What began almost a quarter of a century ago as a judicial adventure has now run its full course, ending before the Caribbean Court of Justice, the region’s highest court.
The proceedings arose out of a Request for Proposals issued in November 1999 in my capacity as Receiver-Manager of Hotel Tower Limited. CARA submitted what it described as an expression of interest, expressly conditional upon due diligence and other matters. Before the process could run its course, CARA commenced proceedings claiming that I breached contractual and collateral obligations and sought to stall the process.
Those claims were soundly rejected at every level of the court system. The High Court dismissed them. And the Court of Appeal affirmed that decision. But CARA and its counsel persisted. And now, in an erudite, unanimous and thoroughly reasoned judgment, the Caribbean Court of Justice has brought the matter to an end.
In its judgment, the Court clarified and restated the law in Guyana on tendering and contractual formation. It recognised the concept of a process contract – now applicable to both public and private tendering – while making it clear that such a contract does not arise automatically. The decision requires a careful review of how tender processes are structured and communicated. It also provides timely and authoritative guidance on the need for clarity in tender documents, strict compliance by bidders, and discipline in the conduct of the process.
That CARA chose to pursue this litigation was not without consequence – and benefits. The Court used the opportunity to develop the law and, in doing so, offered clear reminders about the proper limits of litigation. The duty of legal counsel is not only to advance their clients’ cases but to advise against claims that are speculative, premature, or lacking in legal foundation. When that duty is not observed, the consequences are inevitable – as CARA has now learned to its cost.
In my respectful view, this case lacked merit from the outset and ought not to have been pursued. It has, however, served a useful purpose. The law has now advanced, and our practices and procedures must follow in lockstep. The guidance is clear. The integrity of the tendering process in Guyana – and accountability in contract awards – will be stronger for it.
There is something profoundly troubling – indeed heartbreaking – about watching the National Insurance Scheme report what appears to be a dramatic financial turnaround while, at the same time, the attitude of both the Government and the Scheme towards pensioners appears to be hardening. For years the NIS was regarded as financially fragile. Successive actuarial reviews warned about deficits and long-term sustainability. The national conversation about the Scheme was dominated by concern about whether it could meet its obligations in the future. Today that picture is beginning to change. Employment has expanded, contributions have increased, and the structure of the economy itself has altered significantly. The emergence of the oil and gas sector has introduced into the system a group of relatively young, highly paid contributors, many of whom earn well above the insurable earnings ceiling. Many of these workers may spend only limited periods in insurable employment in Guyana before moving elsewhere in the international labour market. They are replaced by equally highly paid workers. It is the kind of situation of which most fund managers can only dream. From the perspective of the Scheme’s finances, this is a financial windfall from above. Contributions increase while both short and long-term benefit obligations associated with many of those contributors will never materialise. The results are already visible. The Scheme has begun reporting improved financial outcomes, including a return to surpluses after years of concern about deficits. Losses of hundreds of millions are now converted into billions in annual surpluses. Yet, as the financial fortunes of the Scheme improve, the treatment of pensioners appears to be moving in the opposite direction. Whether it is inertia or bad will actual and potential pensioners lose out. The Government adjusts the minimum pension only reluctantly and belatedly. The first full year of oil production saw the minimum pension increased from $32,100 to $35,000 per month. It remained there for four years after which it moved to $43,075 per month. Meanwhile, cost of living moved up, and up and up. The harshness directed at the thousands were tragically directed at those who sought to stand up for their rights. Here are three cases of which I am painfully aware. The first concerns the carpenter whose employer deducted National Insurance contributions from his wages but failed to remit them fully to the Scheme. When he applied for his pension, the claim was refused. He successfully challenged the decision and took the matter to court, but his victory proved short lived. One might reasonably have expected the matter to end there. It was the only time ever that the NIS appealed such a decision. The word is that the Government compelled the NIS to appeal the case and to ask that the decision be stayed. No money for Borther Zainul. He is still waiting, even as his health deteriorates. The Government’s excuse: that allowing the claim might create a precedent and “open the floodgates.” The second case reflects a different but equally painful reality. A pensioner who believed that she had satisfied the statutory requirement of 750 contributions was informed that she was short by four contributions. Four contributions out of seven hundred and fifty. After months of struggle, she eventually instructed that the case be withdrawn. In explaining her decision, she wrote that she was not withdrawing the claim because she believed she was wrong. She was doing so because the process had exhausted her. The delays, the resistance and the strain of the struggle had taken a serious toll on her health and peace of mind. At her stage of life, she simply no longer had the strength to continue fighting the system. The third case may be the most tragic of all. An appeal concerning pension entitlement was filed in 2010. It was not heard until 2023 – Thirteen years later. The delay was not attributable to the claimant. When the Appeal Tribunal eventually ruled in his favour, one might have expected the long ordeal finally to end. Instead, the implementation of the decision itself has been delayed. Today the claimant still waits for the benefits which the Tribunal determined he is entitled to receive. In the meantime, he has been diagnosed with cancer. He is in his late eighties. Now he wonders if his surviving nephew who cares for him will be able to continue his claim! These are not merely administrative cases. They are human stories. Three pensioners. One who won in court but still cannot obtain his pension. One who abandoned her claim because the struggle became unbearable. And the last one who waited thirteen years for justice and now waits again while battling a life-threatening illness. These cases raise an uncomfortable truth. It is easier in this country to obtain a tax refund than to prevail against the callous National Insurance Scheme administration. But the Government is no better – and probably worse. My messages and email to President Ali are ignored. That it seems is because they care. The National Insurance Scheme was created as a social insurance institution. Its purpose was to provide security in old age to workers who had contributed during their productive years. It was never intended to become an adversarial institution engaged in prolonged struggles with pensioners. These examples are about cruelty and callousness. In a country newly enriched by oil, it is especially difficult to justify.
