other things. There are many questions,” the Government official said yesterday.
FACING FLAK

BaiShanLin is facing flak from several quarters over its operations here which range from logging, gold mining, trucking sand, barge operations, cement mixing and housing.
The company initially came in about a decade back, partnering with Jialing and  others to conduct logging operations.
However, the company rapidly extended in recent years, and was granted suspiciously large concessions, including land and tax breaks.
Last year, Bailiang Chu, the country manager, was granted citizenship. He was able to acquire mining lands.
Recently, truck operators complained about the company being allowed as a sub-contractor to truck sand for the runway expansion of the Cheddi Jagan International Airport.
Officials believed that BaiShanLin breached its investment agreement with the Government of Guyana which bars the company from using the trucks and concessions from doing anything outside of logging.
The company has failed to establish a wood processing plant under its agreement although collecting almost US$70M from China Development Bank.
BaiShanLin is claiming that negative publicity has affected the balance of the US$140M loan it has taken from the bank for its investments in Guyana.
Its gated housing scheme at Providence is facing a February 2016 deadline after numerous delays, and a promised mall nearby is at a standstill.
In the meantime, the company has secretly started working its river barges for private companies, fetching stone and other materials.
TWO-YEAR EXTENSION
It has asked Government for a two-year extension on the processing facility for Linden, in order to finalise the Chinese loan.
The company came under scrutiny last year after details were disclosed about the extent of its operations.
A flyover last year over the Kwakwani operations found a huge stockpile of logs in that Upper Berbice, Region 10 area.
This year, the new administration, under David Granger, has restricted log exports for the company, in light of alleged wrongdoing.
Last week, SARU’s Head, Dr. Clive Thomas, disclosed that initial checks found worrying signs of regulations being flouted, warranting a deeper probe.
“As such, we have launched an investigation into that entity. We have already prepared a detailed document on them and their operations since they came into Guyana. The report shows that they are a major source of corrupt land deals. This company has been operating very crookedly in Guyana.”
The Presidential Advisor said that there have been numerous startling irregularities under the Chinese logging company, but said that based on the nature of the investigations, he would not be inclined to reveal the findings at this stage.
Although not getting into specifics, he had this to say.
“What I can say is that they probably own more land than the Guyana Sugar Corporation at this point and they acquired it through a lot of Memoranda of Understanding signed with the PPP.”

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