GGMC loans Central Housing $3 Billion for housing project

Just two days after workers ended an almost one month strike for increased wages and salaries, The Guyana Geology and Mines Commission late Thursday announced that it was investing $3 Billion as a loan to the Central Housing and Planning Authority for the development of the Housing Sector.

The announcement came just hours after a local blog reported the deal. According to a joint statement, the loan will run for a one year period.

“The Board of Directors of the Commission met and deliberated on the proposal submitted and it was noted that the interest rate being offered by CH&PA was 5% which was 3.2% more than what was currently being earned via the commercial banks and other investment options open to the Commission”, the release stated.

The statement also said that the loan will see interest calculated using the reducing balance and in the event of CH&PA failing to repay the entire amount by the deadline, the Commission has the right to increase the interest rate to 7%.

The statement said that at the level of the Board of Directors, it was agreed that the investment proposal was financially prudent and sound.

The GGMC stated that its Board agreed to the granting of the loan subject to the terms and conditions enshrined in the Loan Agreement and any additional guarantees required by the Commission.

The Central Housing and Planning Authority noted that the project is pivotal to “the realization of the Government of Guyana strategic target of allocating 30,000 lots under the Adequate and Affordable Housing Programme in order to maintain momentum in the provision of service land in several areas on the East and West Demerara.”

The “GT Mosquito” blog reported that Chartered Accountant Christopher Ram has deemed the transaction illegal.

According to that report, Ram explained that Section 10 of the Guyana Geology and Mines Commission Act of 1979, states that the Commission may, out of its funds and resources make loans in accordance with the provisions of this Act in that behalf but only in in the performance of its functions.

Last year, Former Auditor General Anand Goolsarran had objected to the transfer of hundreds of millions of dollars over the years from the Guyana Geology and Mines Commission to the National Industrial and Commercial Investment Limited (NICIL) to repair roads in the interior.

Goolsarran said it was inappropriate for funds to be transferred to NICIL to build a road on behalf of the Commission, since NICIL was not the competent government agency for the construction of such roads.

The housing sector is tasked with building some roads across the country but the loan agreement did not specify its purposes. However, if this was the purpose then there shouldn’t be need for a loan and the monies should have been transferred similarly.

Government at the time had defended the move saying that the roads, critical for operations of mining and forestry activities, had to be repaired and maintained.

Filed: 30th January, 2015