Friday, 01 June 2012 02:30
By Ian Magic Hughes
Antigua St John's - Member of Parliament for St. Mary’s North Molwyn Joseph has accused Minister of Finance Harold Lovell of lying to the nation.
Joseph was responding to Lovell’s explanation of the government’s right to borrow over US$52 million for the controversial Wadadli Power Plant and sub-station.
In tabling the loan agreement in parliament on Wednesday, Lovell said that it was important for government to inform the House that it was “very pleased” to be in a position to present the loan agreement.
The finance minister pointed out that contrary to what has been said in some circles, “we (government) are doing it as a matter of good governance.”
Joseph had accused Lovell and the government of breaching the rules governing the contracting of loans.
Lovell referred to the Antigua and Barbuda Development Loan Act of 2002 which, according to him, allows the finance ministry to borrow up to US$120M for the purpose of financing development projects in the country.
The minister indicated that the act has been used since its passage in 2002 by the previous administration, and accordingly the United Progressive Party (UPP) is relying on it as an Act of the House that remains in force.
He further highlighted a similar Act - The Antigua & Barbuda (Development Loan) Act 2002 - which he said was passed in 1986 and renewed in 2002 by the Antigua Labour Party (ALP).The Antigua & Barbuda (Development Loan) Act No.7 of 2002 is defined as:
“An Act to authorize the Minister of Finance to borrow the sums of moneys not exceeding an aggregate sum of One Hundred and Twenty Million Dollars in United States Currency or of the equivalent in other currencies for the purpose of financing development projects in Antigua and Barbuda, debt service charges and matters incidental thereto.”
The Member of Parliament for St. Mary’s North however countered that Lovell is trying to confuse the issue. He believes that Lovell is deliberately attempting to mislead the people of Antigua & Barbuda.
“I have no problem with Lovell’s assertions that the government has the right to borrow monies,” he said.
“What Lovell is not telling the people is that he must get authority from parliament in order to borrow monies for all capital projects.
“In addition,” said Joseph, “the US$120 million is a limit that the government can borrow in any calendar year and not the amount needed to come to parliament.
“How can you have a country where a minister of finance would claim and accept that he has to come to parliament yearly (via the budget debate) to spend government revenue and at the same time he does not have to come to parliament for authorization to borrow unless its 322 million EC dollars (US120 million)?
“It’s absurd for Lovell to think that he could borrow all that money and never bring it before parliament.”
Joseph said that the Finance Administration Act 2006 (number 23 of 2006) passed by the government supports his (Joseph’s) claims.Part VIII Public Debt and Guarantees states:
“47. No money shall be raised on the credit of the government except under the authority of an Act of Parliament or of a resolution of the House.”The said act (Finance Administration Act 2006) further states:
“54. No guarantee of a financial liability shall be given by the government unless it is –
(a) given in accordance with the provisions of an Act authorizing the guarantee; or
(b) authorized by resolution of the House within ninety days.”
“We are four years after the fact,” said Joseph, “and it’s now that the government is bringing this agreement to parliament.
“This is a clear breach of the laws of Antigua & Barbuda.”
The MP went on to say that after reading the loan agreement he noted that the Exim Bank of China made sure there was a clause to protect its own interests.He pointed to Article 5.2 of the loan agreement, which indicates:
“All authorizations acts and procedures necessary for the signing and performance of this agreement have been completed and are in full force and effect.”Article 5.3 states:
“The borrower has completed all the acts and procedures as required by the laws of the borrower’s country in order for this agreement to constitute valid and legally binding obligation of the borrower in accordance with its terms including obtaining all the approvals and authorizations from relevant authorities of the borrower’s country and respecting all the registrations or filings as required by the laws of the borrower’s country and such approval, authorization, registration and filings are in full force and effect.”
“The (above) articles tell me that the Chinese protected themselves but this government did not do the same thing,” the MP alleges.
Lovell disagreed with Joseph’s characterization that the government acted illegally in acquiring the loan.
“We are under no legal obligation (to present these documents),” Lovell said in parliament, “but we will accept that in the interest of transparency and accountability it (the documents) is here …
“This matter ought not to be controversial anymore.
“We are moving forward in the interest of transparency and good governance.”
Joseph countered: “That’s not true and he knows that.
“He (Lovell) is attempting to justify the government’s failure to bring to parliament over EC$1.5 billion of borrowing within their eight years in office.
“The loan from Venezuela of US fifty million dollars (EC$135 million) never came to parliament. This power plant loan - another US fifty-two million dollars (EC$139.4 million) - after about four years is just coming to parliament, and the US 47 million dollars (EC$126.9 million) for the airport terminal and another US 40 million dollars (EC$$108 million) for the airport runway never made it before parliament.”
“Lovell knows that that could never be deemed as acceptable behavior by any government, and the people of Antigua & Barbuda must know the truth.
“The government needs to tell us how they spent the US$52 million for the power plant and all other monies borrowed: but so far they have not done that.”