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Multi-Billion loan for sugar estates… A crazy idea with no returns for tax payers – accounting experts
Chartered accountant, Christopher Ram
The government’s plan to borrow up to $15B to restart the Skeldon and Enmore Sugar Estates has been condemned by accounting experts as a crazy idea that benefits only private investors with no returns for taxpayers.
Chartered accountant, Christopher Ram, is one of the accounting experts who have since questioned the decision by Government as one that bears striking similarities to the privatisation of the Sanata complex.
In that deal, some $5 million was invested into the complex by the People’s Progressive Party administration. The complex was then sold to Dr. Ranjisingh ‘Bobby’ Ramroop, a friend of former president Bharrat Jagdeo, through the National Industrial and Commercial Investments Limited (NICIL).
In the case of the estates, the Coalition Administration has established a Special Purpose Unit (SPU) under NICIL to facilitate the privatisation of the assets of the Guyana Sugar Corporation (GuySuCo).
On Wednesday, Finance Minister, Winston Jordan, shared with reporters that Government plans to borrow $10 to $15B dollar to fund the restart of operations at Enmore and Skeldon Estates.
“What are these people doing? Are we just throwing money away? This is surely the height of recklessness,” Ram stated.
Last month, Pricewaterhouse Coopers (PwC) commenced the process of evaluating the assets of GuySuCo. The accountant stated that PwC is evaluating a moving asset that is either falling in value or increasing.
He stated that it creates questions about the valuation of GuySuCo given the changing structure along with the monies being thrown at the company by the Government.
Commentator Ramon Gaskin noted that the government is using the loan funds to make the estates that are now being put up for sale more appealing to the purchasers.
“The whole idea is crazy,” Gaskin stated.
He drew attention to the plan by Demerara Distillers Ltd (DDL) which has placed a bid to utilise the Enmore Estate for the production of molasses.
“Government is going to spend the money to put the company in order for this company (DDL) on the backs of the taxpayers,” Gaskin warned.
Government has received more than 70 unsolicited Expressions of Interest from investors, who are interested in turning around the ailing sugar industry.
The government was intent on entering office to halt the huge cash bailouts to GuySuCo especially as there was little evidence of a turnaround in sight for the state-owned entity.
Sugar met its target in the first year of 2015 but fell the following year and in 2017, barely made it to 140,000 tonnes, one of the worst performances in years.
The new Skeldon sugar factory had continued to suck the little cash of GuySuCo and since taking office, the administration has plugged an estimated $32B to pay salaries.
In 2016 and then last year, four estates- Skeldon, Rose Hall, Enmore and Wales- were closed with the intentions to divest and privatise them. Several offers from local and overseas investors have come in.
However, the Opposition, whose support was built on the backs of sugar workers, has been joining with the unions to object to the layoffs of 4,000 workers.
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