The following was taken from the speech made by Minister of Finance, Honourable Winston Jordan, during his presentation of the 2016 Budget, on Friday January 29, 2016. Here, Minister Jordan explains the plans of the Guyana Government for the development of the nation's infrastructure.
1. Addressing the Infrastructure Deficit
4.38 Mr. Speaker, the absence of well-developed infrastructure has impeded the country’s development in several ways. Inadequate transport linkages across Guyana have increased production costs, making many of our products uncompetitive in world markets. Limited road, water and air access across Guyana has obstructed our ability to fully exploit the abundant opportunities in our tourism and natural resources sectors. Skewed transport road network development systems have thwarted the creation of employment opportunities in areas outside of the coastland. Sub-optimal infrastructure in housing settlements has prevented the development of sustainable communities. We have recognized these impediments. This is why this budget has placed a high priority on infrastructural development.
4.39 Mr. Speaker, our existing road network is incapable of meeting the rapid growth in vehicular traffic over the last decade. The consequences of this mismatch are many, including frustration of all road users; lost time and productivity due to delays; and frequent accidents, many of them deadly. The recently-expanded East Bank Demerara Road is already incapable of accommodating the flow of traffic into the country’s capital, while the East Coast and West Coast Roads can be harrowing during rush hours.
4.40 To address this lacuna, the Government has concluded a sustainable urban transport plan, which includes, among other things, a traffic model for Georgetown, a parking management plan, regularization of mini-bus operations, provision of public transport facilities, and the use of public transport and non-motorised modes in the most congested areas. In addition, we have budgeted $14.4 billion to continue the upgrade, expansion and rehabilitation of our network of roads and bridges. The Government is finalizing negotiations with the Government of China for the construction of the East Coast Highway, from Better Hope to Belfield. In collaboration with the IDB, the Government will, this year, conduct studies and designs for an improved East Coast Railway Embankment Road, entailing the construction of bridges between Sheriff Street and Mahaica; the upgrade of the current embankment road, from Sheriff Street to Enmore; and the extension of the embankment road, from Enmore to Mahaica. Additionally, we will be investing over $5.0 billion in the reconstruction of Sheriff Street that will facilitate improved traffic safety features, including pedestrian overhead crossings at strategic locations.
4.41 Shortly, a US$50 million loan will be signed with the Government of India to construct a new road link between Ogle on the East Coast of Demerara and Diamond on the East Bank of Demerara. The proposed new road will intersect several communities, including Sophia, South and North Ruimveldt, Eccles and Providence, creating an alternative access route to these densely populated areas, expanding business opportunities and opening new lands for housing development. Overtime, it is the vision of the Government to extend this East Bank-East Coast road link, to connect the Ogle International Airport and the Cheddi Jagan International Airport. We will invest $2.3 billion to upgrade the West Coast Demerara Road, from Parika to Vreed-en-Hoop. The works include widening the corridor and improving road safety features.
4.42 Mr. Speaker, connectivity between West Demerara and Essequibo Coast and Islands is severely challenged by the current aged floating bridge across the Demerara River. The daily traffic bottlenecks to access and exit the city create untold hardships for commuters and business alike. We must construct a fixed high-level bridge to facilitate easy commute and allow for improved river navigation. We are committed to this project and, in this regard, have made provision, in this budget, for the conduct of the feasibility study. This is the first step to realizing a public-private-partnership for construction of the bridge.
4.43 Addressing the deplorable and underdeveloped infrastructural facilities in the hinterland region is paramount on the Government’s infrastructural development agenda. The Government will pursue several initiatives, in an effort to expand the integration of road networks into our intermediate savannahs, thereby helping to bridge the divide between our vast rural and hinterland communities and the coastland. A total of $6.72 billion has been allocated for the improvement of hinterland, rural and urban community roads in Bartica, Mahdia, Ituni/Kwakwani, Puruni/Itaballi, Mabaruma and Port Kaituma/Baramita and the Sophia ring road, among others. In collaboration with the IDB, we will commence activities to facilitate the complete rehabilitation of the 47 year old Soesdyke/Linden Highway. In the meanwhile, critical works will be undertaken to preserve its upkeep. Concurrently, maintenance works will be undertaken on the Linden/Kwakwani corridor. Over the longer term, we aim to fully pave this road so as to open access to communities in Ituni, Aroraima, Kwakwani, Ebini, Kimbia and other remote areas along the Berbice River. A feasibility study for the reconstruction of the existing bridge which links the communities of Wismar and MacKenzie will also be carried out.
4.44 An alternative link to Bartica and other hinterland communities would be created when on-going negotiations with our development partners to construct the Parika/Goshen road are finalized. Additional resources have been made available to expand efforts currently being undertaken to improve farm-to-market access roads at Parika, Ruby and Laluni. We are in discussions with the same donor for new farm access interventions in Triumph, Buxton and Ithaca, in order to stimulate micro-farms and small scale agro- processing initiatives.
4.45 Mr. Speaker, the full potential of residents living on the banks of our numerous rivers and waterways has been inhibited by the poor and inadequate river transport network. To vastly improve river connections between the coast and riverain areas and remote regions, the ageing fleet of vessels must be replaced. In this regard, the Government expects to conclude arrangements, soon, with the Government of India, for financing to procure new river transport vessels. In addition, private financing is being explored for the purchase of at least two, semi-new vessels. To complement spending on the new fleet of ferries, emphasis will be placed on navigational aids and improving stellings and wharves. To this end, the Government has started preparations to access the UK–Caribbean Infrastructure Fund (CIF), to upgrade and reconstruct several facilities in Georgetown, Parika, Port Kaituma, Kumaka and Bartica, among other areas.