Other than periodic, campaign-style announcements, the Silica City project on the Soesdyke-Linden Highway operates in near-complete secrecy. It is repeatedly celebrated as the President’s “brainchild”, yet the public has been told nothing of how it is financed, how it is structured within government, or by what criteria the beneficiaries of its house lots will be selected. That pattern was maintained most recently as last week, when Collin Croal, Minister of Housing, announced that agreements have been signed and allocations of houses made, without accompanying disclosure of any legal authority, eligibility rules, pricing framework, or institutional approvals governing those allocations.
This silence is not accidental. Silica City has been variously described as a housing scheme, a “young professionals” enclave, a smart city, a decongestion strategy, and a commercial and healthcare hub. The descriptions shift with the audience – and with each statement. That is contrived confusion to avoid the project being pinned down to a single statutory regime, a single governance framework, or a single line of accountability. When a project is so flaky, when it begins to appear like a recycled scheme, it is time to raise the alarm.
We have seen this movie before. The Sparendaam housing project – Pradoville 2 – did not unravel by accident. The investigation showed that it was financed through multiple state entities, with no single institution carrying the full cost and no consolidated accounting of the project. That fragmentation diluted responsibility, obscured the true cost, and prevented scrutiny until long after land was transferred and beneficiaries entrenched. By the time the full picture emerged, accountability was already lost – and no one was ever held responsible.
The forensic investigation later showed how the absence of clear statutory footing, the bypassing of institutional processes, undisclosed allocation criteria, missing records, and political direction substituting for law produced outcomes that benefited a select few, including the then President, Ministers, party figures, and carefully chosen beneficiaries.
The project
Little has been said about Silica City’s administration, except that it appears to fall under the Central Housing and Planning Authority, established under the Housing Act, more noted for its outdatedness (1946) than for its relevance. The CHPA is a statutory authority governed by the Housing Act, with defined objectives – Housing of persons of the Working Class – procedures, reporting obligations, and safeguards designed to prevent the kind of opacity and looseness exposed by the Sparendaam investigation.
Yet, an enduring and necessary safeguard provided for under the Act has been dispensed with – too inconvenient for Silica City. Annual Reports have disappeared. There is no identifiable public accounting for the project. The project does not appear in the National Estimates, nor is it identifiable in the financial statements of the CHPA or any other government authority. This is despite the vast sums being spent on infrastructure and construction.
The chain of command compounds the danger. The Minister administering CHPA reports directly to Mohamed Irfaan Ali. There has been some reshuffling of junior ministers, but a party loyalist remains in charge. From all accounts, the administrative structure and key personnel unchanged. The result: a flagship housing project executed by CHPA under direct political oversight, with diminished reporting and no transparent disclosure of financing, governance, or allocation criteria. All in an environment of an explosion of funds accompanied by an erosion of accountability.
Loosening the reins of accountability
Since the PPP/C returned to office in 2020, CHPA has abandoned the comprehensive Annual Reports required by section 49 of the Housing Act, substituting bare audited financial statements that say nothing about projects, allocations, beneficiaries, or policy decisions. The stage was set: no meaningful statutory reporting. As a result, Silica City is rendered financially invisible to citizens and Parliament alike. This violation of the law shields the project from scrutiny while land is allocated, infrastructure constructed, and commitments locked in.
That this has gone undetected and unchallenged is itself a serious institutional failure. The Audit Office of Guyana exists to ensure compliance not only with accounting standards, but with the laws governing public authorities. The absence of Annual Reports, and the complete invisibility of Silica City in CHPA’s published accounts, should have been explicitly flagged.
