Why bidders from only one place?

Aug 11, 2023 Editorial

Kaieteur News – The Chinese already have a huge presence in Guyana. The latest news in the media is there are only Chinese bidders for a US$100 million East Bank Demerara Road project. Another news item is that President Ali hopes that Chinese companies bid for oil blocks when the auction begins. The Chinese are already involved in building bridges, engaged in that cash cow operating under the name of the airport expansion project, as well as mining, oil production, and a new river bridge that is on the move.

Looking at all this, clearly Chinese companies have struck it rich in Guyana with fingers in many sectors of this country’s economy, and we say good for them. But we are concerned as to how much good is coming to Guyana from this massive Chinese involvement here. We look at this sprawling presence, and ask if this dependency, with more of it coming, is a good thing for Guyana. A reasonable thought is that Guyana would be better served by diversifying the foreign presences operating here, rather than be linked so tightly with companies from a single country.

What surprises is that on a US$100 million-dollar project, there are only bidders from China! It is strange that companies from India, North America, and Europe are not competing for road construction business in Guyana. This does not send a good message, when there are these absentees, with the field left open for bidders from one place only. The Chinese must be the cheapest in the business, but given Guyana’s experience with the Cheddi Jagan Airport Expansion Project, any such claim clashes with reality, and loses. Another pressing idea is that companies from the countries we named before are expected to look on a presence in Guyana, for any project, as a foot inside the door to the plentiful downstream oil and gas (and other) business opportunities that could be had. Just being here allows for all-important arm’s length and face time engagements, which are worth their weight in gold, and increases the chances for possible participation in moneymaking ventures. Something is not making sense here, unless there is a hidden cost of doing business in Guyana that makes interest in being here not worth the time and effort.

To add to the string of surprises was the media report that Guyana’s President Ali is hoping that Chinese companies be part of the bidding for the oil blocks coming up for auction in a few months. A Chinese firm, CNOOC, is part of the Exxon-led consortium in Guyana’s offshore oilfields, and many Guyanese do not look too kindly at that group. For whenever the name ExxonMobil comes up for discussion among the poorer class of Guyanese, the result is a combination of anger, bitterness, and disgust. Considering the bad (very bad) experience of Guyanese with the ExxonMobil orchestrated oil contract, any company that is closely affiliated with it, suffers from quick dismissal for not being about Guyanese interests and benefits.

Because the 2016 oil contract is seen as a vile construction, and a Chinese company benefits handsomely from it, President Ali ought to be hesitant about being hopeful, or inviting, other Chinese companies to bid for our oil blocks. We think that it is better that Guyana encourages other foreign partners. Several local commentators have pointed to India, and have been calling for a closer relationship with it. We see such a relationship, as it pertains to oil blocks, as having a better potential return for us.

To be frank, it does not matter where companies come from, India, China, or America, their first priority is always the same. That is, how to maximize their profits. Maximizing profits for them means minimizing returns for us. The key is to ascertain which company is the better fit for our needs, and which one offers a better overall package. The country-company relationship must reflect what is a better balance, and indicates a two-way street from which both parties feel good about the deal signed.

Guyanese concerns over the airport and mining, naming only two areas, must warn. It is better to deal with others for projects in the pipeline to reduce concerns that surround Chinese operations locally.

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bidders, Chinese, economy, Editorial, President Ali

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Why bidders from only one place?

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