Privatization, overall closure among options presented to Cabinet for GuySuCo’s future

Nov 06, 2016 News

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A number of options on the way forward for the sugar industry were presented to members of Cabinet on Tuesday last.
Speaking on the discussions that occurred in this regard between Government and the team from the Guyana Sugar Corporation (GuySuCo) was Minister of State, Joseph Harmon.

Harmon said that the officials presented a number of alternatives regarding the way forward with the sector. The Minister of State declined however to reveal what those “options” were.
However, Kaieteur News was able to confirm from two Government Ministers that the options up for consideration include privatization as recommended in the Commission of Inquiry into GuySuCo and the most extreme being the closure of the sector.
According to the COI report, it was recommended that the process of privatization should start as early as practicable with an aim to be completed within a three-year period. As a consequence, the report said that the state should divest itself of all assets, activities and operations currently associated with GuySuCo.
The future of the Guyana Sugar Corporation (GuySuCo) and the need for a turnaround plan were high on Cabinet’s agenda and was a topic of discussion last week.
Harmon, during a post cabinet press briefing, told reporters that some decisions regarding the sector will have to be made by year end.
He said that this position was taken after “detailed and frank” presentations by GuySuCo officials to members of Cabinet.
Harmon said that the GuySuCo team was led by its Chairman, Dr. Clive Thomas. Also on the team were GuySuCo Chief Executive Officer Errol Hanoman, and the Chairman of the task force on diversification possibilities in GuySuCo.
Harmon said that the team briefed Cabinet on the state of the sugar industry, the challenges it faces and the options available to address the situation.
The politician recalled that after the presentation of the COI report on GuySuCo, Cabinet was briefed by the Commissioners. From that meeting, Harmon said that Cabinet outlined a five-point approach to address the issues raised by the Commission of Inquiry.
Harmon said that those points were that GuySuCo must present Cabinet with a plan which addresses the issues raised by the Commission Of Inquiry; Cabinet would give consideration to that plan; and having considered the plan, Cabinet would engage the Opposition and the National Assembly in consultations on the plan.
The approach also mandates that Cabinet would hold consultations with other stakeholders including, the workers of the corporation and the related unions.
“Therefore the presentation which was held on Tuesday was a part of that process outlined. The presentation to Cabinet gave considerations on the matters which ranged from maintaining the status quo which is just do nothing and just allow it to go as it is, to the point of a limited form of diversification,” said the Minister of State.
He added, “So there were several proposals. Of course the position that was taken by GuySuCo itself was that the worst option is to maintain the status quo since in that regard; there were serious implications for the National Treasury.
“And those implications are that it will require $18.6B in 2017 and $21.4B in 2018. That is just to maintain the status quo.”
Harmon said that this, of course, is added to GuySuCo’s current debt which is in excess of $80B.
In preparation for the next step, Harmon revealed that Cabinet appointed a subcommittee to look at the presentation made by the GuySuCo officers. He said that the team is expected to take into consideration, the points raised by the presenters and craft an approach which will mostly likely be used by the full Cabinet.
The subcommittee is expected to complete and present its report to Cabinet within two weeks. The members of the subcommittee include Minister of Agriculture, Noel Holder; Finance Minister, Winston Jordan; Natural Resources Minister, Raphael Trotman; and Minister of State, Joseph Harmon.
Minister Harmon asked to specify what “options” were presented by the GuySuCo team and if one of those included the closure of more sugar estates, said, “There are options…and we are in the process of deliberations on these options.
“It is not always good to go about it and say look these are the options and our deliberations. You would find that at the end of the deliberations, you arrive at a conclusion that is not consistent with your earlier position.
“So it is always important that we be very careful with what we announce and put out there. Any wrong step can send the wrong signal and create panic and confusion.”

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