Fund manager bids will be thoroughly reviewed – Jordan

Natural Resource Bill

…Jagdeo says passage of bill illegal

The Natural Resources Fund Bill, one of several pieces of legislation passed in the National Assembly on Thursday last, will have to be implemented soon, with little over a year before first oil. There is much, however, that remains to be done.
In a recent interview with Guyana Times, Finance Minister Winston Jordan spoke of the challenges that will have to be surmounted to make the Fund a reality. A crucial one will be appointing a firm to manage the Fund.
“We are already putting in place the programme’s activities, leading up to the Fund’s readiness. We have a number of things we have to do, like appointing the investment manager, drafting the investment contract, sending out requests for proposals to manage the Fund, the various institutions and the 22-man committee has to have its own secretariat.”
“We have to work through those things. So we have quite a bit, an extensive programme mapped out,” he said, adding that this will be released to the public. “The clock starts ticking when the Bill is assented into law.”
Jordan noted that besides the technical assistance Government receives from its bilateral partners; he is in talks with persons possessing the requisite experience to provide advice on setting up the Fund.
Jordan acknowledged that there are pitfalls in establishing a fund that Government will seek to avoid. One way they will do this, he said, is making sure bid proposals from potential fund managers are examined thoroughly.
“So we have to look for a coordinator who has wide experience in these areas,” he said, adding that to send out requests for proposals Government must determine “what (the proposal) entails, what it is we have to have, what we are looking for.”
“When we go through all the tenders that come through, what kind of qualifications do we have to look for. So it’s quite a bit of work in an area where we virtually have (little experience). So we have our work cut out for us over the next couple months.”
All of this will represent a monetary windfall for Guyana, which will be saved and invested through a Natural Resources Fund. A green paper on the Fund was recently laid in the National Assembly, but the Fund itself is still in its planning stages.
Government had released the draft Natural Resources Fund Bill of 2018, which had proposed among other things a 22-member Public Accountability and Oversight Committee that would oversee the management of the Fund and provide checks and balances.
Then there is the issue of the fund managers. United States-based Investment firm Merrill Lynch has for some time expressed an interest in being involved in managing Guyana’s oil finances. In fact, representatives from the firm had reportedly met with Central Bank Governor, Dr Gobind Ganga.
Following the passage of the controversial Natural Resources Fund Bill on Thursday last in the National Assembly, Opposition Leader Bharrat Jagdeo has contended that it was illegal as a result of the motion of no confidence that was passed last month.
He also noted that the Bill was flawed. At the time the Bill was passed, the parliamentary Opposition refused to be part of the National Assembly claiming that it was unconstitutional in light of the passage of the no-confidence motion.
He added that the Party has made it clear that the Government should not pass any bills during this period when the President and his Cabinet should be tendering their resignations.
Earlier, the Opposition has urged that the vetting process for the fund manager be a rigorous one. Jagdeo spoke on the matter during a press conference late last year. At the time, he was asked to comment on the possibility of Merrill Lynch coming to Guyana. While he did not reference that firm, Jagdeo had issued a general warning of the need to beware of opportunistic companies looking to make a profit at Guyana’s expense.
“We have to learn to sift them through, look at their CVs, their track records, who delivers the greatest returns; if we’re looking for fund managers, who delivers the greatest returns on funds managed over a long historical period, who has pretty safe investments.”
“All those things have to be (factored in). Right now, you’re going to have everyone under the sun coming here to try to be the fund managers,” Jagdeo, a former President and Finance Minister explained.
Jagdeo had recommended that prospective fund managers be prequalified, after being screened and background checked. He suggested that once this is done, Government make its sale pitch to each of these companies, hear their feedback and decide which will be more beneficial to the country.
“So assuming someone says I want one per cent as a fund manager, and another person equally qualified and great track record says they’ll take 0.5 per cent. Then you take that (person). Government has to lead the process, but it must be transparent,” he had said.