Concessions are one of the means countries like Guyana can attract foreign investors. And there have been many in the past years. These concessions are generally granted after the investors discuss with the authorities, the things they are bringing into the economy. Agreements are signed and the concessions are sought.
But there are contradictions. I would expect the local investors to be granted concessions, perhaps even better concessions, because they are home and spending their own money to aid in national development.
The result is that they go about taking their chances and hoping to reap the rewards for their efforts.
There have been large investments in Guyana, some large enough to match foreign investors. There was the Pegasus hotel purchase by entrepreneur Robert Badal. The hotel was up for sale and there were some interested people, many of them very friendly with the government.
Badal faced many obstacles in the dying stages of the agreement to secure the hotel, but in the end he prevailed. It was not surprising, though, that he did not get some of the concessions that are available to people in the hotel industry.
Soon after Badal purchased the Pegasus, the government announced that it was constructing a top class hotel. The site was next door to the Pegasus. It goes without saying that there were concessions galore. Badal cried foul, but there was nothing that he could do.
There were other foreign investors, the most prominent of which was BaiShanLin. I had a chance to see the list of concessions that this company sought from the government and it boggled the mind. There were requests for many vehicles; enough paint to cover all of Guyana, steel to build ten stadia and the list goes on.
President Donald Ramotar would later say that he never granted those concessions, but the company had secured a lot earlier. One of the things promised was a sawmill at the logging site. This was not a reality.
Meanwhile, the prying eyes of the media community found that BaiShanLin had indulged in a lot of irregularities, each robbing the treasury.
There were the gold mining companies from Canada and Australia. These too enjoyed massive concessions to the point that the local gold miners complained. They felt that they should get the same. Indeed they got fuel concessions. They were also allowed to keep some of the foreign currency they earned from their sales.
Now we have another case of a foreign investor against a local investor. Roy Beepat dived deep to construct Giftland Mall. It was a massive investment to construct the largest mall in Guyana. It offered a movie centre, shopping centres and food courts.
Needless to say, the cost of electricity was astronomical, so high that Beepat found that self-generation was the way to go.
Then came another entertainment centre—MovieTowne. This entity is being financed by a Trinidad-based Guyanese, Derek Chin. When the project was launched at Georgetown Club, the stated objective was very promising.
The claim was that MovieTowne Guyana is set to transform the lives of the people of Guyana like it has done for Trinidad and Tobago, where it has emerged as the number one destination for family recreation, movie-going, shopping and dining for people of all ages, all ethnicities and all income brackets. It will also provide more than 700 local jobs and provide affordable, all-encompassing entertainment for Guyanese citizens.
It promised to be a mega project for Guyana’s development and construction is already underway and the project is expected to be completed in 2016.
It was only recently that I learnt that MovieTowne had promised to generate enough electricity to power the University of Guyana next door.
The reality is that MovieTowne is not yet finished. There has also been no promised electricity to the University. Instead, Chin is complaining that he cannot get power from Guyana Power and Light. He has also said that he has encountered a lot of red tape in acquiring concessions.
Immediately Giftland has asked that the concessions for MovieTowne be made public. Giftland and MovieTowne are both in the same business, so they should enjoy the same incentives. Beepat knows what he is spending. He also knows that he is getting no concession for electricity.
Government had granted the Giftland complex concessions for air-conditioning units as well as ‘materials and equipment” associated with the setting up of the cinemas, those concessions did not extend to “building materials , plumbing, steel frames , equipment or anything else whatsoever.
MovieTowne claims that it has items that attracted concessions on the wharf, but these have been stalled. The investment is placed at US$45 million; big enough to attract concessions, but Beepat knows that this new entity is a direct challenge to his Giftland. They will both offer the same fare and will therefore vie for the same clientele.
A few weeks ago there was a call for the concessions granted to foreign companies to be made public and The Ministry of Finance voiced its approval for such a move. Indeed, the wider society would see what it is giving up in revenue.
I hold the view that a local company should be given more of the concessions, because the revenue earned stays here and helps to develop the country. At the same time the local company would be enhancing the labour market.
I am no economist, so my conclusion may be out of place, yet I cannot help but conclude that at the end of the day the local company would be here.
Jul 15, 2018It was a repeat of last year’s CASA tournament held in Guyana when Barbados ended Guyana’s 12-year dominance of Caribbean Junior Squash. The Guyanese had to settle for the runner-up spot as...
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