National Budget 2013 debates... APNU calls GuySuCo, GPL ‘black holes’

National Budget 2013 debates… APNU calls GuySuCo, GPL ‘black holes’

Apr 03, 2013 News

A Partnership for National Unity (APNU) has rejected budgetary allocations for the Guyana Sugar Corporation (GuySuCo) and Guyana Power and Light (GPL) deeming them ‘black holes’. The Party believes that both entities need institutional restructuring before any funds are channelled into them.
Presenting this stance were APNU Members of Parliament Carl Greenidge and Keith Scott yesterday during the Budget debates in the National Assembly.
According to Greenidge, the volume of debt incurred by Government over the last 10 years exceeds the Cheddi Jagan and Forbes Burnham governments. He contended that when the debt is spent on activities such as the Skeldon Sugar Factory – that may take years to realise its potential – taxpayers have a great burden to bear.
The troubled $200M Skeldon Sugar Factory is part of GuySuCo’s many challenges. Ironically, the factory was built as part of the company’s turnaround plan. Greenidge said that that plan did not work and now Government wants $1B to drive another meaningful arrangement.
He said, “No-one in their right mind views the GuySuCo figures as realistic. The reason is simple, the problems bedevilling the industry have been obvious for quite awhile and the Opposition Parties have been calling on the Government to take relevant measures of an operational and policy nature to address the problems of the industry”.
Like GuySuCo, the state’s energy company has been experiencing its share of challenges with Government pumping resources into it. This year, Government wants to give GPL $11.2B, a vast increase from last year’s $6B.
Greenidge stated that these two entities are like black holes that Government continues to pour resources into. “They need institutional reform, organizational change and de-politicization.”
According to Scott, GuySuCo’s initial turnaround plan has spun out of control. He said last year Government gave $4B to GuySuCo and announced an ambitious target which had to be revised. Scott stressed that there needs to be full accountability of the monies being put into the sugar company.
Like Greenidge, Scott believes that both companies need restructuring before any monies should be given.
Defending Government’s pouring of resources into GuySuCo; Housing Minister Irfaan Ali argued that the industry provides jobs for 18,000 persons which essentially translates to 24,000 households. In addition, the sugar company earns in excess of US$100M of foreign currency.
He stressed that the $1B transfer would assist GuySuCo implement its transformation plans. Ali is confident that the outlook for the industry remains positive given its comparative advantage within CARICOM and the extension of the European Union Support.
He stressed that Government will not turn its back on the sugar industry.
According to Ali, the $5.8B transfer to GPL is to assist with the company’s cash flow requirements. Meanwhile, $5.4B will be used to support key projects such as the upgrade of the transmission and distribution networks, loss reduction programme and other activities.
He stressed that the $5.4B injection will also reduce the need for future increases in tariff since it may serve to reduce line losses. The capital injection would also reduce line losses by 2.2 percent and translate into savings amounting to $596.2M annually.

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