SPU proposes re-opening sugar estates

Feb 10, 2018 News

Government appears to be seriously considering reopening the closed sugar estates.

The Enmore sugar factory.

On Thursday, Minister of State, Joseph Harmon, disclosed that the Special Purposes Unit (SPU) which was established to examine the assets of the four estates which were under the Guyana Sugar Corporation (GuySuCo) is pushing for the factories to be operating as it made more economic sense.
“In their view, it makes better sense to have these entities running while investors have an opportunity to look at them. The sense we got from looking at the expressions of interest was that the companies who want to come here wanted to keep these estates in sugar cane,” Minister Harmon told reporters.
At the last announcement, it was said that more than 70 expressions of interests have been submitted for the estates.
The SPU is tasked with examining and articulating the way forward with respect to the divestment of the Skeldon, Rose Hall, Enmore and Wales estates.
Finance Minister, Winston Jordan, in his 2018 National Budget presentation said with respect to the remaining estates, the SPU will also work to reconfigure operations to guarantee economic viability.
The Minister had noted that “our taxpayers must no longer be burdened to carry the weight of an unprofitable, inefficient, and antiquated public corporation. The government allocated $6.3 billion, in 2018, to support the reduced operations of GuySuCo”.
The four estates with almost 5,000 workers were closed as the industry contracted even more, demanding almost $32B in cash bailouts in the last three years.
The Coalition Government insisted that the plans to the close the estates were recommended by GuySuCo a number of years now.
However, the current cash situation of GuySuCo producing at three times what it is selling sugar for, has been a major drain on the country’s treasury.
Last month, more than $2B was in severance was paid to sugar workers made redundant. A number of them will be paid the rest of the severance in the second half of the year.
In addition, Minister Harmon disclosed that the discussions on the future of the sugar industry continued at the last meeting of the Cabinet on Tuesday.
The Cabinet was provided with an update by Minister of Agriculture, Noel Holder, who informed that severance payments commenced on January 29, 2018, and concluded as planned on January 31, 2018.
The payments, the Minister noted, were made efficiently and with no major incidents at the Skeldon, Rose Hall, Wales, and Enmore estates.
Meanwhile, the Guyana Agricultural and General Workers Union (GAWU) yesterday claimed that the industry appeared to be in even deeper trouble.
There is very little cane in the ground.
GAWU, the largest sugar worker union, disclosed that it has learnt that GuySuCo has revised downwards its 2018 sugar production target.
“This information is more so of concern considering that as yet not one stalk of cane has been harvested for 2018. From the corporation’s First Crop 2018 Weekly Production Incentive memorandum dated January 29, 2018, the GuySuCo, it was stated, was expected to produce 103,002 tonnes sugar this year.
“It must be noted that Minister of Finance, Winston Jordan, in his 2018 Budget address announced that the GuySuCo would produce 115,447 tonnes. In effect, in a matter of weeks, and we reiterate without a stalk of cane being harvested, the Corporation had already reduced its target by nearly 11 per cent.”
GAWU said that this announcement is not comforting and reminds of what took place in 2017 when the production target was reduced on several occasions and the industry ultimately produced a little over 137,000 tonnes sugar, the worst production since 1990.
“The fact that reductions are already taking place causes us naturally to wonder what is really taking place in GuySuCo especially when a number of executives, experts, advisors, etc have been taken on in recent times, and who, reportedly are still on the job despite four estates being closed.”
GAWU said that the decision-makers have said that the closure of the estates will return profitability to the company, but from the way it is being managed that “profitability” is nothing but a pipe dream.

1 thoughts on “SPU proposes re-opening sugar estates”

ChosenNChrist February 10, 2018 at 2:36 am

How did they really plan to carry out their mandate? Didn’t they foresee that it would be better to assess an open rather than a closed estate? They were supposed to focus on diversification and privatilization? They should do just that. Give the private sector a chance, and use the monies they receive to complete infrastructural works. Recht Door Zee, particularly the penultimate street of phase 2, needs it.