Guyana hogtied by Dr Bharrat Jagdeo’s ‘secret deals’
JANUARY 20, 2012 | BY KNEWS | FILED UNDER NEWS
…backing out will incur ‘onerous penalties’-Dr Luncheon
There is a convention that prevents incumbent governments from entering into new contracts, signing new agreements and undertaking new projects in the weeks leading to elections.
However, former President Bharrat Jagdeo signed some multi-million-dollar contracts and committed the new government to the binding contracts.
Executive President Donald Ramotar, his administration and by extension the country are now bound to the contractual obligations that have been negotiated and signed into effect by Bharrat Jagdeo.
This was confirmed by Head of the Presidential Secretariat, Dr Roger Luncheon, who conceded that the government cannot cancel these contracts and agreements causing the country to incur onerous penalties.
Some of the ‘secret deals’ signed onto by Jagdeo just weeks and days before the elections include the US$52M Marriott Hotel project, the US$140M extension of the Cheddi Jagan International Airport and the US$835M Amaila Falls Hydro Electric Plant.
There was also the US$40M communication cable from Brazil that is being installed with Chinese labour.
Dr Luncheon, who was at the time being questioned about the international contractual obligations that Jagdeo has committed Guyana to.
First pressed on the exit clauses embedded in the agreement with Sithe Global for the Hydro Project, Dr Luncheon said that he preferred to defer the questions to Winston Brassington of the National Industrial and Commercial Investments Limited.
Dr Luncheon suggested that Brassington would be the better person to answer the queries given that he is much more “current than I am and his comprehensive grasp of the issues surrounding the main activity (the building of the hydropower facility) far exceeds mine.”
The Cabinet Secretary told the media that in each of the instances where agreements have been inked there is embodied in those agreements commitment and obligations by both parties.
He said that while there is absolutely nothing that prevents the agreements from being rescinded it is not simply a case of one party “just backing out.”
Dr Luncheon explained that in most cases there is a process with conditions under which this would be done.
He pointed to an example in the Hydropower agreement where there is a “force majeure” and a number arrangements that cater for unforeseen and unlikely events but warned that these are things that “the lawyers address in the body of the agreement to say that in these instances, were the agreement to lapse here is to say that who is at fault and here are how they are to be dealt with.”
“Force majeure” is a common clause in contracts. It essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, or an event described by the legal term act of God (such as hurricane, flooding, earthquake, volcanic eruption, etc.), prevents one or both parties from fulfilling their obligations under the contract.
When pressed to simplify whether the Government can back away from the projects Dr Luncheon said that “it cannot be done without cause…it cannot be just, I feel like backing out…these things carry onerous penalties.”
Dr Luncheon illustrated his point by drawing reference to neighbouring Trinidad and Tobago where the Patrick Manning administration had committed that administration to have “built and even supply considerable security hardware…They had committed to spending enormous sums of money.”
He said that when the new administration took office the Kamla Prasad administration pulled the plug on the project, “at tremendous cost to the taxpayers of Trinidad.”