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NICIL, GPL owe GuySuCo US$11M
Winston Brassington
The cash strapped Guyana Sugar Corporation (GuySuCo) is still to receive some US$11M from the National Industrial and Commercial Investments Limited (NICIL), the balance owed for the purchase of its electricity generation facilities.
The confirmation was made yesterday by NICIL’s Communication Manager, Julianna Hutson, in response to an article which pointed out that the sugar company was still owed monies.
Skeldon Energy Inc (SEI) is another of the Special Purpose Companies created by Winston Brassington, the Executive Director of NICIL, who had also served as Chairman of the Board of Directors of the Guyana Power and Light.
Last April, Brassington had publicly announced that SEI acquired the installed generation facilities then owned by GuySuCo at a cost of US$30M.
Hutson said yesterday, in the wake of a report by GuySuCo Chairman, Professor Clive Thomas, that the sugar company was still owed a large sum of money, sought to clear the air and pointed out that the transaction is yet to be completed.
Hutson by way of a public missive confirmed that “to date, SEI has paid GuySuCo US$19M from NICIL (US$5M) and GPL (US$14M).”
She added that “the remaining purchase price is payable on the transfer of assets and finalization of all contracts including third party financing.”
According to SEI, “Third party financing was intended to be procured following negotiations with commercial financial institutions.”
Last April, SEI and Wartsila executed two contracts – one for the Rehabilitation of the Wartsila generation assets to restore the equipment to its optimal functionality, and secondly an operations and maintenance contract for the entire power plant operations.
SEI yesterday stated that since entering into those contracts, Wartsila has commenced its rehabilitation of the generation assets which is expected to be completed by year-end.
“Operationally, Wartsila has also been managing and operating the co-generation plant per agreement,”
According to Hutson, GPL, on behalf of SEI from last April, has also provided fuel and facilitated payments to Wartsila in relation to the Operations and Maintenance charges, Rehabilitation costs and other expenses totaling US$4.5M as at August 2015.
This, she said, will be partially offset by the value of electricity supplied to GPL and seeks to ensure the efficient operation of the Skeldon Power Plant.
SEI has since stated that should the transaction be reversed, reimbursement will become due of the US$19M to NICIL and GPL plus all rehabilitation, operations and maintenance costs, and any other additional financial support received from GPL net of the value of electricity received.
GPL has, in recent years, been the recipient of billions of dollars in transfers from Central Government; but, in securing a windfall from the drop in fuel prices, the power company decided to shell over a total of US$15M to acquire the facilities—a transaction many had condemned as a masked bailout for the ailing sugar company.
As part of the US$30M transaction, SEI acquired three Wartsila generation plants at an installed capacity of 10MW, in addition to a bagasse-using cogeneration plant with an installed capacity of 30MW.
GuySuCo’s then Chief Executive Officer (CEO) Raj Singh, at the time had told media operatives the US$30M, “is clearly going to our creditors, our suppliers, our contractors, companies and entities that we owe monies to; and we have begun payment already to those creditors.”
What GuySuCo is also looking to do with the US$30M, according to Singh, “is to rebuild confidence in our creditors so that we can continue to have business relationships with them that would serve both of us well. We are working hard to do that!”
Professor Thomas has since revealed that the power company is some $82B in debt, and was exploring ways of commercializing aspects of its operations such as Drainage and Irrigation works undertaken along the coast.
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