Skeldon Sugar Modernisation Project...If tests fail on Monday penalty may be implemented

Skeldon Sugar Modernisation Project…If tests fail on Monday penalty may be implemented

Sep 24, 2008 News

…negotiations for power purchase agreement not completed as yet – Jackson

Chief Executive Officer, Nick Jackson, has said that the new Skeldon Sugar Factory will be tested on Monday and if those tests were to fail then it was very likely that the contractor China National Technology Import and Export Corporation (CNTIC) will be penalised for not achieving its contractual obligations.
The damages that could be implemented are in the vicinity of $US5M.
Jackson said that if the penalty was to be instituted then it would only run for 36 days and then there would be no other recourse were the contractor still to delay.
“No contractor would want to pay damages though,” posited Jackson.
Minister of Agriculture, Robert Persaud, had previously disclosed that Guyana was currently examining all legal options available and had confirmed 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.
Jackson, during a recent press briefing, 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.
The new factory will require a minimum of 1,365 hectares for the start up of the new factory.
It will, once running at full capacity, crush some 1.2 million tonnes per year, producing more than 100,000 tonnes of sugar annually.
As it relates to the prognosis on the cost of production, the factory had downtimes waiting for cane during the crop year ranging from 10 to 40 per cent but, according to Persaud, “The factory is designed to have more capacity than the cane available on the estate as the factory was expanded by a factor of four whilst the estate was expanded by only a factor of three…This was because the estate was expanded with mechanisation as the key factor which requires dry weather. ..Therefore, when there is wet weather, the factory will stop grinding and once dry will be able to catch up…The factory is designed to operate for 25 weeks per year at full capacity.”
In its bid to ensure the supply of adequate sugar that will be demanded at the Skeldon factory, private farmers have been contracted to develop about 9000 hectares of virgin land to facilitate cultivation, which represents approximately 33 percent of the required amount of cane.
The expansions, when combined with the existing cultivating capacity of the Skeldon estate, are likely to ensure an adequate supply for the new factory.
It is expected that when the factory begins to fully operate, more than 3000 jobs will be created.

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Skeldon Sugar Modernisation Project…If tests fail on Monday penalty may be implemented

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