4.46 Mr. Speaker, on a related and very important matter, navigation of Port Georgetown is severely hampered because of the siltation of the channel and the presence of several wreckages. This has led to restrictions in container traffic and increased cost of shipping. Similarly, our main rivers and creeks are clogged and, oft times, are inaccessible to our ferries and water taxis. To avert a potential crisis, the Government will aim to secure funding, through the UK-CIF, to purchase a dredge. It is expected that the dredge will be managed and operated in collaboration with Maritime Administration Department (MARAD) and the Shipping Association of Guyana (SAG). In 2016, an amount of $1.3 billion is budgeted for works to commence on the rehabilitation of the Bartica stelling and the goods wharf at Kingston; docking of dredges and ferry vessels; dredging of the Demerara and Essequibo Rivers; and installation and maintenance of navigational aids.
4.47 Mr. Speaker, works will begin on a phased waterfront development programme over the next 5 years. This investment, estimated to cost over $1.6 billion, will see the development of state-of-the-art waterfront facilities, which will be on par with those in the Caribbean. This development will target Kitty, Kingston, Stabroek, Vreed-en-Hoop, Supenaam and Skeldon. The proposed project will include boardwalks; recreational areas; modernized ramps for ferries and water taxis; and a dockyard for yachts. The initiative will serve as a recreational and tourist attraction, and will create opportunities for small business development.
4.48 Mr. Speaker, the growth of the air services industry, with injections of new and improved technologies and the ever-expanding list of travel destinations being offered to our people, has induced Government to undertake a massive upgrade of our airports and aerodromes. An allocation of $5.2 billion has been made for the continued development of the air services industry, including the expansion of the Cheddi Jagan International Airport. The improved facilities at the Ogle International Airport has led to increased services to multiple local and overseas destinations, inclusive of commercial flights at nights. The extension and upgrade of the Ogle runway has transformed the airport into a Regional hub, linking Georgetown to Suriname, Barbados and Trinidad. We are currently pursuing financing, in an effort to upgrade many of our hinterland airstrips at Eteringbang, Annai, Paramakatoi, Kurupung, Kato, Kopinang, Monkey Mountain and other locations. The Government is earmarking over $2 billion, in the medium term, for its Airstrips and Aerodromes Improvement Programme.
4.49 Mr. Speaker, similar to the experiences of Small Island Developing States (SIDs), Guyana is most vulnerable to climate change impacts. We continue to be threatened by rising sea levels and an aged and weakened sea defence system. With the heart of Guyana, Georgetown, being in the sight of the mighty Atlantic Ocean, significant investments must be made to protect people, property, livelihoods and infrastructure. The Government has developed long term sea and river interventions with several donors. We have negotiated sea and river defence programmes amounting to over $6 billion to erect and strengthen our bulwarks as well as to fashion a comprehensive instrument for coexisting harmoniously with our ocean and rivers. To support these efforts, the Mangrove Restoration Project and the Shorezone Management Plan will focus on developing natural mangrove regeneration initiatives that facilitate eco-friendly solutions while preserving the livelihood of people living in close proximity to the sea.
Energy
4.50 Mr. Speaker, the current fluctuation and volatility of oil prices has convinced the Government of the correctness of its policy of “greening” the economy through adopting clean energy solutions. The Government is currently collaborating with the IDB to define an energy matrix that will determine the best blend of energy options to ultimately boost the resilience of the energy sector. A draft of this matrix has been completed and it is expected to be finalized this year. One option that has been presented in the matrix is the Amaila Falls Hydro Project, which was determined by the Coalition Government to be not viable in its current configuration. The Government of Guyana and the Kingdom of Norway are currently engaged in discussions for a final review and determination of the future of this Project.
4.51 Mr. Speaker, the Government’s thrust towards creating sustainable cities and communities that are powered by green energy solutions is being actively pursued. The Government proposes to prioritize the construction of four mini-hydro power stations at Kamaira, Kumu, Tumatumari and Tiger Hill, which will contribute to development efforts in the communities identified for upgrade to towns. The Government has invited expressions of interest (EOI) from firms for the rehabilitation and operation of the Moco Moco Hydropower Scheme, under a Build, Own, Operate and Transfer (BOOT) arrangement, to supply power to the Lethem Power Company Inc.
4.52 Mr. Speaker, the Tumatumari Hydropower Scheme is also being re-developed by a private company, Tumatumari Hydropower Inc. (THI). The company is seeking to supply Mahdia with electricity through a power purchase agreement (PPA) with Mahdia Power and Light Inc. The Government is currently in discussions with THI for the completion of a hydropower development so that consumers at Mahdia can enjoy the lowest possible electricity rates. Accordingly, the Government intends to finance part of the scheme, using funding from the Global Environmental Facility (GEF), which is being managed by the IDB, under the Sustainable Energy Program for Guyana.
4.53 In 2016, the Government will invest $2.5 billion in initiatives to improve GPL’s operational management capabilities. Approximately 830 km of the main distribution network will be rehabilitated, with a focus on reducing electricity losses and improving the safety and reliability of the electrical system. The Government is examining a number of un-served areas with a view of providing electricity to residents in those excluded communities, so as to improve living conditions.
4.54 The Government is negotiating a power purchase agreement with a private developer for a US$50 million wind farm at Hope Beach. This facility is expected to provide an additional 25 megawatts of power to the national grid. Currently, the Guyana Power and Light (GPL) generates power at an average weighted cost of US$0.28 per kilowatt hour. The new project will likely offer GPL energy at less than half that cost, which will translate to lower electricity tariffs to consumers.
