Grand opportunity for massive corruption – AFC

Aug 25, 2011 News

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Foreign management for Skeldon factory…

A proposal to hire either a Chinese or Indian firm to manage the multi-million-dollar Skeldon Sugar Factory may be a grand opportunity for massive corruption, the Alliance For Change (AFC) says. The political party also called for any decisions to hire overseas management to wait until after elections.
The factory, representing the largest single capital project by government to date, has not been performing to par and still has a number of defects to be rectified by the contractor, China National Technical Import and Export Corporation (CNTIC).
Last week, the government admitted that the Guyana Sugar Corporation (GuySuCo) does not have the management expertise to run the factory and is seriously looking at hiring either a foreign company, Chinese or Indian, to manage the estate.
Minister of Agriculture Robert Persaud said that the success of the sugar industry rides on the success of the Skeldon factory, which was commissioned two years ago at a cost of US$181M.
But the AFC, during its weekly press conference, lashed out at the handling of the Skeldon factory and its woes.

FAILURE
The AFC felt that Minister Persaud’s announcement to seek either a Chinese or Indian management team is a clear acknowledgement that the factory investment is a failure.
“This investment amounted to about US$200M in an economy with an annual GDP of about US$1.2 billion. As a percent of GDP this investment amounts to about 17% of GDP. This makes it the largest single investment failure since Guyana’s independence in 1966. Even the PNC did not accomplish a failure this gigantic,” Ramjattan noted in a prepared statement.
“The PPP government is hustling to exonerate itself from blame, fixing same on a hapless GuySuCo board and management. Guyanese must not be fooled by this false claim. The entire lot should bow out in shame if they have any sense of honour and decency.”
Listing the failures, as he called them, Ramjattan pointed to the “mis-advised” grant of the contract for construction to the Chinese firm, CNTIC, which had no experience in sugar factory building.
The other failings included the acceptance of the factory as complete before the Chinese firm had proven to GuySuCo that it was fully complete and operational; the non-training of locals to operate the factory after the Chinese would have left and the “stifling political interference” which resulted in experienced, qualified and senior staff including agro-engineers and agronomists, being forced out and replaced by friends and supporters of the government.
The problems also included the ill-preparedness in not expanding cane cultivation to feed the factory and the disrespect for sugar workers which has resulted in massive migration away from work in the estate.

MORE WOES
“To solve this problem the PPP Government, fully backed by its Presidential Candidate, Donald Ramotar, a director on the board for some 19 years, plans to enter another management contract with either an Indian or Chinese company. Minister Persaud is quoted as saying that the government was currently evaluating two proposals to manage the said factory.”
According to the AFC official, the party viewed this development as a grand opportunity for massive corruption.
“There is no record that any management contract was ever put to a public tender. Moreover, the AFC is aware that taxpayers’ dollars of nearly US$2.5M would have to be paid to the contract manager per annum!”
The AFC claimed that it has come by “reliable information” that the Chinese company identified is CNTIC, the same company that built “the third rate, very high cost Skeldon factory, where the exploded boiler has not yet been properly fixed, the new cane dumper cannot function, and numerous other problems caused by poor quality components are being experienced every day.” AFC said that it has information that CNTIC, “the maker of the defect-riddled 8400 tons cane per day grinding capacity factory, which has not yet achieved even half that amount for one day”, is being evaluated as a potential contract manager.
Also, the Indian company being evaluated is Surendra Engineering which has the contract for the US$10M Enmore Demerara Gold sugar packaging plant, a section of which recently exploded and killed a worker. That specific equipment has not yet been fixed and, in addition, the massive internal work on the factory upgrade to supply the bagging plant has not yet been completed. GuySuCo’s technical managers have refused to accept this work despite political pressure to do so.”

FAVOURED
The AFC also lashed out at a recent contract award to Surendra Engineering, which it says is obviously specially favoured, for eight drainage pumps, despite the fact that the company does not make pumps at all.
“Surendra Engineering through another Dubai-based front Company, Salim al Midah, was given the consultancy contract valued approximately US$500,000 to provide the plan to upgrade Enmore and Blairmont factories. There is every indication of an unholy alliance between Surendra Engineering and key GuySuCo managers, directors, and politicos to huff all of GuySuCo’s engineering projects including the one now to manage Skeldon, a task Surendra Engineering, like CNTIC, is incapable of doing, both not having the history, experience and managerial capacity in running sugar factories.”
AFC also said it is aware of experienced and well-known Indian and Brazilian consortiums which ought to be invited to give proposals to manage the Skeldon Factory and possibly to procure finances from their respective governments to assist in doing so.
“The AFC has crafted an alternative vision for GuySuCo that will assure simultaneous accounting and social profits for the people. We propose, for starters, a professional board with no political interference; the incremental mechanization of the industry to avoid the almost slave-labour conditions workers have to experience and creating a captive market through our E10 framework in order to save the Demerara and West Berbice Estates, by the production of ethanol. Then we intend to seek foreign investments into developing alternative lands for ethanol production for export.”
The AFC made it clear that the party when in government will not be fettered by the contractual terms of any management agreement entered into by the PPP/C Government and either CNTIC or Surendra Engineering.
“A management contract ought not be entered into now but ought to await until after the elections.”
Questioned about the proposals to hire a management team, Ramjattan said the party believes that the government will attempt to pass it through Parliament before it there is a dissolution for elections.
He also believed that the defects of the factory should be fixed by CNTIC before any proposals to manage it is even considered.

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