The Government of Guyana is considering an amicable repayment proposal from the Panamanian Government for rice supplied years ago but never paid for, Attorney General Anil Nandlall said Monday.
If the government accepts that proposal from the Government of Panama, it may forego the interest accrued over the years.
“Based on the proposals we have received, which we are actively considering, Guyana may have to forego the interest accrued under the debt.
“The interest is almost the same size or larger,” Nandlall said at a press conference held at the Arthur Chung Conference Centre at Liliendaal, Georgetown.
What is the deal?
Last year, it was reported that over $1 billion remains outstanding for rice supplied on credit to authorities in Panama by the former APNU+AFC government in 2018.
The former government boasted about securing the Panamanian market for struggling rice farmers and millers then but when the US$7.1 million in rice was delivered to the Guyana Rice Development Board (GRDB), it was sold on credit to authorities in Panama.
Soon after, the APNU+AFC government fell on a vote of no-confidence and payments for the rice were never made and neither were the creditors pursued before the APNU+AFC left office in 2020.
Why consider the proposal?
Nandlall explained that Guyana’s President Dr. Irfaan Ali intervened and managed to get the Panamanian government to enter into talks for an “amicable resolution” of the matter.
But the State has already spent exorbitant sums of money, and will have to spend additional sums, trying to resolve the matter at the International Chamber of Commerce. Nandlall disclosed that about US$150,000 were spent already in legal fees.
What also complicates the resolution of the matter, according to Nandlall, is that it would be difficult to enforce any arbitration award against a government. He explained that this is unlike any judgement made against a private company since that company would have assets that can be seized.
“Why there is a great temptation to settle, though we may have to write off the interest, is that we may have to spend hundreds of thousands of dollars and win we may… even after winning, we may have great difficulty in receiving payment from the government,” the Attorney General said.
