A GOVERNMENT bailout for the grossly indebted Georgetown Mayor and City Council (MCC) is not something that the Central Government would be looking to facilitate, notwithstanding the recommendations for such in the recently released City Hall Commission of Inquiry (CoI) report.
Minister of Communities, Ronald Bulkan, says he has not yet fully assessed the revelations and recommendations of the CoI report, however he does not believe a government bailout is imminent, especially in light of money already being channeled to the council by government.
“The government has been providing considerable financial resources by way of subvention to the Georgetown [Mayor and City] Council and it will continue to do so, but on the question of a mass bailout I don’t think that is on the cards,” Bulkan said in an interview with the Guyana Chronicle earlier this week.
A bailout by Central Government is one of the chief recommendations of the CoI report, which was compiled by Justice (ret’d) Cecil Kennard, the Chairman of the CoI. The report was handed over to the Local Government Commission (LGC) on November 30.
“I would recommend that there be… a government intervention to settle the outstanding debts,” the report quotes the Chairman – and sole Commissioner – as saying.
It notes that the bailout should come tied to certain conditions.
The report determines that City Hall owes over $47 billion to varying organisations, businesses, citizens and employees; the chief creditor being the Guyana Power and Light Inc., owed for electrical service.
Millions are also owed to the employees’ credit union, the Guyana Revenue Authority (GRA), and the National Insurance Scheme (NIS). The report also includes instances where it recommends compensation for some individuals owed by the council.
“I am in receipt of a copy, I’ve looked at it but I’ve not digested it fully as yet,” Bulkan related.
“I propose to look at it more carefully. There may be some areas that we will have responsibility for, but this CoI was commissioned by the LGC, and they’re the ones that have responsibility for regulations of the recommendations.”
Instead of looking towards a bailout from the Central Government the focus on is on making City Hall and other local government organs, more self-sufficient through their collection of rates and taxes. Towards this end a countrywide property evaluation has commenced.
“The Central Government is aware of the revenue challenges that face not only City Hall, but other local government organs by virtue of the fact that they’ve been no property valuation since 1995, which results in the absence of reliable and up to date information with regards to property value, one of the principal revenue tools. In recognition of this and in acceptance of this fact, Central Government has approved a $320 million contract for the countrywide evaluation, which would help to strengthen their ability to apply rates. It would pave the way for sustainability,” Bulkan explained.
This aside, Central Government nonetheless provides massive funding to all municipalities and neighbourhood democratic councils (NDCs) across the country.
In the 2019 budget, some $602 million is put aside for subventions, in the 2018 budget $1.026 billion had been budgeted for. How the local government organs spend the money however has often come in for question.
The 2017 Audit Report cited that most of the NDCs do not have up to date audits; in at least one particular case no audit has been done since 1995.
