EXCLUSIVE EXPLORATORY LEASE FOR CTL
Gitanjati Singh Stabroek News August 1998
The Guyana Forest Commission (GFC) will move immediately to grant Case Timbers Limited (CTL) an exclusive exploratory lease and not a Timber Sales Agreement (TSA) for a 350,000-acre forest concession at Kwakwani.
However, Hamley Case, CTL's Managing Director, said on Saturday that he was still trying to sell this to his Malaysian backers who wanted to pull the US$52 million investment out of Guyana if TSA was not granted instead. He is to get back to the government on the issue.
Cabinet Secretary, Dr. Roger Luncheon, told Stabroek News on Friday that his government would work to resolve the issue to the firm's satisfaction. It would also honour the commitments of the last President, Cheddi Jagan, to the said investors who also control the United Amalgamated Communal Industries Limited (UNAM-CO).
In August 1996, UNAM-CO threatened to pull out because of frustration over both investments, and the late President intervened, giving a commitment that CTL would get a 25-year TSA for 155,000 acres of land immediately approved. Additionally, he had said, after one month, the firm would get an exploratory leave for 355,000 acres which would be converted into a TSA within two year. The two concessions would equate to the 750,000 concession which CTL had held in the North West and which had expired.
"Two years have gone by and we haven't even gotten the exploratory lease," Case said. He went on to say that following the passage of legislation in parliament to allow for the granting of exploratory leases, CTL last year reapplied for the permit and made the US$20,000 payment. The GFC, he contended, would be earning interest on this sum.
However, Case confirmed that his firm was offered an exploratory permit three months ago by the GFC, but they refused it because it was not an exclusive permit, and other investors could have had access to the concessions. He said the government had undertaken to correct this.
A 20 percent stakeholder in CTL and UNAMCO, Case said the former was in a position to do the topographical survey and forest inventory, among other requirements of the permit, in three months. The permits are of three years duration.
As such, the firm was demanding that upon the completion of the work required under the permit and approval of the same by the Guyana Forestry Commission, the TSA be granted immediately.
"I expect a TSA by November, and if the Malaysians agree with my recommendations and the TSA is not granted in November, the investment will definitely be pulled," Case stated.
Case said the US$27 million plymill sitting at the GNIC wharf since August of last year, would not be constructed until the TSA was granted. The concession is to be the source of raw materials for that mill.
The businessman said that with interest charges, insurance, and security expenses, along with storage fees of $1.6 million per month, the plymill was now worth $30 million.
Dr. Luncheon said that Cabinet last Tuesday appointed a subcommittee to deal with the issue. He said the committee met on Thursday with officials of the GFC and with CTL officials.
"The meeting with [Case Timbers] was fairly useful. Both sides left furthering the resolve to make sure that this deal goes through and undertakings [were given by the government] to put in place certain agreements that would remove frustrations and allow this process to continue," Dr. Luncheon said.
He said that the Cabinet sub-committee had agreed that the matter would be dealt with to CTL's satisfaction. Luncheon, however, noted that there was no automatic granting of an exploratory permit or TSA under the law, but that once the prerequisites had been met, the government would have no problem giving the go ahead.
"We would ensure that the [late President's] undertaking to UNAMCO [and CTL] are realised," Dr. Luncheon stated.
The head of the Presidential secretariat also said that the firm was not unaware of the country's economic straits and the need for investments.
He noted that investors had justifiable interests and Guyana's economic and financial position had to be brought to bear when dealing with investors.
UNAMCO, 20 percent of which is owned by Case and 80 percent by Malaysian, Villupillai Kanagalingam, was fined US$1 million for illegal logging in its concession earlier this year. Case yesterday said that the fine, which his firm referred to as a compounded fee, had been paid in June. Together, the two firms currently have control of 391,000 acres of concession.