May 16, 2017 News
– Claims US$115M transferred without loan agreement was a grant; records show it was a loan
At a press conference he hosted at his Church Street Office yesterday, Opposition Leader Bharrat Jagdeo said that the People’s Progressive Party/Civic (PPP/C) Government did nothing wrong when it transferred US$115 from the PetroCaribe to the Guyana Power and Light. In fact, he said that his government had the prerogative to spend, “all US$600M.”
Jagdeo said that the money was not loaned to GPL, but was given to offset major projects that Guyanese continue to benefit from.
However, the Public Debt Report that Minister of Finance Winston Jordan released last year indicated otherwise. That document stated that GPL was the only state-owned agency that benefitted from an on-lent loan. It stated that the loan was sourced from the PetroCaribe fund. It also noted that as of the end of 2015, GPL repaid less than one percent of that loan.
The content of that document was never before debated by the PPP. And while Jagdeo said that the money given to GPL was reflected in estimates, he took no proof of that to the press conference. However, Jagdeo was well equipped with material to quote verbatim several Kaieteur News (KN) articles that offended him.
“Bold” but “factually untrue” is how he described KN’s article that was published about the loan given to GPL.
He said that KN was incorrect to say that the money in the PetroCaribe fund was to be used for paying rice farmers. However, after a long, and some may want to say drawn out explanation, Jagdeo said that it was the PPP that decided that the “bulk” of the money would “go for the payment of rice.
He began his speech about the matter with, “We have explained many times that PetroCaribe resources has nothing to do with paying rice farmers.”
Jagdeo said that the agreement was a Caricom-wide initiative and countries that do not even have a rice industry, like Jamaica and St. Vincent and the Grenadines were beneficiaries as well. The opposition leader said that the agreement saw countries paying part of the value of the oil and the rest coming to the country as a loan to be used for whatever purpose that country determined best. He even noted that Jamaica used it to fund the budget while other countries used it to fund several initiatives.
Jagdeo said, “In Guyana we decided that the bulk of the resources that we were getting for the oil credit facility would go into a system where we are not going to take the loan but allow those processes to go for the payment of rice.”
He continued, “In exchange, we negotiated a favourable agreement with the Venezuelan government that they will buy rice from us at nearly twice the price of the world market if we do not take the loan for the country.”
Jagdeo said that the agreement was for Venezuela to cancel the promissory note each time there was a shipment of rice.
“It had nothing to do with rice, but in our case we decided to use it in that regard. We made it clear that we spent some of the resources for other purposes for GPL to buy the new power plant at Vreed-en-Hoop and some other power plants.”
Jagdeo again quoted KN’s article that said that there was no formal agreement. While he did not state that there was indeed a formal agreement and where it can be sourced, Jagdeo said that KN lied and that “the estimates for those years showed the transfer”.
He continued, “even if there is no formal agreement, it was to buy the plant. There is no dispute that the money is lost; there is a dispute that we ripped the farmers off.”
Despite Jagdeo’s statement in this regard, Prime Minister Moses Nagamootoo was quoted in several sections of the media saying, at Enmore, that the money was misused.
He had said, “We had billions of dollars in what is called the PetroCaribe Fund and we were never told that the previous government transferred US$115M to the Guyana Power and Light from the rice fund”.
He said that with the news of the bankrupt PetroCaribe fund, his administration is working assiduously to find money to pay rice farmers for their crop. This was mid-2015.
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