Jun 19, 2022 Editorial
Kaieteur News – BOOT (Build, Own, Operate, Transfer) is a Trojan Horse that will trample this country into pieces. This is what Guyanese have already experienced with another project that was praised to the heavens, vigorously pushed upon citizens, and for which they pay dearly. As an overseas-based Guyanese professor warned, “‘BOOT arrangement is a debt trap’…Economist urges Govt. to use oil money to fund capital projects” -KN June 13). This makes for more sense than the BOOT practice that is coming into its own under the PPP/C Government. As will become obvious, we have some serious concerns with this BOOT setup.
Most project concoctions coming from leaders of this PPP/C Government are characterised by what is politely described as clever, with the usual skullduggeries gracing one project after another. The foreign (and local) contractors benefit in numerous ways, while Guyanese leaders and their insiders get their share of the loot. The only ones left hanging are dejected Guyanese, who find out a little too late that they have been taken for yet another costly ride by those that they trusted. The most recent and the most glaring of such disappointments is the BOOT driven Berbice Bridge. It was skillfully packaged as the nicest of transportation presents, only to turn to be an ongoing financial pain below the belt.
This is exactly what Guyanese-born Professor of Economics, Tarron Khemraj, spoke of when he cautioned of the debts that keep piling up on the heads of the Guyanese taxpayers under the BOOT arrangement, as highly touted by the PPP/C Government. Instead, Professor Khemraj counselled that “it might be better to use some of the oil funds to outright finance some of the big capital projects instead of going into let’s say a BOOT arrangement.” We note that the learned Guyanese economist was careful to specify “some of the oil funds” and some of the big capital projects.” It is a wise qualifier that word “some” because, if done cleanly and properly, it safeguards the long-term interests and welfare of Guyanese. It limits the use of oil fund monies from becoming a convenient cheque book for every capital project, and employed for only some of them, plus the “big” ones alone. We think that that is smart advice.
Furthermore, Professor Khemraj mentioned that the BOOT mechanism is nothing but, “de facto debt…because the project contractor has to find the financing, market terms then you get the contract and supplies you the good, but what happens if the private contractor can’t, the revenue is drawn out of the Guyana economy to finance the debt that private contractor’s debt.” This is the BOOT reality that we have already tasted with the Berbice Bridge. Because of what had to be done to keep going with the Berbice Bridge that suddenly transformed into a burden, the leaders of this country need to listen and wise up, as to how a BOOT arrangement can entangle.
Considering the trouble we got into over financing shortfall and things as basic pontoon maintenance to ensure safe operation of the Bridge, hard lessons must be learned and quickly with BOOT arrangements and the exposures they hold. It is a simple one in that it is not always as marketed by Government leaders and their agents and, in the instance of the Berbice Bridge, this was not on the plus side for either Guyana or its debt-burdened citizens. Domestic need for the product or service (utility) traps the country that is a part of BOOT projects, with having to make good whenever there are money shortfalls. Like a marriage that has gone downhill, there has to be coping somehow, no matter how financially painful, how emotionally bankrupting.
It is why we at this publication have warned repeatedly that this country should not be taken down the same BOOT road with the Amaila Falls Hydroelectric Project. What looks shiny can sicken swiftly. Don’t do it! is what we have said time and again, before anyone who would listen. BOOT arrangements benefit contractors and the leaders that hustle to get them in place. BOOT based projects can and do come back to bite deeply and punishingly. BOOT is nothing but a steel-tipped boot in the backs of Guyanese.
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