The Government is seeking to borrow more money as it makes efforts to do major road works on the Soesdyke Linden Highway, the primary gateway to the mining town of Linden. It will, however, be pursuing this project through another loan from a multinational development bank.
The Soesdyke/Linden Highway
This is according to Finance Minister Winston Jordan, who on Friday revealed that the funding for a pre-feasibility study for the Soesdyke/Linden Highway was being sought from alternative means.
This comes after reports earlier this year that the study would have to be stalled because of the reformulation of a loan agreement with the Inter-American Development Bank (IDB).
“The previous loan had studies earmarked. What is the new thinking? Studies for the Linden/Soesdyke Highway are now being earmarked to be done with alternative resources,” Jordan informed the National Assembly.
“I can tell you that we are working assiduously with an international development partner, a multinational development bank, to get a fast disbursing loan that will be targeted to the resurfacing of the Linden Highway.”
According to Jordan, the Linden-Ituni Road is currently under discussion. While the Government hasn’t identified a source of financing, Jordan said the subject was flagged as a matter of priority in discussions with the multinational bank.
At a press conference in October, Linden Mayor Carwyn Holland had said that the Public Infrastructure Ministry is set to undertake development projects on the Linden/Soesdyke Highway as early as next year.
Finance Minister Winston Jordan
The mayor said the promise was made public during a recent visit by Minister David Patterson, where it was noted that some $40 million would be allocated for repairs, upgrade and lighting of the highway, which has been dubbed “dangerous” by commuters.
The upgrade of the highway was initially expected to be carried out in 2017, but this was not done.
Debt
But if secured, this disbursement is likely to see Guyana‘s public debt rise. The Ministry of Finance’s recent Public Debt Annual Report had showed that, since 2015, there has been a 4.1 per cent rise in Guyana’s indebtedness to international lenders.
The report details that Guyana’s total debt, inclusive of external and domestic, increased to $330 billion as at December 2016. The Ministry attributed this to disbursements from the Export/Import Bank of China towards the Cheddi Jagan International Airport (CJIA) expansion project, as well as monies from multilateral creditors.A breakdown of the figures shows that total external debt amounted to $240 billion, a 72.6 per cent bite out of the total public debt. On the other hand, domestic debt stood at $90.6 billion, or 27.4 per cent of the total.
The report notes that Guyana’s four main external creditors are the Inter-American Development Bank (IDB), the Caribbean Development Bank (CDB), the state-owned Export-Import Bank of China (China EXIM Bank), and Venezuela state owned oil company (PDVSA).
Together, they constitute some 77.7 per cent of Guyana’s public external debt stock as at end-December 2016, with the IDB being the most dominant creditor. According to the report, the IDB has an average share of 42.0 per cent of the debt portfolio.
The CDB is Guyana’s second largest creditor, accounting for 12.6 per cent of total public external debt. The Export-Import Bank of China follows closely behind the CDB, with a 12.5 per cent share of external debt, while Venezuela’s PDVSA accounted for 10.6 per cent. Important to note is PDVSA has recently been declared to be in default of its debts by a trade group in the US.
