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Loan
to Guyana opposed by U.S. company |
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By John Collins (1)
Action
in U.S. court seeks to block Inter-American Development Bank loan for another
U.S. firm; U.S. government in middle.
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 GEORGETOWN,
Guyana – Atlantic Tele-Network (ATN), parent company of the Guyana Telephone
& Telegraph Co (GTT), is asking the U.S. District Court for the District of
Columbia to block an $18 million loan to Guyana by the Inter-American
Development Bank (IDB), charging that the funds will be used to break its
monopoly there.
ATN, which
is headquartered in St. Thomas, U.S. Virgin Islands
received a 40-year exclusive license in 1991 when it bought the
state-owned GTT for $16 million (CB April 12, 2001). Since then its total
investment in GTT has reached $150 million, it has more than 700 employees,
82,000 wireless and 55,000 cellular subscribers, according to Cornelius Prior,
ATN chairman. Telephone penetration is Guyana now is 10 per 100 inhabitants
compared with only 2 per 100 in 1991. In the U.S. its 65 per 100.
 ATN
is seeking an injunction directing U.S. Treasury Secretary Paul O’Neill to
instruct Jose Fourquet, the U.S. executive director at the IDB to vote against
the loan. ATN is also seeking a temporary restraining order to block all other
IDB loans to Guyana.
Puerto
Rico-born Fourquet is a Bush Administration appointee (CB May 23).
“We want
to protect our investment and we have turned to this route because we have had
no success in trying to resolve our differences with the Government of
Guyana,” said Prior.
Cited by
ATN for justification in the case is Title 22 of the U.S. Code Section 283 which
defines U.S. participation in the IDB. It states that the President shall
instruct the U.S. executive director “to vote against any loan or other
utilization of the Bank for the benefit of any country which has taken steps to
repudiate or nullify existing contracts or agreements with any U.S. citizen or
any corporation….or imposed or enforced…restrictive maintenance or
operational conditions, or has taken other actions, which have the effect
of….otherwise seizing ownership or control of property so owned.”
The
preliminary hearing in the case, scheduled for yesterday (July 24), is in the
courtroom of famed Judge Thomas Penfield Jackson who recently tried the
Microsoft antitrust case.
Insisting
that ATN “is not against the IDB loan to Guyana per se,” Prior said
“we’ve got to negotiate the introduction of competition and if that is what
they want then we must get compensation if our monopoly is broken.”
Another
U.S. company involved
 Details
about the proposed project, to be financed by the $18 million loan from
the IDB and an additional $4 million to be put up by the Guyana Government.,
have not been provided but another firm, Caribbean Wireless Telecom LLC of
Minneapolis, Minnesota, is also a party to the suit. Caribbean Wireless is
headed by a Guyanese-American lawyer Earl J. Singh.
He insists
that its time to open up Guyana to competition and afford Guyanese more
economical access to abroad as well as to make the country more attractive to
outside investment. As in a number of other developing countries, GTT is often
the target of abuse by its subscribers who have a litany of complaints about it.
But its defenders, citing the state of service when ATN entered the country,
insist that people have short memories.
When the
purchase of GTT by ATN occurred 12 years ago the Internet was in its infancy and
was virtually unknown in Guyana. Today lining many streets in Georgetown are
Internet store fronts and cyber cafes which offer customers economical access to
the Internet. While some of the connections are via GTT, an increasing number of
them bypass it by pulling down the signal by wireless. This situation is not
only eroding GTT’s revenues but creating a thriving industry in pirated
Internet access.
While
business centers in the few major hotels charge First World
prices, the stores fronts and cafes routinely charge $1 per hour which is
ridiculously cheap but about what the market will bear in a poor country with an
annual per capita income of $986. The innovative manner in which the
Internet is utilized for different forms of communication is quite impressive.
Prior
acknowledges that its 1991 sale agreement did not cover Internet but insists
that it didn’t have to because it clearly states that “all international
voice and data access must be through GTT.”
 President
Bharrat Jagdeo of Guyana said ATN’s decision to have a U.S. court intervene
comes as the government was negotiating with ATN. “I see this as an attempt to
blackmail the country and to prevent ordinary citizens from having access to
these services,” said Jagdeo.
Negotiations
stalled
Indicating
that there are no negotiations going on, Prior said “a year ago the government
told us they wanted to remove the exclusivity clause from the contract. We told
them we’d have to negotiate a new agreement. We last met in Trinidad in April
and were told they’d get back to us with a memorandum of agreement to sign in
two weeks. We’re still waiting.”
The
government is insisting that it has to open up telecommunications to competition
in order to develop the vast country of 83,000 square miles
and only 782,000 inhabitants, more than 90% of whom live near the
Atlantic coast. It says it wants to use the $22 million project to open 200
Internet access points around the country and give free service to those who
can’t afford it.
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1)
Other articles by the well known Caribbean author John Collins can be read
at:
www.pymesdominicanas.com
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July
22, 2002
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