Home Letters Critique of Nigel Hughes’s claims of discrimination in Govt contracts (Pt 1)
Nigel Hughes recently presented a so-called study on the award of Government contracts, among other issues on an Opposition-controlled podcast. The modus operandi of that presentation by Hughes was intended to lend credence to a certain popular Opposition-manufactured narrative (not premised on facts) wherein he sought to demonstrate racial discrimination and/or marginalisation of Afro-Guyanese.
Suffice it to state that I would like to illustrate some of the obvious flaws which would render the findings of the study grossly weak and inconsistent, mischievous, and politically motivated.
In this regard, Hughes highlighted some of the largest contracts awarded by various Ministries, to show that no major contracts were awarded to any Afro-Guyanese company. The inherent weakness with the methodology Hughes used to derive his findings, though, is such that he only presented the companies and ethnicities of the principal owners that were awarded the contracts. In order to do a proper analysis to carry out such an exercise, the researcher would first have to ascertain how many companies tendered for the contract(s), and then categorise them by ethnicity of the principal owners. This was not done in Hughes’s study.
The information in relation to the award of contracts and all the companies that tendered is publicly available on the National Procurement and Tender Administration Board’s (NPTAB) website. In fact, the entire process: from the opening of the tender box, publishing of the minutes etc., is done in a publicly transparent manner.
Hereunder mentioned are some examples of the contracts Hughes highlighted in his presentation.
Guyana Water Inc. (GWI): GWI awarded eight contracts to the tune of $6 billion, all of which the principal owners of the companies are Indo-Guyanese. Eight of the same set of contractors tendered for these eight contracts, and some companies tendered for multiple contracts.
Six of the eight companies that bid for these eight contracts were awarded the contracts, and one company was awarded three contracts. Two of the eight companies that tendered were not awarded any contract. Of note, all eight companies that participated in this process appeared to be owned by Indo-Guyanese. It therefore means that none of the companies that tendered for these contracts are owned by Afro-Guyanese, bearing in mind that the tendering process is a competitive and publicly transparent process.
The Eccles-to-Great Diamond Bypass Road Contract: Hughes highlighted three companies that were awarded the contracts for Lots 1, 2 and 3 of the project, which went to one Indo-Guyanese company, one Chinese company and one Afro-Guyanese company, though the contracts awarded were for Lots 1 – 12 for the project. A total of thirty-four contractors tendered for all of the contracts from Lots 1 – 12. Two out of the thirty-four companies that tendered for these contracts appeared to be owned by Afro-Guyanese, and it was also confirmed that these two Afro-Guyanese-owned companies have been awarded various contracts under the incumbent Government.
It goes without saying, therefore, that if there was no company owned by Afro-Guyanese that tendered for these contracts – in the case of GWI, for example – one cannot conclude that no contract was awarded to Afro-Guyanese companies when the record shows that there was none that tendered.
Similarly, in the case of the Eccles-to-Great Diamond Road Bypass Contract, where only two out of thirty-four contractors that tendered for the works are Afro-Guyanese, one cannot conclude that Afro-Guyanese contractors are marginalised using this premise. Consequently, it is a deeply flawed and misleading perspective, or, at best, gross misrepresentation of the facts.
Shore bases: Nigel Hughes went on to argue that Shore bases in Guyana are like money-printing instruments, and argued that the shore bases in Guyana, the Government has only given Indo-Guyanese license to own and operate shore bases. This is an absolutely disingenuous statement, because Hughes did not care to fact check this and enquire how the first shore base was developed. The Government does not have to issue licences to anyone to own and operate a shore base.
In fact, let me explain briefly how the first and second shore bases were developed.
The first and only shore base that was developed is GYBI, which is majority owned by an Indo-Guyanese company, the principals of Muneshwers Group of Companies. Before any shore base was developed, all of the work was going to Trinidad and Tobago, where these facilities already exist. When the principals of GYSBI saw the opportunity to develop a shore base, they first approached the oil companies to finance the development, but were not successful. There were many challenges, especially to raise the financing, but it was a bold risk undertaken by the principals, who decided to raise their own financing and develop the shore base. They were so confident, and rightly so, that as long as the infrastructure is developed in-country, it would be needed and would be utilised, given the development prospects of the oil industry. So, this is how the first shore base was developed. The Government had absolutely nothing to do with this. I should perhaps highlight that the GYSBI shore base actually started under the previous Government post oil-discovery.
The second shore base which is being built across the Demerara River over at Vreed-en-Hoop, which is owned by a consortium of Indo-Guyanese businessmen, again, the Government did not issue any licence for this.
Incidentally, I was deeply involved in this process, hence I am very familiar with how this shore base came about. It started with an expression of interest (EOI), which then led to a request for proposal (RFP) by ExxonMobil for a new shorebase in Guyana to service the Yellowtail development in 2025. Both EOI and RFP stages were advertised in the public domain. This process commenced about three years ago. So, firstly, it was a publicly transparent process: only three companies, namely GYSBI, the consortium (NRG), and one overseas-based Indo-Guyanese entrepreneur participated or responded to the EOI and then the RFP. There were no Afro-Guyanese companies that participated.
The requirements, both technical and financial, were extremely tedious and costly. It cost the companies that responded to this process tens of millions of dollars to assemble a team of international experts and companies to put together the technical proposals. It was an extremely competitive process. Following the evaluation process by ExxonMobil, and subject to the approval of the Yellowtail project, a winner emerged, which was the consortium that is currently building the second largest shorebase across the Demerara River. This means that two prominent Indo-Guyanese entrepreneurs lost to the consortium, which is normal in business.
It is my understanding that there is no need for any other shore base in the medium term, as the current shore base and the new shore base being built are both sufficient to service the Stabroek block, as both existing and new shore base have the capacity to expand sufficiently to cater for the future needs. The need for new shore base facilities, however, will be dependent on the development of new oil blocks and new players in the market.