…revenue losses for Guyana pegged at $70M

TODAY, August 16, 2019, marks 79 days since the M.V. Canawaima, the ferry vessel that plies from Moleson Creek on the Guyana side to South Drain in Suriname, was pulled from service after it had been experiencing mechanical difficulties for some time.

The vessel had, for 20-plus years, been providing a vital service for several businessmen and women, who ply their trade between the two countries, as well as tourists and others.
But with `no light seen in the horizon’ as it relates to the two countries meeting to arrive at a solution, the resumption of operations of the ferry vessel remains in limbo.

Meanwhile, both Guyana and Suriname, having entered into a joint-venture arrangement for the ferry vessel on November 6, 1998, continue to lose much-needed revenue.
According to a source close to the operations, the suspended service has seen Guyana losing approximately $70M in revenue while pointing out that the months, June and August, are considered peak periods when much revenue is collected.

This publication understands that Guyana’s Transport and Harbours Department Inc. (T&HD Inc.) and Sheepvaart Maapshappij NV of Suriname (SMS), the representative bodies for the Canawaima Ferry Service Inc. (CFS Inc.) are at loggerheads over the use of the ferry vessel.

Suriname wants the vessel to undertake the journey aided by a tug boat, but Guyana remains adamant that the Canawaima must instead be placed into dry dock for overhaul maintenance, with the T&HD’s vessel– the MB (Motor Boat) Sandaka– operating as the replacement in its absence.

For three days, May 31 to June 2, 2019, after the M.V Canawaima was suspended, the M.B. Sandaka assisted in transporting passengers and their goods. It had operated then with a defect which was corrected within a week and was available to resume full operations on June 9, 2019, the source related. However, the arrangement hit a snag with a disagreement between Guyana and Suriname in relation to payment for chartering the vessel and then the vessel remains moored and remains idle, even as costs are being incurred.

It was pointed out that when the vessel is operational, the charter cost is US$1000 per day and US$500 per day when idle.

The non-operation of the ferry service, in addition to the loss of revenue, is also of great inconvenience to those businessmen and women who trade goods between the two countries, as they now have to reluctantly use the ‘backtrack’ service, which is not relatively safe.

According to the source, Guyana’s T&HD Inc. and SMS of Suriname are part of the Canawaima Management Company (CMC) of the Canawaima Ferry Service Inc. (CFS Inc.) and, according to the agreement, all revenues collected should be deposited into a fund managed by CFS Inc.

Also, on a monthly basis, CFS Inc. will disburse a subvention into the respective T&HD Inc. and SMS account.

Meanwhile, expenditure for minor and major maintenance of the vessel, which was registered in Suriname, is incorporated in a budget prepared by the management companies and ratified by CFS Inc., with the money coming from the consolidated fund.
It was noted, however, that while Guyana from the inception opened and has been maintaining a fund, this has not been done by its Suriname counterpart which instead has been utlising the revenue it collects as it chooses.

And, going against the goodwill of the agreement too, the source said that Suriname has reportedly been putting works for tender, ordering spares and up-keeping no docking list, without Guyana having an input. “Guyana is not involved in anything that Suriname is doing with respect to the M.V Canawaima, they have even gone ahead and selected a company of their choice to undertake the docking,” the source revealed.

In January 2018, the ferry service was suspended for nine days when the vessel developed mechanical problems. With the Guyana/Suriname ferry service out of operation, persons travelling to and from the neighbouring country via the backtrack route have been urged to present themselves to immigration officers for processing, as failure to do so can result in prosecution.

Processing of the documents can be done at immigration offices that are located at Republic Square, Springlands or at Port Moleson Creek.

The ferry service between Guyana and Suriname was officially launched on November 6, 1998. It is a joint venture and the financial and other arrangements for defraying operational expenses are outlined in the Memorandum of Understanding between the Government of the Cooperative Republic of Guyana and the Government of the Republic of Suriname on the Formation and Operation of the Joint Ferry Service between the Cooperative Republic of Guyana and the Republic of Surname (1998).

According to the agreement, the maintenance of the ferry is to be shared equally. This has not occurred. In a bid to reduce the hardships to passengers and businesses using the service and in order to give the neighbouring state time to meet its obligations, the Government of Guyana has been funding most, if not all, of the maintenance works on the ferry over the years.