May 22, 2016 News
Official documents, including agreements signed by the People’s Progressive Party/Civic (PPP/C) Government, have come to light.
It is revealing how the previous administrations doled out duty free concessions to certain foreign companies.
One company, BaiShanLin specifically, was scandalously given almost unlimited permission to import vehicles and equipment, including in one case an extraordinary request for one billion tons of cement and two billion pails of paint.
Guyana uses 300,000 tons of cement annually. It would use one billion tons of cement in 333 years.
Another item that jumped out was a request for two billion pails of paint. No description was offered of the size of the pail but this amount according to a hardware giant in the city could paint the entire Guyana and its forests 100 times over.
From indications, very little monitoring took place to assess progress and to conduct compliance to ensure commitments were adhered to with the projects.
In recent days, Kaieteur News has managed to acquire a number of documents, including
those for BaiShanLin International Forest Development Inc.
That company failed to build a wood processing plant, a key commitment it agreed to when Guyana waived billions of dollars in taxes and other concessions.
The company said it was experiencing financial problems as far back as 2011 but the PPP/C government still went ahead and approved billions of dollars more in tax concessions, as recent as last year.
Several of its ambitious projects, from housing to shipbuilding, are at a standstill and the company owes hundreds of millions of dollars to the Government of Guyana and to private businesses.
But despite its problems, the previous Government continued persevering to keep the company around, without any clear indications of what exactly Guyana benefitted. |
The company has gobbled up over 700,000 hectares of forest lands, most of it questionable and has entered the logging, transportation, mining, housing, shipbuilding and hardware markets. It has almost 20 companies registered in Guyana.
There have been accusations of corruption in the transactions by critics.
The new administration says that BaiShanLin is leaving Guyana. However, there has not been any word of an assessment of the company which came here in 2006 to do logging.
From 2006 to 2012 the company exported thousands of containers of prime species of logs to China. It is not known how many concessions the company enjoyed between 2006 and 2012.
But they did because hundreds of trucks, excavators and heavy duty machinery bearing the BaiShanLin logo were seen throughout Guyana.
In July 2012, the company wrote former Minister of Trade, Industry and Commerce, Irfaan Ali, asking for more concessions.
That same letter to Ali was copied to former President Donald Ramotar; Prime Minister Sam Hinds; the Finance Minister; Minister of Natural Resources and the Environment,
Robert Persaud; the Housing Minister; Minister within the Ministry of Finance, Juan Edghill and Desmond Mohamed of the Guyana Office for Investment.
The company also said it plans to build an industrial park to accommodate a wood processing facility, a fishery complex, an equipment processing factory, an industrial school and a medical centre.
In all, the company was planning to employ over 20,000 workers there, expecting it to be completed in five years. It wanted 1,200 acres in the Eccles/Providence area to develop the project.
It also wanted to construct a Commodity Mall to display its products and also make available rental spaces to the Guyanese community.
The company was to complete the mall at Providence by September 2013.It was to employ over 500 persons.
BaiShanLin also told Irfaan Ali, who was charged with housing developments, that the company wanted to build a gated community that will cater for up to 300 homes.
The western and eastern design homes would use solar power and act as a model for future housing developments, the company promised.
The company disclosed that the equipment it had on hand from previous concessions brought in duty-free were unsuitable for the forestry terrain and could only be sold as scrap.
The company submitted a request for 100 items for duty free concessions, saying it had gone ahead and placed an order for some machinery which was on its way.
Among other things, the company was requesting one billion meters of electric wires and other items. That amount of cable can wrap Guyana equal 100 times.
At the time of the letter in July 2012, BaiShanLin claimed that it had received advanced financing for the Commodity Mall and wood processing facility with US$14M disbursed by China and another US$100M expected in another six months.
The company wanted Ali to engage them for a new investment agreement.
According to the list of items for tax exemptions, there were seven categories of exemptions BaiShanLin wanted.
These included for motor vehicles, wood processing equipment, shipbuilding equipment, shipping equipment, construction equipment and material, power generation equipment and fuel for generating and production.
Through the Roof
With regard to vehicles, BaiShanLin was vague in some areas. For example, it wanted exemptions 100,000 units of spare parts…there was no description of what kind. The company just happens to have registered a spare parts business in Guyana.
It wanted 20 cars, 20 pickups, 20 “jeeps”, 10 of the 30-seater buses and 50 dump trucks, among other things. In all, there were 235 trucks of varying kinds from low-bed to containers trucks that BaiShanLin wanted the Minister to approve.
Under ship-building, the company wanted 20,000 tons of steel plates; 10 tug-boats, 20 barges, five wharf cranes and four jet boats.
Perhaps the biggest demands that raised eyebrows were under the category, Construction Equipment and Materials.
While the requests for 20 cranes and 100 mixers seemed reasonable, under this category, BaiShanLin asked for tax exemptions for 100,000 tons of steel frame and plant steel and 10,000 tons of aluminium plates.
There were also requests for 100,000 solar street lights, 10,000 security doors, 100,000 meters of high and low voltage cable,
100,000 tubes of sealant and a similar amount of wall fence.
It wanted 100,000 boxes of tiles and 100 welding machines.
That 2012 list also asked for 200,000 gallons per year of diesel for power production along with 20 diesel generator sets and 100 small generators.
It appears that BaiShanLin wanted all the materials to build homes at a 100 acres plot of land it had at Providence, competing unfairly with local companies and to enter the hardware business.
MORE CONCESSIONS IN 2015
In 2015, shortly before the General Elections in May, former Minister of Finance, Dr. Ashni Singh, approved a list for some 87 items for “exclusive” use in the delayed wood processing factory.
These included for 24 generators, 20 more low-bed trucks, some 8,000 tons of cement and almost 800,000 tons of steel. (see photos of complete list approved last year by the former Finance Minister).
The granting of concessions was largely a secret with not much known of the extent until now.
The waiving of taxes has implications on tax revenues for the country.
In 2014, the PPP/C reportedly incurred almost $60B in waived taxes to investors, public servants and others, significant as the total budget of the country was only $220B.
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