CH&PA still owes NICIL millions for land transferred in 2019

…as former Govt dipped into Contingency Fund to pay off $2.1B

The Government has inherited a situation where land transferred since 2019 to the Central Housing and Planning Authority (CH&PA) by the National Industrial and Commercial Investments Limited (NICIL) is yet to be paid for, resulting in inter-agency debt.

This revelation was made during a sitting of the National Assembly on Monday to consider financial papers from 2019 and 2020. Included in the consideration of Financial Paper No 2 of 2019 was a $2.176 billion withdrawal from the Contingency Fund under the then Communities Ministry.
In responding to questions about the allocation, Housing Minister Collin Croal revealed that the CH&PA still owed NICIL for land which had been transferred for housing development back in 2019 and the Contingency Fund advance was supposed to be used towards paying off that debt.

“This sum represents a lump sum payment made to NICIL, upon the request by the Minister of Finance then (Winston Jordan) to the then Minister of Communities (Ronald Bulkan),” Minister Croal explained.
“The payment was part of a valuation done for lands that were supposed to be transferred by CH&PA to NICIL. However, even at this point in time many of those lands, the transactions have not been completed and we are still in that phase.”
Moreover, then NICIL/Special Purpose Unit Head Colvin Heath-London had written to then Finance Minister Jordan regarding this debt. Heath-London, who has since been fired, had described the debt as a potential risk to the NICIL-brokered $30 billion syndicated loan it arranged for the Guyana Sugar Corporation (GuySuCo).

“I want to bring to the House’s attention, a letter that was found as part of the records. It’s written by the (then) Minister of Finance. And it says, repayment of syndicated bond. I am in receipt of a letter from (Heath-London), on the subject of reference,” Croal said.
“‘Essentially, Mr London has solicited my intervention in a matter involving CH&PA where NICIL is owed $3.2 billion for lands already transferred. These funds are needed urgently, so that NICIL can meet its November and December payments of $2.176 billion of the syndicated bond that was raised to finance GuySuCo’,” the letter read.
According to Croal, it was pointed out that NICIL has no other source of revenue that could be used to make the payments. Additionally, failure to make the payments would mean defaulting on the bond, which the former Government secured using NICIL assets.
This transaction is one of several that were included in Financial Paper No 2 of 2019, which had a total sum of $4.150 billion that included current estimates of $223.2 million and capital estimates of $3.926 billion. The paper was eventually passed after the Committee of Supply had examined it.
NICIL had announced last year that it sold more than 1000 acres of land to the CH&PA, as part of the lands it divested from GuySuCo in keeping with the former A Partnership for National Unity/Alliance For Change’s controversial policy of downsizing the sugar company.
Back in 2018, NICIL, through Republic Bank, went out on a limb to arrange a $30 billion syndicated bond at a rate of 4.75 per cent interest and a five-year repayment period for GuySuCo.
According to the agreement between NICIL and Hand-in-Hand Trust Corporation as the trustee, the first tranche payment of $16.5 billion from the bond was to be used for a long-term project and capital financing for GuySuCo.
Specifically, the money was to be used to acquire two co-generation plants, upgrade the existing factories to produce plantation white sugar, build storage and packing facilities, and help pay for two years of general operational costs.
However, a significant part of the bond was never used for the purposes it was secured. The previous APNU/AFC Government itself had admitted that between July 2018 to February 2020, $9.7 billion was disbursed from the bond to GuySuCo to fund its operational expenditure – much of which was outside the terms of the bond.