GuySuCo gets $2B bailout in house lots deal

Sep 22, 2017 News

Government is making progress to acquire critical lands in the high-demand Region Four for house lots.
This week, the administration moved closer by pinpointing sugar lands on East Coast Demerara, These lands are the property belonging to the Guyana Sugar Corporation (GuySuCo).
The opportunity arose after the cash-strapped sugar corporation appealed to Government for a bailout of $2B.
GuySuCo is facing a dismal year projected just over 170,000 tonnes of sugar, less than what was produced last year. More than likely, it will barely reach 150,000 tonnes according to industry officials.
Its new factory at Skeldon, East Berbice, did not grind the first crop compounding the low production situation.
The corporation ran out of cash this month to pay workers. It turned to Government.
On Monday, a meeting was held between GuySuCo; Prime Minister, Moses Nagamootoo; Minister of Agriculture, Noel Holder; Chairman of the Board of Directors, Prof. Clive Thomas; and Chief Executive Officer (CEO) of GuySuCo, Errol Hanoman; to discuss urgent cash flow relative to wages, salaries and other payments at the sugar corporation.
It was agreed that the matter will be treated with urgency, given that employees are awaiting their remuneration.
However, Government is reluctant to just plug billions of dollars into GuySuCo at a drop of the hat.
Already for the year, the corporation was allocated at least $9B (US$45M).
The $2B that Cabinet has agreed to give GuySuCo will last the corporation about four to six weeks to pay workers and cover other emergency expenses.
During his weekly post-Cabinet press briefing, Minister Joseph Harmon yesterday explained that Cabinet was briefed on the financial situation at GuySuCo, by Minister within the Ministry of Finance, Jaipaul Sharma. Sharma was at that time performing the duties of Finance Minister, Winston Jordan, who was out of the country.
According to Minister Harmon, after considering the report, Cabinet authorised Minister Sharma to assist the management of GuySuCo, with their ongoing discussions with the Central Housing Housing and Planning Authority (CH&PA).
It is envisaged that CH&PA will handle the sale and acquire the land. While GuySuCo will collect the $2B, the transfer of the lands to CH&PA will take some time.
The $2B is being seen by the administration as an advance for lands.
Government, according to officials, would want first bite on lands that GuySuCo has that it may be looking to divest.
There are about $50B in lands that GuySuCo would be looking to sell to fund its restructuring.
The sale of land is part of the sugar corporation’s diversification process. Minister Harmon explained that: “What will happen is that these lands will now come under the CH&PA and will be available to the Guyanese public.”
Harmon further noted that while GuySuCo requires more funds, this is an emergency intervention to cover some of the immediate expenses.
The transaction between the Government and GuySuCo was expected to be finalised yesterday.
Annually, for the last several years, consecutive Governments have been bailing the industry out to the tune of billions of dollars.

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