GuySuCo management seeking $1.6B for more “unsuitable” tractors

Jul 02, 2022 News

---

Kaieteur News – Executive management staff of the Guyana Sugar Corporation (GuySuCo) is seeking approximately $1.6B from the Guyana Government, to facilitate the purchase of at least 11 articulated tractors, despite internal contention over the unsuitability of the equipment in the preparation of land for planting sugarcane. In the document which was dated June 2, 2022 and addressed to Vice President Bharrat Jagdeo, it was detailed that GuySuCo is facing a tillage challenge.
The company’s estates are expected to plough and prepare 20 percent of their lands annually, but it was found that even the minimum field equipment could not fulfill the task.
The document said, the consequence is that the two main sugar Estates—Albion and Blairmont—were only able to till and replant 14 percent and 11 percent respectively between 2018 and 2021, resulting in an annual shortfall in the replanting of cane lands.
The company told the Vice President that apart from losing money, it faces four fundamental problems; the inability to till and plant the land in accordance with the 20 percent convention because of a lack of adequate field equipment; the deteriorated factories; the poor state of the cane transport infrastructure; and the rapid labour attrition rate.
Additionally, there is a deficit of 11 pieces of critically needed tillage equipment across the industry when the Uitvlugt Estate is included.
In the letter, the Corporation expressed gratitude to the Government for the recent procurement of six “articulated tillage tractors.”
It said, the equipment possess a technology that is more compliant with the needs of the industry, but even with their acquisition, there is a deficit of five machines at Albion and Blairmont based on their requirement.
“Immediate expenditure needed in addition to the G$4 Billion Capital Contribution for 2022 totals up to G$1,596M, approximately G$1.6 billion,” the executives’ letter said.
The sugar company has stated repeatedly gross deterioration of assets due to the downsizing of the industry has cause significant issues in turning around the sector. Given the company’s heavy dependence on state finances, calls have also been made for the company to be prudent in its investments—the purchase of the articulated tractors being a case in point.
Kaieteur News understands that senior sugar officials, including some Board of Directors are against the purchase of the articulated tractors, since they say it is unsuitable for tillage at the company, and that the product had not been purchased by the company more than two decades now.
Information suggests that moves to purchase articulated tractors did not occur until the new management arrived.
Under the then name Cameco, GuySuCo used the equipment since the 80s and 90s but it eventually phased out due to its high cost and high maintenance.
This newspaper was told that when information for the six government- purchased tractors came to the board, there were heated exchanges for and against the product. A report on the efficiency of articulated tractors (Game) against the (fixed frame) John Deere tractors was ordered by the board. The review which was reported on by this newspaper said that John Deere tractors are cheaper, performed better and saved a bit more time and fuel. A month later, GuySuCo’s Chief Executive Officer, Sasenarine Singh, signed a more than $200M contract provided by the government for the procurement of the said articulated tractors.
This new fleet of equipment will nonetheless improved yields from 2024, since it will arrive in 2023, the letter to the VP said.
Stakeholders have since continued to express deep concern over the purchase which senior company staff is against.
It was pointed out that a proposal from the providers of the equipment, GAME LLC, shows that the equipment deals directly with haulage and not tillage, as is required by the sugar corporation. More than five recommendation letters from sugar companies in different countries spoke directly about the tractors excellent capabilities in transporting sugar cane while GuySuCo’s specification spoke to tillage.
Outside of this, the equipment company’s finance has been reducing since 2019, leaving some to claim that GuySuCo is basically liquidating this company by handing it large contracts.
The letter to Jagdeo says that, the GuySuCo Executive Management is thankful for government’s support in purchasing the six articulated tillage tractors.
“These machines are expected to arrive in Guyana in late 2022 and will be in operation from the first Crop of 2023. This technology will add approximately 975 hectares of tilled lands to the 2023 planting programme. These tilled lands are estimated to yield an additional 48,750 tons of cane to the industry’s 2024 production capacity. The dollar value of these gains is approximately G$502 million, which translates to these tractors paying for themselves in less than two years.” Concerned stakeholders argue that while six articulated tractors were purchased at $200M, 12 John Deere tractors could have been bought for the same price. Seven executive staffers signed the VP letter including Sasenarine Singh, the company’s Chief Executive Officer.

 

---

---