…despite firing thousands, downsizing
It has emerged that the National Industrial and Commercial Investments Limited’s (NICIL) Special Purpose Unit (SPU) is seeking some G$30 billion in loans and investments to support its new ward – the Guyana Sugar Corporation (GuySuCo).
It is understood that this funding will cover a four-year period and will provide capital, support infrastructure maintenance and upgrades at Albion, Blairmont and Uitvlugt. The funds are also expected to go towards developing new cogeneration capacity for the estate operations and the national electric grid.
GuySuCo has a history of debt; at the end of 2015, the Corporation owed G$78.6 billion. In January of last year, the National Assembly’s Economic Services Committee was informed that the debt showed a marginal decrease to G$77 billion. This money was owed to the National Insurance Scheme (NIS), the Guyana Revenue Authority, the Caribbean Development Bank (CDB) and others.
One of NICIL’s first acts since assuming responsibility for GuySuCo has also been to abruptly end the life of the old Board of Directors. Coming out of a special Board meeting, a decision was taken to have a new Board installed as of February 14, 2018.
But that’s not all, the NICIL Board has also handed down instructions to GuySuCo to freeze all hiring. According to NICIL’s Public Relations Consultant, Alex Graham, instructions have also been handed down to not renew any employee contracts that are in the process of expiring.
“NICIL has begun working with the management team at the Corporation to implement management changes, some of these changes are already being implemented and more are expected to follow in the coming weeks,” Graham related on Sunday, in one of the clearest statements yet on the plans for GuySuCo.
All of this, Graham related, is being done with the full cooperation of the management team of GuySuCo. He related that SPU head Colvin Heath-London, speaking after a meeting between the two teams, had stressed that profitability depended on the teamwork between NICIL and GuySuCo.
DDL
In January, Demerara Distillers Limited (DDL) had submitted an Expression of Interest (EoI) for the purchase of one of the estates. This was even as the SPU was seeking interested buyers for the Skeldon and Enmore estates.
The company, which produces the international award-winning El Dorado Rum, has raised concerns over Government’s plans to downsize the sugar sector. The company heavily depends on molasses for its production.
According to Graham, both the Unit and DDL have been exploring the company investing in the current crops at Enmore through advance payments on the molasses. In addition, talks are also ongoing for DDL to participate in the management of the estate.
Graham also noted that PricewaterhouseCoopers (PwC), the firm blacklisted in India that has been valuating GuySuCo’s assets, had raised concerns about the need to have the estates seen as “fully functioning operations and facilities”.
This, it is understood, is because the company felt that closed estates would not attract the best of investors and prices. According to Graham, the DDL deal, if approved, by the NICIL Board would allow the SPU to meet PwC’s recommendations.
Government had moved to close the Enmore and Rose Hall Sugar Estates, as well as to sell the Skeldon Sugar Factory. Government’s explanation for downsizing the industry has always been to cut costs.
There has been persistent criticism, however, that the decision is political in nature. Severance payments for these workers also became a sore issue. So when the decision to reopen was first made known, it did not help to dispel this perception.
It was announced that Enmore and Skeldon would see a temporary and limited reopening for a twofold purpose; to save cane currently in the ground and to render the operations more attractive to potential investors.
While the parliamentary Opposition had welcomed the move taken by Government to have at least two sugar estates reopened soon, Opposition Leader Bharrat Jagdeo had said this now proves Government’s move to close sugar estates was purely political.
However, the Opposition Leader had noted that President David Granger and his entire Cabinet must take full responsibility for the flip-flop policy choice, which also now indicates that the Government’s decision to close sugar estates and downsize the industry was political.
