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Skeldon Sugar Factory problems… Guyana examining legal options against contracting company

Sep 18, 2008 News

Guyana is examining legal options and remedies that can be enforced against the China National Technology Import and Export Corporation (CNTIC).
CNTIC is the company contracted to build the Skeldon Sugar Factory.
Speaking with Kaieteur News yesterday, Minister of Agriculture, Robert Persaud said that fines can be imposed under the contract signed between Guyana and CNTIC.
These, he said, can exceed US$5M. However, the matter is still under legal and other review.
A decision to act, Persaud added, has not been made since the issue has not reached the point where Guyana will impose a fine.
Persaud told this newspaper that the aim is to get CNTIC to mobilize all the technical experts to bring the factory to a point of successful commission and full operation.
Discussion has been taking place at different levels, he said, to ensure that the contracting company, which is Chinese state own, complies.
Minister Persaud pointed out that the report that the Associated Press (AP) published yesterday is not accurate. Guyana has not taken any action but is instead contemplating possible remedies, he said.
Yesterday, that AP reported that ‘Persaud said Wednesday he will impose at least a $5 million fine against the state-owned China National Technical Import and Export Corporation.’
The Minister said that he is insisting that the President or Vice of CNTIC as well as a team of technical officials be in Guyana until the technical difficulties being encountered are fixed.
The Agriculture Minister said that CNTIC has assured Guyana Sugar Corporation (GuySuCo) that it will be able to solve the technical problems in a timely manner as these types of difficulties do occur during the testing period.
On Monday, Chief Executive Officer of GuySuCo, Nick Jackson, told the local media that the problems being experienced at the Skeldon Sugar Factory have been blown out of proportion.
While there are indeed some difficulties being experienced at the factory, Jackson said the present hiccups are not unusual for a factory of its calibre.
Explaining the problems being experienced at the new factory, at a press briefing, Andrew Jin, Site Representative of CNTIC said that the trial run showed that there are some problems between the punt dumper and the conveyer belt, while at the same time difficulties have been encountered with shredder bearings.
At the same time, ‘choking’ has occurred when fresh water is pumped to the diffuser.
This same problem has reoccurred at the second evaporators and third evaporators.
Presently, he said, an assessment of those problems is being undertaken as remedies to rectify these are being sought.
The company’s CEO also stated that while the problems being experienced might appear to the layman as a ‘big disaster’, it is not a ‘big disaster.’
Other factories, he said, have experienced the same kinds of problems.
Following the handover of the factory, there are three further 72 hour tests, which can be carried out by the owner during the next year. 
During that period, the contractor is still responsible for defects arising from those tests despite the fact that the factory would be in commercial use.
The new factory is expected to produce 110,000 tons of sugar a year. (Tusika Martin)

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