China Eximbank provides RMB 215 million government concessional loan for E-Government Project

On October 10, 2011, the Chinese Government and the Government of Guyana signed a preferential loan framework agreement for the E-Government Project. Then, on November 4, 2011, the Export-Import Bank of China and the Government of Guyana signed an RMB 215,000,000 government concessional loan (GCL) agreement [China Eximbank GCL NO. (2011) 35 No. (385) No. 1420203052011111336] for the E-Government Project. The GCL carries the following borrowing terms: a 20 year maturity, a 5 year grace period, a 2% interest rate, a 0% default (penalty) interest rate, a 0.75% (RMB 1,612,500) management fee, and a 0.5% commitment fee. The proceeds of the GCL were to be used by the borrower to finance an RMB 214,118,400 ($32 million) commercial contract (#0007801010270G) between Huawei Technologies Co. Ltd and the Government of Guyana, which was signed on October 27, 2010. As of December 31, 2020, the loan’s total amount outstanding (including principal and capitalized interest) was RMB 158,862,000. The project had two subcomponents: E‐Government Dense Wavelength Division Multiplex (DWDM) and E‐Government (LTE). The purpose of the E‐Government Dense Wavelength Division Multiplex (DWDM) project subcomponent was to lay fiber optic cable from Lethem to Georgetown. The purpose of the E‐Government (LTE) project subcomponent was to construct 54 Long Term Evolution (LTE) sites along the coastline of Guyana between from Corriverton to Charity (Chastity) in the following locations: Georgetown (5 LTE Sites), East Coast Demerara (14 LTE Sites), East Bank Demerara (4 LTE Sites), West Coast Demerara (8 LTE Sites), West Bank Demerara (2 LTE Sites), West Coast Berbice (3 LTE Sites), East Berbice Corentyne (8 LTE Sites) Linden (3 LTE Sites), Essequibo Coast (6 LTE Sites), and Letham (1 LTE Site). Huawei Technologies Co. Ltd. was the contractor responsible for project implementation. By May 25, 2015, the project had achieved a 90% completion rate and the loan/commercial contract had achieved a 95% disbursement rate ($30.4 million out of $32 million or RMB 203,412,473 out of RMB 214,118,400). By the end of 2015, over 90% of the project had been completed. However, a December 2015 forensic audit of the project revealed that the E‐Government Dense Wavelength Division Multiplex (DWDM) project component ‘was abandoned in 2013.’ The audit also identified ‘weak or inadequate systems and procedures to adequately govern the project, and account for its finances, significant non‐compliance with the Procurement Act and inadequate hiring practices’. Then, in April 2022, the country’s former Auditor General, Anand Goolsarran, told the media that the E-Government Project had ‘failed completely’ to deliver in terms of their objectives, outputs, outcomes and impacts, thereby ‘encumbering the Guyana’s public debt […] with little or nothing to show for the expenditure incurred’. He also said that the DWDM project subcomponent ‘had to be abandoned because numerous problems were encountered in the laying of the cables from Brazil through Guyana’s interior towards the coast.’

Additional details

1. The loan contract can be accessed in its entirety via https://www.dropbox.com/s/r9bgf205f5a1a0t/Government%20Concessional%20Loan%20Agreemnt%20signed%20on%20Nov%204%202011%20between%20Guyana%20and%20the%20Export%20Import%20Bank%20of%20China.pdf?dl=0 2. The October 27, 2010 commercial contract is also known as the Equipment Supply and Implementation Service Contract for Guyana E-Government Project. 3. The forensic audit of the E-Government Project, which was conducted by Ram & McRae, Chartered Accountants, can be accessed in its entirety via https://www.dropbox.com/s/zq91avhtrryelmp/Forensic-Audit-of-E-GOV.pdf?dl=0. 4. Mr. Alexei Ramotar was the E-Government Project Manager.

Number of official sources

9

Number of total sources

14