Vice President Dr. Bharrat Jagdeo
Moreover, it is the view of some local companies that ExxonMobil should be committed to supporting local content in actuality instead of having the mistaken belief that the inclusion of a “local content” clause in its contracts is sufficient without meaningful action.
When engaged by the News Room, Vice President Dr Bharrat Jagdeo said that this extended payment period is a concern he shared for years even when he was the Leader of the Opposition.
Importantly, however, Dr Jagdeo said that the forthcoming Local Content legislation will provide a crucial carve-out for local companies.
“… for companies that are defined as local companies, they have to have a payment system more suited to the scale of these companies and their specificities. That means a shorter period for extending credit to the oil companies,” the Vice President told the News Room on Wednesday.
President of the GCCI, Timothy TuckerMeanwhile, President of the Georgetown Chamber of Commerce and Industry (GCCI) Timothy Tucker in an invited comment said that with the oil and gas industry being capital-intensive and local companies having limited amounts of finances, companies will struggle to “keep up” or be potentially forced out of business.
This situation is exacerbated by borrowing arrangements. Tucker explained that while the local companies wait on these payments, they also have to consider the interest accumulating on loans they might have taken to supply those goods and services in the first place.
“We now have to wait 60 to 90 days at those high-interest rates… and you have to compete with foreign companies coming with equipment and funding at a much lower rate (of interest),” Tucker explained.
