…Finance Minister lauds IDB’s “fast-paced” investment into Guyana
The Inter-American Development Bank (IDB) and John Fernandes Limited (JFL) have signed a US$4 million loan agreement that will see Guyana getting only its second mobile handline crane (MHC), a development hailed by Finance Minister, Dr Ashni Singh for its potential to boost Guyana’s shipping capacity.
During the virtual ceremony, Dr Singh noted that the agreement not only allowed for developing the port facilities in the country, but also signalled IDB Invest’s commitment to aggressively aiding Guyana’s development.
“He recalled that it was the same institution that only in October signed a similar loan agreement of the same cost with Muneshwers Limited for the procurement of Guyana’s first mobile crane,” a statement from the Finance Ministry on Wednesday said.
Dr Singh commended both John Fernandes’ Chief Executive Officer (CEO), Philip Fernandes and the acting IDB Group’s Country Representative for Guyana, Lorena Solorzano Salazar for the fast pace at which the agreement was finalised.
IDB Invest, the Private Sector arm of the IDB, was represented during the virtual ceremony by CEO James Scriven. Also attending was IDB Representative Solorzano. John Fernandes was represented by CEO Fernandes and others.
According to the IDB, the transaction will not only support increased cargo handling capacity from the current 33,000 twenty-foot equivalent unit (“TEU”) containers per year to 100,000 TEUs per year in 2032, but also improve the port infrastructure in Guyana. This will, in turn, contribute to timely and efficient handling of rising international commerce in the country.
“The IDB noted that currently, all port operations in Guyana rely on crane vessels for loading and discharging containers and that these are less efficient and have less cargo-handling capacity than an MHC.
“As such, with the incorporation of the MHC, JFL would be able to service gearless vessels that can carry a substantially greater amount of cargo and do so more efficiently due to the MHC’s ability to load and discharge containers at a higher rate,” the Finance Ministry said.
The People’s Progressive Party/Civic (PPP/C) Government has made a concerted effort to bring down shipping costs, which have been skyrocketing globally as a result of disruptions to the supply chain caused by the COVID-19 pandemic and then the Russia-Ukraine war.
In 2021, President Dr Irfaan Ali announced several reductions to shipping-related charges to the tune of $4.8 billion in order to cushion the high costs resulting from the pandemic. These measures were intended to reduce the adverse impact of increased freight costs on Customs Duties, Excise Taxes and Input VAT calculations, by reverting to pre-pandemic estimates.
While these reductions would result in the Treasury losing the consequent $4.8 billion in revenues, the President had described them as necessary for dealing with the socio-economic effects of the COVID-19 pandemic.
The Government had also assured that it would continue to monitor the effects on household income, the Private Sector, and the economy on the whole. An example was given where in some countries, shipping costs have moved from an average of US$2500 to as much as US$15,000 per 20-foot container and from US$3500 to over US$20,000 for a 40-foot container. (G3)