Nine months later... No clear plan for multi-billion GuySuCo bond – Workers’ Union laments

Nine months later… No clear plan for multi-billion GuySuCo bond – Workers’ Union laments

Dec 29, 2018 News

The Guyana Agricultural and General Workers’ Union (GAWU) has raised concerns over the handling of the $30B syndicated bond meant to revitalize the sugar industry, and has criticized what it interprets as ‘no clear plan’ by the government on how they will proceed with the execution of projects under the purview of that budget.
Komal Chand, President of GAWU, told the press that stakeholders and the public are yet to be made aware of the details underlining the government’s efforts. He said that GAWU is aware that Minister of Finance, Winston Jordan, said that the bond is meant to be used “…to acquire two co-generation plants; to upgrade existing factories to produce plantation white sugar; to build storage and packing facilities; and to contribute to two (2) years of general operational costs”. However, Chand said, there was no mention of investments in the cane fields to improve productivity.

GAWU President, Komal Chand

He said that in April this year, the then GuySuCo CEO, Paul Bhim, in a GuySuCo/SPU engagement, told GAWU that $11B would be spent on capital works across the three estates, with about 70 per cent of that sum being utilized in the fields. The GAWU President said that the union is concerned about whether there would be sufficient quantities of canes available, though they are supportive of initiatives in co-generation and white sugar.
The union made note that State Minister Joseph Harmon had spoken at the end of October, of a plan submitted by GuySuCo to engender its viability, and that President Granger, in his address to the National Assembly on October 18, said that “a plan is being developed to boost production in the remaining East Berbice, West Berbice and West Demerara estates”.
Chand said, “We hasten to ask that between October 18 and 31, a span of 14 days, GuySuco was able to develop its plan and present it to the Administration,” which was, according to Minister Harmon, “underpinned by a 10-year supporting cash flow projection.”
Chand said that on September 26, Agriculture Minister Noel Holder had said that he is clueless about the monies that were borrowed from multiple banks to finance the bond.
“It seemed to us that apparently Minister Holder is out of the loop regarding the monies that have been borrowed, which are backed by a sovereign Government guarantee and secured by the assets of NICIL – which incidentally belong to the people of Guyana. The Agriculture Minister’s tirade, as it were, is yet another demonstration of how the affairs of the country are addressed by the Granger Administration. It also, once more, brings into focus the Administration’s more than confused approach to the sugar industry generally.”
Chand said that the union is in support of measures to improve the sugar industry, but only on the basis that measures are executed from credible and “well-thought-out” plans. He said that the plans concerning the bond, borrowed with a sovereign guarantee, are very secretive. He urged the government to share those plans with the Guyanese public, and to have the necessary consultations with stakeholders who have interests in the betterment of the sugar industry.
The monies for the $30B bond were raised by the National Industrial and Commercial Investment Limited (NICIL), an arm of the Government that handles investments.
Earlier this year, NICIL successfully negotiated with a number of local banks and other financial institutions to raise the bond. The transactions were being handled by the Hand-in-Hand Trust with Republic Bank, and reportedly the Guyana Bank For Trade and Industry. At the end, the negotiations for what was considered the biggest facility of its kind, locally, NICIL managed to secure $30B.
The monies from the bond are to be spent on improving the factories of Albion, Blairmont and Uitvlugt, the three remaining estates of GuySuCo.

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