I believe Guysuco can be saved but the political will to do so is lacking
https://www.kaieteurnewsonline...to-do-so-is-lacking/
September 8,2018
Dear Editor,
I wish to applaud the Editorial in the Kaieteur News captioned ‘Ministerial Appointments’ and seek to agree that this Government ‘seems indecisive and confused on the future of GuySuCo’.
I will deal with one entity – the Skeldon Estate. This Estate is much touted to be a dismal failure engineered by the PPP Government and has been used ad lib by many politicians as the proverbial ‘whipping boy’. This is done until now whenever Guysuco is being discussed.
However, the COI commissioned by this Government gave detailed capital expenditures, which can transform the entire GuySuCo, making it viable and profitable by 2020. This is the same argument proposed by the Leader of the Opposition, Bharrat Jagdeo who has said that the $30 billion syndicated loan can be utilized to keep the operations at all the estates going. The more I analyze the scenario, the more I am convinced that GuySuCo can be saved from the guillotine but the political will to do so is unabashedly lacking by this Government!
Let us put this into perspective. The vendetta against the sugar industry is historical and was aborted in 1991 when there was a massive privatization drive by the PNC to sell and enrich. However, the opportunity presented itself again in 2015 and the Coalition Government lost no time in getting back on track to sound the death knell of the industry and the mantra that ‘GuySuCo is too big to fail’ sounded hollow, weak and misleading to the extent of being deceptive.
It is an acceptable and undisputed fact that Skeldon Estate is capable of producing 75 tons per hectare, 1,000,000 tons per annum, 110,000 tons of sugar, 40,000 tons of molasses and a tc/ts of around 9 tons of cane to produce a ton of sugar. In addition, the co-generation plant has the capability of generating 40mWh of power. In the years 2015 and 2016 this Estate, even though it had not reached this potential was producing in excess of 30,000 tons of sugar per annum. The COI had recommended that US$5.2 million be budgeted for Skeldon from 2016 to 2020 can bring it to realize its true potential. This was for the areas of:
– Accessibility and cane transport
– Civil structures
– Drainage and irrigation
– Mechanization
– Tillage and planting.
This is just over $1 billion. In fact, the COI had concluded that $21 billion or US$102 million can ‘restore and secure (all) the estates at a satisfactory operating condition’. It must be borne in mind that the SPU has now secured $30 billion, which is more than was recommended for the entire sugar industry! The COI has made it clear that ‘mechanization is increasingly important to sugar cane production in Guyana’ and can improve cost efficiencies to an extent to make the industry viable and profitable. Why did the Government fail to go this route, a recommendation for which it had paid in excess of $52 million?
The COI had estimated that by the end of 2017 with the recommended capital injection, Skeldon would have produced 61,745 tons, Rose Hall 37,836 tons and Wales 29,243 tons of sugar: a total of 128,827 tons of sugar. At the current moment, the entire industry will barely eke out 100,000 tons of sugar. With the recommendation of the COI, the entire industry would have produced 300,386 tons of sugar! This is again evidence that Jagdeo is absolutely correct! It is still not too late to use the $30 billion syndicated loan and make the entire industry operable again.
In terms of unit cost of production is estimated by the COI that Skeldon would have been producing at US$0.20 cents per pound, Rose Hall US 21 cents and Wales US 23 cents. The Industry average would have been US$0.21 cents by 2020.
The COI had recommended that each estate be involved in co-generation and the processing of refined sugar for which there is a demand of 200,000 tons within CARICOM. It must be noted that the SPU is regurgitating the same recommendation. The COI had specifically recommended the installation of high and medium pressure boilers and to perform the necessary modifications to the drives and process that will reduce power requirements. A boiler and turbine alternator will only cost US$11 million. The excess electricity would have been sold to the national grid.
It must be noted further that the COI had recommended that Skeldon factory be retained ‘and make it reliable by remedying the faults and narrowing the mismatch between field and factory’ and to build a sugar refinery at Skeldon and to brand and sell molasses. However, the COI noted that no capital expenditure was done at Skeldon in 2015. This would seem to suggest that the factory was deliberately allowed to deteriorate so that it can be placed under the guillotine!
It is evident that this Coalition Government conveniently followed the recommendations of the COI and disregarded some because it suited its vindictiveness. For instance, closure was not recommended but it went ahead and closed four estates, it plunged in excess of 6,000 persons and their families into dire poverty, it made a number of progressive communities into depressed ones overnight; the entire Region 6 ( a PPP stronghold) is in a regressive mode.
This Coalition Government could have taken a different approach to GuySuCo but it did not. They deliberately exacerbated the debilitating conditions, which exist in the industry as a prelude and an excuse to sell. Furthermore, it deliberately took the ‘wrong turn’ to magnify the sufferings of the sugar workers and their families (perceived as PPP supporters) who did not get a wage increase since 2015, have many benefits snatched from them and who are still anxiously waiting to get their severance pay. However, the Coalition contradicted itself in more ways than one as is manifested in the fact that on one hand it says that Skeldon, Rose Hall, Wales and Enmore are not viable yet claiming to the investors that they can be made viable and profitable. If that is so, then why are we selling those estates?
In conclusion, I wish to submit here that this Coalition Government is seemingly ‘indecisive, confused and contradicting’ themselves because they have a game plan, which focuses on the on the final plunder of the sugar industry for the enrichment of the few!
Yours sincerely,
Haseef Yusuf
RDC Councillor Region 6
