ST. VINCENT:- Leader of the Opposition Arnhim Eustace has said that Prime Minister Dr. Ralph Gonsalves was not forthright to Parliament about the conditions of a $100 million Caribbean Development Bank (CDB) loan to the National Commercial Bank (NCB).
Eustace told supporters of his New Democratic Party (NDP) in Petit Bordel on Friday, Sept. 24, that Gonsalves did not tell Parliament that the NCB has to be sold before the government could access the funds.
Gonsalves, who is also Minister of Finance, told Parliament in August that he had “given instructions for another opening for possible divestment of the majority of shares [at the NCB]”.
He said this was the basis of his administration’s application for an EC$100 million loan from the CDB. (Go to the homepage to subscribe to I Witness-News)
The loan, which was approved in July, is to the Government of St. Vincent and the Grenadines (SVG) and will be used to reduce the outstanding public sector debt at the NCB, and to facilitate a restructuring of that institution, the CDB said.
The public sector debt at the NCB is $160 million at between 9 per cent and 11 per cent interest, while the CDB loan attracts a 4.5 per cent interest rate.
“If the strategy is too sophisticated for the opposition, too farseeing for some commentators who don’t understand basic things, then I am sorry,” Gonsalves had told legislators in August.
But Eustace said on Friday that he was informed that the NCB had to be sold before the government could access any of the $100 million loan.
“Only yesterday I [found] out that Gonsalves [left] out one of the most important conditions that the government has to meet. And you know what that condition is? That before they get one cent … of the $100 million, they have to sign the agreement with the people who are buying the bank,” Eustace said.
“So all the talk you hear now about they get $100 million, they ain’t get it yet you know. They have to finish the negotiation with the St. Lucia bank and sign the agreement to sell the bank before one cent of that money goes into the bank to pay off those loans,” the former Minister of Finance said.
“So, in the meantime, the bank continued to deteriorate. The negotiations are going on now with the St. Lucia bank and I expect that some time in the not too distant future, that agreement will be signed. And, when that agreement is signed, the NDP (New Democratic Party) can’t do anything about that,” Eustace added.
He said private owners of the NBC will offer less flexible overdraft provisions to the government and state agencies.
“The bank would be then privately owned. It would be just like … all the other banks that we have here. … There will be no difference from those banks. The government will have no control over that bank,” Eustace said.
Eustace said he was informed that the NCB, whose profits fell from EC$15 million to EC$1 million last year, had lost EC$15 million so far this year.
“So when Gonsalves’ people talk about he is a hero, they get a $100 million, they [are] talking a lot of foolishness,” Eustace said.
He said that Gonsalves’ Unity Labour Party (ULP) administration had mismanaged the bank, hence the need for the $100 million loan.
“That one item is enough for Gonsalves and the ULP to go. They are costing you and additionally $100 million, which you didn’t have to pay; which your children and grandchildren will have to pay,” Eustace said.