The onshore gas project must not become the PPP / C cash cow.
Kaieteur News – The proposed gas-to-shore project must be guided by technical and developmental considerations. He must be prevented from becoming a cash cow for the rich friends of the PPP / C.
The previous administration was slow to move forward with a plan to use the huge amount of natural gas to produce in oil production. The APNU + AFC sat idling for five years and did very little with the result that oil production has begun and there is no plan to use the natural gas produced.
Natural gas is of no value to the oil companies. They have made no offer to buy the gas and will not since then natural gas prices are now falling worldwide. In the United States, natural gas prices have fallen 30 percent since last November due to predictions of a warmer winter.
Europe sees no future in natural gas; there is more interest in hydrogen. The Head of the European Investment Bank was quoted as saying, “To put it mildly, gas is off.” Europe is seeing increased use of natural gas as a temporary source as coal is gradually dissolved and hydrogen introduced.
But the prognosis of Europe and the United States should not be the only factor shaping Guyana’s response to natural gas. Such an essential resource should not be wasted. If torching is allowed to continue, it will shatter Guyana’s reputation as a net carbon sink. Instead of the country becoming a high environmental aviator, it will become a major polluter.
Guyana also needs cheap and affordable energy. High cost and unreliability of energy is a major constraint facing the country’s manufacturing sector. The country cannot improve or grow the manufacturing and business sectors without affordable and reliable energy.
Natural gas has the potential to help solve this problem. But to do that, the natural gas must be converted into a public energy commodity. This would provide support for the establishment of a gas project ashore but not along the lines considered by the PPP / C.
The PPP / C mentality is to use public infrastructure projects as cash cows for preferred investors. The Marriott Hotel and the Berbice River Bridge are great examples of public private partnerships modeled in a way that aims to enrich private investors at the expense of taxpayers.
These projects were floated by taxpayer dollars. And if the projects collapse, the syndicated investors – whose identities are confidential – will have the first lien on the assets. As this newspaper noted many moons ago, the preferred shares would allow these syndicate investors to buy these projects at underlying prices should the financial model collapse as it appears to be doing.
Public private partnerships (PPPs) attract a bad reputation. In October last year a number of civil society organizations (CSOs) wrote to the World Bank and the International Monetary Fund urging a rethink about PPPs, highlighting their negative consequences in developing countries.
But those organizations need look no further than Guyana, where PPPs have become cash cows for friends and cronies of the ruling People’s Progressive Party in threatening public corporations with bankruptcy. National Insurance Scheme funding has been thrown into turmoil as a result of its reckless investment in the Berbice River Bridge. Duty-free, taxpayer-funded concessions have been distributed to these PPPs with no positive taxpayer earnings.
It is in this context that the PPPs should be used to thicken the pockets of preferred investors that the proposed gas-to-shore project should be explored. If this project is to be modeled to provide public benefit, then it must at least be funded by small investors and private citizens and, secondly, it must provide free residential electricity ( to threshold) to all citizens. .
The PPP / C should not be allowed to conceptualize the onshore gas project as another PPP project (public private partnership) for the benefit of its friends and family. This must be vigorously protested. The PPP / C, and especially those involved in modeling the Marriott Hotel and the Berbice River Bridge, must not be allowed to turn this project into a revenue stream for their friends and cronies.
The onshore gas project must be conceptualized in such a way as to serve the public good, just as the World Health Organization requires the coronavirus vaccine. Heavy friends of the PPP / C should not be allowed to milk this project for their own enrichment.
(The views expressed in this article are those of the author and do not necessarily reflect the views of this newspaper.)