Thursday, January 26, 2023

Bharrat tells oil sector long payment periods putting locals at disadvantage

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Minister of Natural Resources Vickram Bharrat has called on contractors, sub-contractors and licensees operating in Guyana’s oil sector to devise more timely payment plans for local businesses. This news comes on the heels of a slew of complaints that have been lodged with the Local Content Secretariat – an oversight body established under Guyana’s Local Content Act – which claim that the aforementioned parties take as long as twelve months to compensate local businesses for their services.

“Let us work together and see in principle if we can set a time frame that both parties can work with. We are not telling companies that they have to pay contractors two days after, we know that that is not possible. But there must be some reasonableness in terms of payments to local contractors – otherwise, we are going to kill our local contractors, and you will have created unfair competition for our local business… It is unfair to ask companies to wait six months sometimes for small payments like US$5,000, US$10,000 and US$15,000,” Minister Bharrat explained during a local content workshop held in Georgetown on Tuesday.

The Oil and Gas Minister went on to say that if the government and contractors are truly partners in the development of Guyana’s petroleum sector then the administration looks forward to their support in resolving this issue. 

“Maybe in a couple of years, they will be in a better position where they can probably wait three or four months for payments,” he optimistically said.

During his presentation, Minister Bharrat also took time to encourage companies to register at the Local Content Secretariat – located on Cowan Street, Kingston, at what was formally the office of the Guyana Rice Development Board (GRDB). This registration is required under the Local Content Act that was passed last year. The Act speaks to two registers that will be created under the law – one that deals with the provision of employment, and another that addresses the supply of goods. These registers will also serve as a platform where businesses can advertise their goods and services.

“There is nothing stopping anyone from visiting the Secretariat and registering themselves or companies. Any company is welcomed to visit the Secretariat and then placed on the Local Content Register,” Minister Bharrat said. 

Once operationalised, these registers will become public and be updated on a weekly basis. 

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