Kaieteur News – Guyana does not have a debt crisis. The PPP/C has done a fantastic job at managing the country’s debt, considering what it inherited from the PNC in 1992.
The Guyanese people, however, have to be wary of public debt being used to finance private gains. This is one of the real possibilities if the controversial gas-to-shore project goes ahead.
The danger of that project is the financial model. If public funds are going to be injected into this project to enrich a few friends and cronies of the government, it should be a no-goer.
The government is not likely to go to a public private partnership (PPP) model for this project. This model has proven suspect in the past because it has allowed the PPP/C’s friends and cronies and preferred investors to benefit while trying to entice public support with a promised reduction of 50 percent in electricity tariffs.
The PPP greed machine must not be allowed to get its hands on this project. The dubious model which was used for the Marriott Hotel and the Berbice River Bridge must not be transplanted to this project if it proves viable.
And that viability must not be based on a 50 percent reduction in electricity tariffs. Nothing less than free electricity and cooking gas for all households must result from this project.
Trinidad and Tobago is the most industrialised economy in the English-speaking Caribbean. The twin-island’s electricity needs are provided by a mere eight percent of the natural gas it produces.
Guyana’s natural gas production far exceeds that of Trinidad and Tobago. And therefore, there is no need for any Guyanese to ever again pay for cooking gas (propane) or electricity. So, do not be impressed by this 50 percent reduction in electricity cost. It is a deceptive carrot, which is being dangled to woo support for the proposed gas-to-shore project.
Guyanese must be prepared to take to the streets to demand free electricity and cooking gas for households by 2025. They must also be prepared to protest to ensure that the gas-to-shore project does not become a cash cow for the usual suspects and their friends and cronies. This is why this project must be financed not by the PPP/C’s friends, cronies, syndicated investors or venture capitalists. The funds for this project should come from the average citizen based on a guarantee rate of return. Given the liquidity in the local banking sector, the monies can be raised in this way, if the project proves feasible.
It may not. The reason being is that the cost of alternative energy sources is falling. Just recently, the Head of Guyana’s Energy Agency (GEA) indicated that the country had saved some $488M in electricity tariffs because of the investments [made by the APNU+AFC] in solar power. It was not clear how this sum was calculated – whether it was simply a crude measure of units of electricity generated by solar power, multiplied by the cost of electricity generated by the national grid, or whether this sum factored in the amortised cost of the capital costs of the solar panels and batteries.
Nevertheless, what was most revealing was the massive reduction, which the GEA pointed to in the cost of generating solar power. The GEA head noted that the cost of generating solar power had fallen over the past decade. It currently stands at under US$1 per kilowatt today. This significant reduction makes it all the more necessary for there to be a feasibility study for the gas-to-shore (GTS) project. If the benefit to consumers of the GTS project is a mere 50 percent reduction in electricity costs, it may be more feasible to move towards mini-solar grid systems which would reduce energy costs by far more than 50 percent, given the numbers quoted by the head of the Guyana Energy Agency.
India is offering a line-of-credit to finance the expansion of solar energy. And this may be a better option than simply allowing the PPP/C to handpick investors under a PPP (public private partnership) model for its gas-to-shore project.
Guyanese therefore must keep a close eye on the gas-to-shore project. The PPP/C must not be allowed to create a model for financing this project, which benefits a few of its friends and cronies while saddling the country with public debt which is used to help subsidise the project’s costs.
The PPP/C must not be allowed to impose on the nation another Marriott or Berbice Bridge financial model. Guyanese people should not be fooled by the claim of a 50 percent reduction in the cost of electricity. That is a no-brainer.
(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)
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