Remarks delivered by Hon Winston Jordan
Minister of Finance
Members of the Board of Directors
Management and Staff
Members of the Media
Distinguished Ladies and Gentlemen
I am extremely honored to have been invited to join the Board of Directors, Management and staff of Guyana National Shipping Corporation and all of the other special invitees at the commissioning of this new and modern warehouse. As you would have recognized from the agenda, today’s ceremony is very short, yet poignant, both in terms of the growth and development of GNSC and the advancement of our economy over the coming years.
I understand that the construction of this warehouse is a part of the company’s Strategic Plan that was developed to make it more relevant, more profitable and to enhance service delivery. Therefore, I want to take the opportunity to applaud the Board of Directors and Management for this initiative because, in the changing business environment and with the advancements in technology, companies must respond to and/or adapt quickly to changing customers’ needs, in order to remain relevant and successful in their business and to stand out among their competitors.
It is now globally accepted that, in order to provide efficient Marine Transportation Service, efficient warehouse management is paramount. In particular, an efficient warehouse service must have enough space to perform its inbound and outbound functions, in a timely manner and at the least possible cost. And so, it is my hope that with this new facility will add one more to the attributes that make GNSC a standout Corporation in the field: in addition, to having the biggest wharfage, the Corporation provides a conducive, safe and secure environment for doing business, attributes which rank highly in the preference profile of customers.
I hasten to add that you need to establish more modern warehousing policies and practices that would discourage cargo being stored for excessively long periods. This is an inefficient use of your warehousing facility and adds no value to the service you offer. The customers you serve must understand that when you agree to receive their cargo, it must be retrieved before a stipulated period.
Ladies and Gentlemen, this is a defining moment for Guyana. No, I am not speaking about recent political developments. Rather, I speak of the impending flow of oil and gas and what that means for the Corporation and the economy. As a company, with many years of experience, I expect that your sagacity would cause you to see new business opportunities in this new sector. I encourage you to take advantage of the many business opportunities that this nascent sector promises, so as to ensure that your company remains profitable and competitive, because, as the Minister of Finance, I am aware of the pressure that under-performance of state-owned companies put on the government’s fiscal position.
For many years, we have been made to support a number of state-owned entities, not least of which has been GUYSUCO. That corporation’s rapid decline has impacted many sectors and businesses in the economy, including GNSC, whose wharf, I believe, was used for the domestic transport of sugar. Together with the loss of business in other areas, GNSC’s profit margins have been sharply eroded, resulting in poor financial ratios and rates of return, given the significant assets available and/or employed. Where the Corporation should be declaring dividends to a cash-strapped Government, it is barely keeping its head above water.
The competition is fierce, but this can be met head-on with imagination, innovation and foresight. It would require visionary leadership from the Board of Directors and Management. It would call for a motivated and skilled workforce that is dedicated to making the Corporation number one. I am aware of your Strategic Plan, which highlights Warehouse development, equipment renewal and Wharf Rehabilitation as critical to the success of the Corporation’s 5-year programme. I am sure a lot of thought and brainstorming went into producing it. However, the proof of the pudding is always in the eating – in this case, in the implementation. Lofty plans and ideas mean nothing if their implementation is stymied by one challenge or another; they are met with indifference and reticence; and if they are constructed only to impress.
The Corporation is ideally situated and commands significant assets. But it has no money to implement the game-changing projects that can exploit the known advantages. I urge you to seek out partnerships to overcome this critical deficit. On the Government’s part, we have floated public-private partnerships (P3). We are in active discussions with the European Investment Bank (EIB) on a proposal. I am told that the Corporation has been providing information on its strategy and development plans to EIB for consideration.
Also, we have received an unsolicited proposal from an international firm that specializes in port development, to invest in the GNSC as a P3 venture. The GNSC has been provided with the proposal and it is under consideration. However, given past experience with flawed P3 investments, we have invited the International Finance Corporation, a member of The World Bank Group, to provide professional technical advice and guidance in structuring P3 investments that would be advantageous to our nation, and not be a burden on our taxpayers.
We have also secured technical assistance support from the Caribbean Development Bank (CDB) and The World Bank to developed a P3 Policy Framework that will serve as a guide to the private sector with regards to the methodology and processes to be adopted in our design, development and structuring of P3s. This Policy Framework was submitted to the National Assembly since 2017. So, even with the expected revenues from oil, P3’s will still be of critical importance to financing badly-needed investments in Guyana.
I must also add that, with the production of oil and, to a lesser extent, gas the Government’s plan is to diversify the economy, so as to ensure that we do not become like some oil producing countries, where oil becomes a curse rather than a blessing. Among other things, the diversification and expansion in the economy will result in a higher demand for imported goods and increase the level of exports. These changes will have implications for the services offered by this Corporation. Therefore, the Corporation should continuously update its plans and strategies to ensure that you can adequately respond to the needs of your customers. You should seek to build capacity and acquire new skills, where needed.
Let me say to the Board of Directors and Management that as a public corporation under the supervision of the Ministry of Finance, I look forward to the complete transformation of GNSC, and the completion of all of the elements of your Strategic Plan. This Government is single-minded in its commitment to provide a level playing field and an enabling environment within which businesses can thrive.
I would like to, once again, all those who were involved in making this new and modern warehouse a reality. I hope that this facility will better serve you and your customers.
I thank you.
More images of this event can be accessed via this link.