GuySuCo is about to repeat a disaster it once endured

Dec 28, 2015 Letters

Dear Editor,
I note with interest and some bit of hilarity the release from the Government and GuySuCo that one of the novelties coming out of the recent Commission of Inquiry into the financially embattled sugar industry is the merging of some estates.
One of the mergers cited is Wales and Uitvlugt estates. Editor, it’s most disappointing that a commission that cost the taxpayers of this country almost $80M is recommending a merger of the Wales and Uitvlugt estates. It’s simply a case of “re-inventing the wheel”. I would like to remind several members of the said commission who were involved quite intimately in the mergers of LBI and Enmore (in 1997 called East Demerara Estate), Albion and Rose (in 1999 called East Berbice Estate) and Wales and Uitvlugt (in 1999 called West Demerara Estate) of this fact..
With the exception of the East Demerara Estate (EDE), the mergers for the others disintegrated in less than 2 years and reverted to their original existence. Even the EDE failed, because the LBI factory was forced to close its operation 2 years ago, resulting in the displacement of at least 200 workers. The concept was simply bad.
These mergers failed miserably because the anticipated cost savings from the economies of scale failed to materialize. For there to be a substantial benefit in any merger through the economies of scale, there must exist an infrastructure that guarantees a free and cheap movement of canes between any 2 merged estates and significant cost-savings from administrative overheads. The cheapest mode of transport is water and cane punts.
This infrastructure is non-existent at Wales and Uitvlugt. 480,000 tonnes of canes per year is a conservative estimate of the amount of canes that have to be moved by road transport from Wales to Uitvlugt, and which will take 80,000 trips, using the normal cane carts that are being used by the farmers. It’s unimaginable to visualize the traffic hazards and accidents, environmental problems from huge amount canes being spilled on the roads and cattle flocking the roadways to feast on the spilled canes, and above all the huge costs to do so.
Various cost simulations and cost reduction strategies were developed at the West Demerara Estate, but they failed to provide a viable way forward; simply because there were huge unavoidable operating and overhead expenses. It was then decided to have these estates reverted to their original existence, after 2 years of trails and errors; and not to mention the massive movement of executive and lower level staff. The East Berbice Estate estates were also dismantled after 2 years of merged existence.
The entity was found to be too large to manage by a group of senior management, who resided, and whose offices were located at Albion. Their prolonged absence and/or short visits to Rose Hall resulted in the estate suffering immensely from neglect both in services and operational interventions. The company simply could not afford an estate as large as Rose Hall to suffer from managerial neglect, and so the merger was dismantled.
These mergers resulted in the creation of many ad hoc job titles such as General Managers, Crop Production Managers, Farm Managers, Harvesting Managers and a host of others, which over the years were forced to become obsolete, but not before the job holders walked away with some superlative pay and benefits. As a nation, are we going to walk this route again?
These mergers have demonstrated that they were all absolute failures. I am sure the company has tons of data to illustrate the massive overruns on costs on these merged estates. Further, there must be the willingness and support of workers in accepting that they are working in one single consolidated estate, rather than hugging steadfastly to the costly customs and practices that prevail over their host estates. This has been the case when the mergers were done initially, and it proved to be one of the biggest hindrances towards a successful merger.
I note from the government that there will be widespread consultations with the opposition party and trade unions. I trust that those who will be engaged in these consultations request from the company full information on those mergers and seek the appropriate answers before making an informed decision, lest they all in time to come be accused of supporting a concept that proved to have been a failure.
Rajendra Parmanand

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