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Skeldon Sugar Modernisation Project… The problems will be dealt with – Dr. Luncheon

Sep 27, 2008 News

Head of the Presidential Secretariat, Dr. Roger Luncheon, has said that he has no doubt in his mind that the current problems being experienced at the new Skeldon factory will be resolved.
At his post-cabinet media briefing held on Thursday, Dr. Luncheon noted that Guyana is dealing with a very reputable firm, which is in charge of the construction of the factory. 
“These are short-term unexpected consequences. We are dealing with a reputable firm. This is not a fly-by-night contractor. This is a highly reputable firm that has been involved in doing hundreds of millions and billions of dollars’ worth of business annually,” he said.  He explained that there is nothing indicating that the administration is dealing with some sort of untoward consequence that is beyond correction. 
While acknowledging that Guyana will suffer as a result of the delayed completion, Dr Luncheon noted that the country will not suffer alone, as the contractor will also have to face the consequences.
“Because the convention in contracts of this magnitude sees clauses, penalties being inserted just to keep your nose to the grind stone and your shoulders to the wheel, and so, yes, crops may very well not be reaped to the fullest extent as envisioned, and if crops are not going to be reaped then the production of sugar would also fall, and then our contractual obligation, both domestically and externally, may very well be affected,” Dr. Luncheon said.
He noted that he is not certain about the specific format of penalties that will be instituted, but he explained that it would not be unreasonable to put a penalty in one way or the other, which would match the enormity of the problem.
“So, if one were to reduce it to monetary terms, I want to believe that there is some relationship between ‘X’ dollars that we lose as a consequence of this shortfall being remedied by ‘X’ dollars being levied on the offending company.”
Earlier in the week, Chief Executive Officer of GuySuCo, Nick Jackson, had 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 US$5M.
Jackson said that if the penalty was to be instituted, it would only run for 36 days, and then there would be no other recourse were the contractor still to delay.
Agriculture Minister 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.

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