Breaches result in annual $800M loss

Mar 16, 2010 News

… GuySuCo fires procurement boss

By Leonard Gildarie
The Guyana Sugar Corporation (GuySuCo) has fired the head of its procurement division following a full-fledged probe by a special sub-committee, which found serious breaches in procedures.
A senior GuySuCo official, confirming the termination of Aasrodeen Shaw, also indicated yesterday that a major shakeup is underway in the Materials Management Department.
The special sub-committee of GuySuCo, headed by former banker Keith Burrowes, found that department’s inadequacy was costing the corporation millions of dollars.
As much as $800M may have been lost annually because of contract splitting and other breaches which saw inflated prices in the purchase of supplies for GuySuCo.
Following the work of the committee, the report was said to have recommended the immediate change in a number of systems in the department and disciplinary actions against officials.
Shaw’s service was terminated with immediate effect as of yesterday and according to the senior GuySuCo official, more heads are likely to roll.
There are now more than likely to be numerous changes in the procurement system of GuySuCo, including more scrutiny of contractors.
“It is anticipated that the changes will bring about greater efficiency and about $800M in savings annually. This is all part of the ongoing efforts of the new board of GuySuCo to tidy up its operations and reduce prevalent waste in the industry.”
Yesterday, Shaw appeared before the Board of Directors at a special heading conducted by Chairman, Dr. Nanda Gopaul and other board members.
Sources indicated that he was asked to explain “the inefficient manner” in which tender documents for the purchase of 60,000 pounds of electrodes were processed.
Kaieteur News was told that Shaw’s failure to present the evaluations of said tender documents to the GuySuCo’s Head Office Tender Committee and thereafter the Central Tender Committee was an issue he was questioned on. These documents were said to have been in his possession since two months ago.
The procurement head was also accused of splitting the electrodes contract by buying smaller quantities at a higher price and at the same time failing to ask the Central Tender Committee to adjudicate on the purchase of this item.
A senior GuySuCo official yesterday said that it is as a result of these infractions that the decision was taken to summarily dismiss Shaw.
The official will have one month to leave the staff house and to hand over immediately the corporation’s car and properties.
GuySuCo had stood to lose over $4M as a result of the way the purchase was being handled, this newspaper was told yesterday.
Meanwhile, board members yesterday were also concerned about reports that the failure to procure fertilizers, steel and boots in a timely manner had resulted in frequent work stoppages.
The Chairman and Board of Directors had been meeting several times weekly to solve the issues.
Kaieteur News has been told that disciplinary actions are being contemplated against a number of procurement staff and there are likely to be transfers. Senior management officials are also under the “microscope”, GuySuCo management said yesterday.
Falling production and strikes have placed the industry in a precarious financial position.
With a new state-of-the art factory at Skeldon, GuySuCo is also contending with the challenge of finding enough cane to fill that factory’s capacity.
Last year, production fell way off target to over 200,000 tonnes. This year, in addition to a shortage of cane cutters, the harsh weather conditions have forced the entity to postpone planting as waterways dry up at an alarming rate.
There have been harsh criticisms over wanton spending and the new board has been pressed to take control of the situation.
Over the last months, GuySuCo had seen the departure of at least six top officials. This included former Chief Executive, Nick Jackson, and engineer, Henry Lung-Kit, who had been retained from previous management, Booker Tate.
Director of Agriculture Research, Dr. Harold Davis, was also sent off earlier this year by the Board of Directors.
Lung-Kit was one of the subjects of media reports in December for receiving an “exorbitant” remuneration package in excess of $2M per month.
Paul Hough, the Programme Director, overseeing the construction of the Skeldon Sugar Factory was also let go. Hough’s right hand man was also let go last year.

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