The GuySuCo bond means nothing at this time

Sep 29, 2018 Letters

Dear Editor,
Just over a month ago I wrote a letter to the press questioning the enigmatic direction of the Guyana Sugar Corporation. I stated that the $30 billion syndicated loan was supposed to be utilized for capital injection and infrastructure maintenance and other upgrades and it was clear that this did not materialize.
I further questioned the fact that even impassable dams were not fixed to enable the starting of the second crop then queried how will the SPU make the Industry viable.
It is common sense that to be in a viable state GUYSUCO needs to achieve its target for starters and the fact that the loan was not used to facilitate this but instead being used to pay off debts shows the ineptitude and incompetence to transform GUYSUCO.
Not to mention the deceit and dishonesty involved. The purpose of the loan should have been strictly adhere to and applied accordingly. Therefore, apart from failing to invest in capital projects this action puts the lenders at a high risk since their returns may be negatively affected.
If the borrowed sums were used for the intended purposes I am sure that improvements in the productive capacity would have already been evidenced and sugar workers would have been assured of an improvement in their standard of living. Even those made redundant would have had some hope of reemployment.
The Guysuco enigma is made worse when the proposed privatization process of Skeldon, Rose Hall, Wales and Enmore Estates is kept in a state of abeyance. As long as this process is not finalized the downward slide of the economy along with the devastated lives of the 7,000 dismissed sugar workers will continue unabatedly.
It jars one’s sensibility as to why this privatization process is dragged into a frustrating snail-like pace while at the same time borrowed $30 billion to misuse and squander. At the beginning of July, it was stated by the SPU that ‘90 percent of the preliminary valuation works of several estates that have been earmarked for privatization and diversification were completed month end’.
Three months have elapsed and yet no bid was finalized. It must be borne in mind that this contract with PwC was signed since December 2017. However, I am positive that 2018 will not see the privatization process completed. It may well go far into 2019.
It should be noted that the SPU had promised that the closed Estates will be brought back into operation so that they can be sold at a more profitable price. Enmore had started to produce molasses for DDL and Rose Hall and Skeldon were supposed to follow.
That quota to DDL is still to be realized and to date nothing has been done at Rose Hall nor at Skeldon. In fact the co-generation plant at Skeldon is at a standstill. Nothing that was planned by the SPU has come to fruition. It’s saying one thing and doing another. It’s just empty rhetoric!
It must also be recalled that the SPU had blasted the Opposition Leader that ‘as a former President and former Finance Minister he should know that the GY$30 billion bond for the sugar industry at 4.75 percent interest rate was a good deal’.
It now behooves to think whether borrowing $30 billion at 4.75% and not utilizing it for the intended purpose is a ‘good deal’ or a ‘bad deal’. We are simply piling up interests without any income being generated! Is this a wise move by the SPU? It is a bad deal gone worse!
In conclusion, the proceeds from privatization would have been enough to satisfy the capital needs of the three operational Estates and at the same time do away with the need to borrow. This slow pace of privatization would only seem to create the necessity and justification to borrow $30 billion. The fact that no capital expenditure has been done to date will serve to further validate this assumption.
I will restate what I had said in one of my letters, the $30 billion loan is just another victim of the gross mismanagement and squandermania we have witnessed during the past 3 years by this Coalition Government!
Yours sincerely,

Haseef Yusuf
RDC Councilor Region 6

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