Last Updated on Tuesday, 4 April 2023, 13:08 by Denis Chabrol
Vice President Bharrat Jagdeo on Tuesday said Guyana’s Local Content legislation would be amended to prevent companies from cheating on the ownership, financial and operational structures and so breach the intent of creating greater opportunities for Guyanese.
“We have seen some attempt by foreign companies to bypass the legislation through all sorts of means,” he told the opening of a Local Content Summit.
Describing those loopholes as “contentious”, he said government would be using Tuesday’s event to kickstart its review of the now almost two-year old Local Content Act and amend a number of areas. Those, he said, include companies with 51 percent Guyanese ownership obtaining a loan of assets which would see the certified company probably never declaring a dividend.
Mr Jagdeo said there were also instances of a number of first tier contractors allegedly outsourcing several of their activities because their reporting relationship was not strong enough. He said under such arrangements, the local content certified companies were outsourcing those areas that are “already carved out for Guyanese.”
Though the Guyana government seemed to be generally satisfied that local contractors were being paid quicker, the Vice President said there was room for further improvement. “We still need to focus a bit more on that to ensure that the system is such that it encourages local people who have limited access to bank financing that they get paid faster,” he said.
Officials said more than 500 companies have been certified as local content providers, and so far locally-registered companies have, according to Mr Jagdeo, raked in more than US$700 million, “a sizeable chunk without changing the fiscal terms for the Stabroek Block” under the Production Sharing Agreement with Esso Exploration and Production Guyana Limited.