The purpose of this analysis is to contribute to the national debate regarding the feasibility of the gas-to-shore project that the Government of Guyana is moving forward to implement. Analysts and other commentators alike have raised many valid concerns and issues regarding the economic and financial viability of the project, including the proposed location as announced by the Government. Within the sphere of the public domain, there are views both in favour of and against the project–though mostly speculative in nature and divorced from Guyana’s development context altogether. In particular, the views against the project surround the notion that the project is not economically feasible, and that includes the proposed location as well – at Wales, on the West Bank of Demerara on the premises of the closed Wales Sugar Estate. It should be mentioned that the proponents of these views have not endeavoured to justify such assertions, neither have they sought to conduct any meaningful analysis in support of their views.
This analysis, therefore, seeks to lend to the national discourse by conducting an analysis on the potential economic and financial soundness of the project, and to determine whether the project in its entirety is economically sensible.
Methodology and limitation
The analysis contained herein draws from secondary data sources that are publicly available. These include press releases regarding some of the technical details on the gas-to-shore project as well as estimates on cost, and the Guyana Power and Light Development and Expansion Project 2012–2016 from which data was derived on demand forecasts for electricity. In addition, other information and empirical literature by reputable organisations that are publicly available were evaluated by the author to create scenarios wherein a number of scenario analyses were conducted – together with some degree of extrapolatory forecasting techniques. More importantly, the analysis conducted takes into consideration Guyana’s historic development context as well as Guyana’s development trajectory within the framework of Guyana’s national development strategy and the Government’s ambitious development plans contained in its five-year manifesto. Thus, the thematic scope of the paper can be described as a contextual financial and economic analysis of the gas-to-shore project.
The limitation of the analysis largely surrounds the absence of specific technical details and information on costing. These details, however, are currently being worked out by the Government of Guyana. In this regard, a gas-to-shore task force was put together that is dealing with the implementation of the project. This includes the negotiations with ExxonMobil, evaluation of feasibility studies and financing models of the project. It is expected that upon the completion of the work of the task force, the details and the relevant official studies will be released to the public at the appropriate time.
In the meanwhile, this analysis is intended to bridge this gap and to inform stakeholders – more importantly the citizenry of Guyana about the broader potential economic benefits of the project. In doing so, despite the limitations described above, there is sufficient information within the public domain and on Guyana’s development outlook for analysts to perform reasonable pragmatic analyses. This in turn, can then serve to answer some of the burning questions within the sphere of the citizenry and all the other interested stakeholders or at least put things into a broader perspective.
Contextualising Guyana’s National Development Strategy of 1996
The current Government, in its previous term in office, had developed a comprehensive National Development Strategy under the Late President Cheddi Jagan since 1994, which was completed and approved in 1996. This strategy was developed by over 200 Guyanese professionals and stakeholders from across all sections of society, including the Private Sector. After its approval and adoption in 1996, the strategy was then implemented incrementally through all the national budgets from 1997 – 2014. An exercise to simply map that strategy with all the national budgets for this period will confirm this fact.
Hereunder mentioned are some examples of major transformational and developmental projects and strategies identified since 1994–1996 through the National Development Strategy framework:
* The construction of two deep water harbours in Berbice and Demerara rivers, the improvement and extension of the Timehri and Ogle Airports, and the rehabilitation of many of the country’s internal airstrips”. Over the years, some of these projects were implemented and some are still ongoing – the Cheddi Jagan International Airport, for example, and the transition of the Ogle Airport to an international airport status.
* The strategy identified the role of Information Technology in the modernisation of Guyana, and today we have the liberalisation of the telecommunications sector and Government’s commitment to digitalise Government services.
* Construction of housing schemes, rural roads, schools and health centres.
* A new four-lane highway connecting Georgetown to the existing Soesdyke/Linden Highway;
* A widened carriageway on the East Bank road between La Penitence and Peters Hall
* A completed highway linking Linden by way of Mabura, Kurupukari, Annai, Good Hope and Lethem, to Brazil across the Takutu.
* Two-lane road from Port Kaituma to Yarakita.
* Construction of a new, high-span bridge across the Demerara River at the same site as the Demerara Harbour Bridge, and the Berbice River Bridge.
* Feasibility study on the re-introduction of railways to be undertaken.
For illustration, the above are just a few examples extracted from the 363-page National Development Strategy developed since 1996. And as can be seen, a number of these projects have been implemented and/or are ongoing. Now that the very Government that actually developed this strategy was re-elected in 2020 to govern, the continued implementation of this development strategy is clearly being pursued.
Evidently, all of the transformational projects that the Government is aggressively moving forward with have been conceptualised since 1996 in this development strategy. As such, it can be said that this strategy is nothing short of visionary and is indeed 50 plus years ahead of its time. This is the basis upon which Guyana’s development trajectory hinges.
To be continued…
About the Author:
JC. Bhagwandin is the Chief Financial Advisor/Analyst of JB Consultancy & Associates, and lecturer at Texila American University. The views expressed are exclusively his own and do not necessarily represent those of this newspaper and the institutions he represents. For comments, send to [email protected].