Feb 07, 2022 News
…gov’t now tables motion seeking Parliamentary approval to cover tracks
By Davina Bagot
One week after presenting its $553 billion Budget for this year and including monies withdrawn “illegally” from the Natural Resource Fund (NRF) or the oil account, the People’s Progressive Party (PPP) government is now scrambling to seek Parliamentary approval to cover itself from possible legal action by civil society members.
On February 1, 2022, after analysts spoke against the illegal manner in which the oil money was deducted from the Natural Resource Fund and incorporated into the Budget, the government quickly submitted a Motion to the National Assembly, seeking approval to include the sums into the National Estimates for this year. The motion, seen by Kaieteur News, was submitted by the Senior Minister in the Office of the President, with responsibility for Finance, Dr. Ashni Singh.
It states, “Be it further resolved: That this National Assembly approves the sum of $126,694,310,000, equivalent to US$607,646,570.98, to be withdrawn from the Natural Resource Fund for the financial year 2022, in accordance with the Natural Resource Fund Act 2021”.
The NRF Act, which was hurriedly passed last December in a matter of less than two weeks, by the government who sidelined calls for a thorough review, outlines that the Parliament must approve withdrawals from the Fund, to be included in the government’s spending. According to Section 16 (1) of the NRF Act of 2021, “The maximum amount that may be withdrawn from the Fund in a fiscal year shall not exceed the total withdrawal from the Fund approved by the National Assembly for that fiscal year in accordance with section 19”.
Section 19 (1) then goes on to say that the Parliament must approve the withdrawal, before it is included in an annual Budget. It states “The amount that the Minister shall request the National Assembly to approve as the withdrawal from the Fund for the next ensuing fiscal year shall be included in the annual budget proposal…”
Meanwhile, Section 19 (2) goes on to say “The amount that National Assembly shall approve as the withdrawal from the Fund for the next ensuing Fiscal year shall be included in the annual budget…”
Weighing in on what he referred to as pilfering of the oil money, Shadow Oil and Gas Minister, David Patterson on Sunday told Kaieteur News that the administration has been living up to its “corrupt” nature since its assumption to office and this recent move is evident that their motives are no longer secret.
He said, “They have issued a revised Motion because they recognise what they are doing is not correct. So in that revised order what they are doing is going to Parliament to okay them using the money until the Board is in place or whatever it is, but they will use the Parliament to cover for what they are going to do now”.
The Member of Parliament (MP) on the Opposition side pointed out that not only has the government breached the section of the law that requires them to seek approval from the National Assembly before making withdrawals from the Fund, but they have also made this move before installing the Board of Directors and Investment Committee, which is tasked with the overall management of the oil account, according to the legislation.
Section 6 (a) of the NRF Act outlines “…the Board of Directors shall be responsible for preparing the Investment Mandate…” In this regard, Patterson stated, “We suspected that they would take out the money without a Board in place. The Board for all intents and purposes is just a rubber stamp because they have already taken money out. They have already allocated it and by the end of Wednesday Parliament is going to approve it”.
Given that a mere 13 days was given to scrutinise the Bill back in December, the Shadow Oil and Gas Minister argued that it is now evident that the ruling Party did not even offer themselves enough time to scrutinise the then proposed law, as they have broken it in their first attempt to be guided by the legislation drafted by them.
The NRF Act of 2019, enacted by the former Caretaker Coalition government was dubbed illegal by the PPP which presented its own draft to the National Assembly on December 16, 2021. The Bill which included “illegal” clauses from the old Law was later passed on December 29, 2021 amid protest action by the Opposition in the National Assembly. Nonetheless, Patterson is now confident that to avoid legal action from civil society organisations, the government has laid a new Motion to “cover their tracks”.
“To preempt anybody going to court to stop them they revised that Motion to say that Parliament approved them doing it,” he speculated.
According to him, the PPP has always been clear on what it wants to do with the Fund, although its “so-called transformational projects” appear to be pulled from the air. “These transformative projects are being pulled out of the air just like that. There is no study, there is no research, no environmental permits. There is nothing at all. They’re just going ahead willy-nilly with it,” Patterson contended.
The former Infrastructure Minister explained that in the case of the New Demerara River Bridge, the PPP abandoned its earlier invitation for bids and awarded the contract instead to a Chinese company.
“If you look at the Demerara Harbour Bridge, they went out for a bid to finance it and so forth. They have abandoned that and they have awarded a contract to a contractor who initially bid to finance the job and build it. So obviously that is why no American or European company could have bid because nobody could have financed it cheaper than the Chinese. If the Americans knew that it could have been financed by the people of Guyana through this Fund, they would have bid but of course there is no plan,” he reasoned.
He was referring to the contract recently awarded by the Ministry of Public Works to Chinese contractor, China State Construction Engineering Corporation. The company won the project estimated at some US$256.6 million under a Design-Build-Finance model, meaning that the company was expected to finance the massive project. Nonetheless, government has allocated the sum of $21.1 billion in the 2022 Budget to cover construction costs of the new bridge, even though it told the nation that the company would have funded the project.
On the other hand, while the government is yet to come clean and tell the nation what specific projects in this year’s budget is being financed by the oil and gas proceeds, Patterson has cautioned that corruption is bound to take place. He warned, “There is going to be a lot of corruption because they are throwing so much money quickly into projects that has not even been designed or looked at in any extent other than somebody talking about it on the television. We know that there is gunna be a lot of areas for wrong doings and corrupt practices but that’s what this government does”.
“We have to stop them or slow them from pilfering the funds but that’s literally what’s happening,” the MP signaled.
Chartered Accounting Firm, Ram and McRae in its observations noted that under Article 13 of the Act itself, it is clearly stated that, “withdrawal from the Fund can only be used for national developmental priorities and essential projects related to natural disaster.” It was further noted that as it is shown in the Estimates, the drawdown this year is purely budgetary support “which we double is permitted under the Act; it would seem that the most appropriate thing to do would be to include in the Estimates, a Separate Natural Resource Fund Statement.”
Additionally, a similar sentiment over the legality and use of the funds in the way in which it is being done in Budget 2022 was raised by former Auditor General, Anand Goolsarran. In his Accountability Watch, he observed too that Section 16 of the Act provides for the Assembly’s approval before any withdrawals are made from the fund.
As such, he contends “this raises the question as to whether the Assembly’s specific approval is not required before the amounts involved are incorporated in the Estimates.” “Or, is it a case where once the Assembly approves the estimates it also approves the related withdrawals?” To this end, it was contended that “…the former should be the case.”
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