Equally troubling is the silence of the National Assembly of Guyana, at least some of whose members know that the Housing Act requires far more than numbers stripped of context. When a statutory reporting framework collapses in plain sight, unnoticed by auditors and unchallenged by Parliament, accountability disappears, and lawful administration collapses.
President Ali
At this point, it is no longer credible to discuss Silica City without addressing the common role of President Ali himself. The Sparendaam investigation did not describe a single rogue decision or a momentary lapse. It documented an infrastructure of persons and practices through which housing projects were executed: political direction overriding statute, institutions reduced to conduits, records absent or reconstructed after the fact, and accountability dissolved by design.
What makes the current project more troubling is that many of the same enabling conditions have re-emerged on a far larger and more expensive scale. Then, Dr Ali operated as Housing Minister under a President. Now, he is the President. Then he reported to Cabinet. Now, Cabinet reports to him.
Silica City is framed as a legacy project. But vanity cannot come before legality, and legacy cannot be built on secrecy, evasion, and disregard for statutory accountability. History is unforgiving on this point. It judges leaders not by the size of their projects, but by whether those projects followed the law, the institutions of the state, and earned the public trust.
Conclusion
Having been involved in the investigation into the Sparendaam project, I recognise the warning signs. I fear that if this project is allowed to continue under existing conditions of opacity, avoidance of scrutiny, and deliberate invisibility, we will not later be wondering whether Silica City was Pradoville 3.
Amid calls from the Opposition and other stakeholders for an extension in the time for scrutiny of the new model Production Sharing Agreement released by government recently, Chartered Accountant, Christopher Ram said there should be a public forum for broad and general consultations.
Writing in his weekly Oil and Gas column in the Stabroek News last Friday, Ram mocked the new agreement which he said retains the old foreign exchange framework. “So much for a progressive, nationalistic model promised by the Government. While I intend to address the Model over the coming weeks, I urge the Government not only to extend the 14-day consultation period but to engage the public in a public forum for broad, general consultations. The draft does have some positive features but repeats some of the major weaknesses of the existing regime,” Ram said.
Meanwhile, only last week this newspaper reported that the Government of Guyana (GoG) has so far ignored the calls from both civil society and the Opposition for the review period on the new draft Production Sharing Agreements (PSA) to be extended. Two drafts, for the deep and shallow water areas, were released two Tuesdays ago marking the commencement of a 14-day consultation. Several members of the public had recommended that the consultation period be extended to cater for a thorough review of the agreements.
This newspaper had reached out to Minister of Natural Resources, Vickram Bharrat on Friday for his position on the calls being made, but received no response. However, Stakeholder Coordinator for the Ministry, Ms. Mikaila Prince had explained, “no change to the timeline has been communicated.” The Opposition at its weekly press conference last week said the contracts should be laid in the National Assembly and be put before a special select committee that allows for the involvement of the Guyanese citizenry in the national conversation. Similarly, environment and democracy advocate, Simone Mangal-Joly in a letter to Natural Resources Minister, Vickram Bharrat underlined the need for an extension to the consultation period.
She said, “Unlike government officials, citizens are not paid employees of the State and can only read such documents during their after-work hours. Fourteen days is also prohibitive when it comes to procuring qualified specialists to provide advice so that citizens and civil society organisations can make informed representation to government.”
Mangal-Joly had also suggested among other things that mechanisms be put in place for all comments on the new draft agreements be made public and for government to produce a plan to report on how public feedback was addressed in the development of the final model agreement. Alfred Bhulai had also made a similar request to the administration. The agreements that will govern the 14 oil blocks presently on auction, has significantly improved terms for the country. In the new oil contract, government has preserved the right to review and approve the budgets for the exploration and development programmes of the oil companies. Such powers are not enshrined in the Stabroek Block PSA or any other existing PSA.
Equally important is the insertion of a new provision that ensures the country is not left on the hook for any of the oil companies’ bills. A new arrangement or demand rather, is that oil companies must also ensure their subcontractors have adequate insurance coverage too. Importantly, the draft agreements state that oil companies will not be allowed to acquire the blocks and sit on their hands for decades. Unlike what obtains in the Stabroek Block PSA, the new draft agreements stipulate that the “contractor, affiliated companies, sub-contractors and individuals who are expatriates shall be subject to the income tax laws of Guyana, including, the Income Tax Act of Guyana (Cap. 81:01) and the Corporation Tax Act of Guyana (Cap. 81:03) and shall separately comply with the requirements of those laws, in particular with respect to filing returns, assessment of tax, and keeping and showing of books and records.” The new PSA has proposed that cost recovery be capped at 65 percent and introduces an increased royalty of 10 percent. In announcing the release of the new model contracts, the Natural Resources Ministry explained that to ensure new investments are governed by a comprehensive framework of international best practices, there will be an overhaul of the 1986 Petroleum Act and Regulations.
