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Jagdeo dodges responsibility for failed US$200M Skeldon factory
As sugar continues to perform badly, former President Bharrat Jagdeo, yesterday refused to take blame for the troubled Chinese-built Skeldon factory in Corentyne, Berbice.
Don’t blame me! : Former President, Bharrat Jagdeo
Breaking a more than three year silence on the US$200M Skeldon modernization project, Jagdeo during a press conference at Freedom House, his party’s headquarters on Robb Street, instead blamed the Guyana Sugar Corporation’s (GuySuCo) European customer, Tate and Lyle, for the mechanical problems that contributed to the industry’s run of poor performances.
He said that President Donald Ramotar has committed a further $20B to the sugar industry over the next five years.
Tate and Lyle had been hired as Project Manager for the construction of the factory.
They were sacked shortly after the factory was commissioned in 2009. GuySuCo last year told Parliament that it sued the UK company for US$30M.
Jagdeo, who was grilled by reporters, had promised before he ended his two terms in 2011, to personally intervene to fix the Skeldon factory and help turn the industry around.
Jagdeo’s promises may be a tad too late for sugar workers and an Opposition which has been demanding answers over GuySuCo’s spending and help from the treasury with little improvements to show for it. No one has been held accountable.
Over the last two years, the industry recorded its worst performance in over two decades.
Jagdeo at first could not recall that he had promised to intervene.
Former President Bharrat Jagdeo has blamed Europe’s Tate and Lyle for mismanagement of the Skeldon factor project.
He then admitted that he should have ‘intervened’ a bit more.
Guyana had decided to stay in sugar despite warnings of hardships. This was after the European Union announced that it was ending a decades old agreement that allowed Guyana and other regional countries to sell sugar at preferential prices.
The eventual price cuts by EU translated to 36 percent or a hefty US$40M annually for Guyana.
But Government insisted that the country stay in sugar, plunging headlong into the ambitious US$200M Skeldon modernization project. It was the largest ever project for Guyana in the 2000s.
This was despite the fact that countries like Belize, Barbados, St Kitts and Trinidad and Tobago had abandoned sugar. Jamaica had scaled back.
Skeldon never kicked off as expected. With several defects and attempted fixes, the factory last year was the worst performing and the most inefficient in terms of the amount of cane it took to produce sugar.
Jagdeo said that as President of Guyana, he did attempt to fix some of the major problems including the punt dumpers, which take the cane from the waterways to the factory.
Some of the fixes attempted by Jagdeo included the holding of meetings with parties involved and others to find solutions.
“We have to fix some of them because the factory is not running the way it should run.
It has potential to do much more.”
He also admitted that the industry’s cost of production is still too high. He believed that GuySuCo’s main problems are markets and the price for sugar.
Getting out of sugar is not an option for Guyana as Berbice depends heavily on the industry, he said. Those that are affected include not only sugar workers but shopkeepers, taxi drivers and others.
With a labour shortage problem, GuySuCo’s answers to its production woes lie in mechanization of its harvesting, new varieties and improving efficiency.
Guyana will also have to go the way of building a distillery and sugar refinery in order to bring more value to GuySuCo, Jagdeo believes.
The former President, in rooting for more monies to be plugged into the industry, drew comparison to the billions of dollars of electricity subsidies to bauxite communities. He would be referring to Linden, which is receiving subsidized power from Bosai.
He said that sugar is a big contributor to the economy; a significant source of foreign currency earnings and for jobs…not something that can be easily dissolved in teacups.
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