Chartered Accountant, Christopher Ram has reiterated his position that the current foreign currency shortage is a fallout from the 2016 Production Sharing Agreement for the Stabroek Block and he said Guyanese should note that the much vaunted Model PSA has essentially retained the old foreign exchange framework, which is the source of the problem.
Writing in his weekly article which appeared in the Stabroek News on Friday last, Ram observed that in Guyana’s fast changing news cycle, the issue of whether or not there is a shortage of foreign currency appears to have receded into the background. That of course, he said does not mean that the temporary problem has been permanently solved. “Official sources maintain the line that there was never a general shortage, that if anything, the problem was restricted to a few of the commercial banks. The rest have their foreign exchange niches – Scotia from petroleum, Demerara Bank from DDL and Agriculture, and GBTI from Agriculture and Gold. That’s from the supply side. The shortage, if any, comes from several factors on the demand side, including what is perceived in some quarters as Guyana becoming the Cambio and main source of foreign currency for our Caribbean partners, to borrow from a claim made by Ms. Kamla Persad-Bissessar as Prime Minister of Trinidad and Tobago in respect of her own country,” Ram, wrote.
He said the paradox of any shortage in the midst of a petroleum boom is partly explained by the liberal Foreign Exchange Control provisions of the 2016 Petroleum Agreement which allows the oil companies to run their own exchange regime, outside of the national framework. “And here it is worth noting that the regime is enjoyed not only by Exxon’s indirect subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) but also by Hess and CNOOC which have a 55% share in the oil consortium with Esso the remaining 45%,” Ram stated.
He said apart from being the Operator of the Stabroek Block, EEGPL appears to have taken on the role of representative and spokesperson for the other two. He noted that EEGPL is a member of the Private Sector Commission and was represented at the meeting between the PSC and the Bank of Guyana. EEPGL’s representative however, Ram said made no admission, suggestion or undertaking to contributing to any solution. “Indeed, the representative was totally silent, taking in all that was said, no doubt relaying the discussions to his principals. We need to remind ourselves that EEPGL holds a minority interest (45%) in the Stabroek Block with Hess owning 30% and CNOOC the remaining 25%,” the chartered accountant said.
Ram said that, Guyanese must not make the mistake “that it is all down to the oil companies, that the Agreement is the sole cause of the problem or that any fixing of the Agreement would solve all the problems. Rather, if the Model PSA is a signal, it is safe to assume that the Government does not intend to address the issue of foreign exchange – surplus or shortage – but to leave it to the Bank of Guyana and the so-called market. Perhaps the Government has to be reminded that the Bank of Guyana is a statutory creation, bound to act within the policies set by the Government. The central bank does not make policy but only carries out policies set by the Government. Since neither the Governor of the Bank nor the Government has indicated any change in policy on foreign exchange in response to oil, one has to assume that the Government is comfortable with the status quo.”
He said such continued inaction on the part of the Government has grave consequences. “It has become the victim of the Cambios, the tax evaders, the money launderers and the illegal export of the country’s foreign exchange resources, transfer (under)pricing and the faithful adherence to the foreign exchange rules, already limited as they are.”
Take action
Mr. Ram said Government has to get around to managing the economy and to addressing the problems with the economy and the country. He said unless it acts soon, the condition can potentially become totally unmanageable and insoluble. “Maybe the Government fears that necessary action will not be welcome by their friends and supporters but it must surely realise that it has to act in the best interest of the country rather than in the Party’s electoral interest,” Ram stated.
Offering solutions to some of the problems related to foreign currency issue, Ram called for the repeal of the Dealers in Foreign Currency (Licensing) Act by excluding the non-bank cambios which are almost universally personal cambios, impervious to audit or adequate supervision and regulation. These were created for a different era and purpose and have no place in this society. He also called the Issuing of more banking licences, thereby increasing competition among the banks. Ram said too that there is need for strengthening and enforcing the only semblance of transfer pricing rules under the Income Tax Act. “Rigorous enforcement of the laws against those communities of foreigners – regional and international – that rob the revenue of taxes, underpay our workers and take out foreign currency under all forms of guises. We must not hesitate to place the law breakers before the Courts and to apply our extradition laws in appropriate cases. Addressing the large scale smuggling across the extractive sector and not hesitating to make it possible to revoke leases and licences,” he added.
He also called on government to dealing with the gaping weaknesses in the Local Content Act, the review and amendment of the Bank of Guyana Act, and the Immigration Act, strengthen and depoliticise the Financial Intelligence Unit and SOCU, and ensure that foreign investment means what it says. “After all, if the local economy finances the investment, directly or indirectly, allowing the investor to repatriate both capital and profits, the gains to the economy are significantly reduced. Liberalising the rules for foreign borrowings but subject to thin capitalisation rules,” Ram concluded.
