By Miranda La Rose
The Booker Tate management team is to stay on board at the Guyana Sugar Corporation for six months following the commissioning of the new Skeldon sugar factory, after which an international tender for management is to be put out.
Meanwhile, the new date for the completion of the Skeldon project is August 2, Minister of Agriculture, Robert Persaud told the meeting of the Economic Services Committee at Parliament Buildings yesterday.
Responding to questions about provisions for Guysuco to continue with its foreign management contract, Persaud said that was covered in the corporation’s Business Plan for 2008 to 2016, which was approved on June 17 last. He noted that the number of foreign contracted employees had been reduced to six persons from 29 in the early 1990s. He said that there has been much “Guyanisation” of the management of Guysuco in recent years. Booker Tate has managed the industry unchanged since the early 90s.
Persaud said Guysuco was “contractually obliged to supply cane to the new factory from August 2, with a date of takeover of August 8, 2008.” The Chinese contractor working on the project, he said, would then have 28 days from the date of takeover to achieve full operation. If the takeover process is not completed during this period, liquidated damages would apply.
While he admitted that the Skeldon project was behind its scheduled start up time, he said that contrary to an assumption, there was never any agreement to deliver the factory in 2006. He noted that the project was conceived in 1998/1999 but Guyana’s classification as a Highly Indebted Poor Country delayed the start until 2004. The contracts were not signed until late January 2005, owing to the floods that affected the country’s coastland.
The original date of completion was October 2007 but because of increased piling and other delays, including weather and the Chinese contractors’ visa issues, completion is now set for August 2, 2008 Persaud said.
Asked how much of the US$181 million investment in the new factory has been spent to date, Chairman of the Guysuco Board of Directors Ronald Alli said US$120 million had been spent. The remainder will go towards investment in the agricultural aspects of the project.
Alli explained that the new factory is expected to operate for 25 weeks at full capacity. This would also mark the initial testing of the factory equipment, which will run at maximum speed continuously for three days. According to Alli, this is to ensure that the equipment is in perfect working condition because the suppliers would not be returning in a hurry once they would have left.
Answering questions about the current output of electricity from the Skeldon co-generating plant, Persaud said it had not yet been commissioned but the plant is capable of producing 10 megawatts (MW) of engine-generated power. He said that because of the delay in the installation of the 69 KV transmission lines, output has been restricted. There has also been a problem with the five MW engine, but it is under warranty and will be operational again during this month.
Negotiations are ongoing for the finalisation of a Power Purchase Agreement (PPA) with GPL and the price is not yet available, as the factory has not yet started producing co-generated power. Most of the power currently generated goes to the national grid.
Asked whether resources which were essential for the efficient maintenance of the industry had been diverted to complete the Skeldon factory, Persaud said efficient maintenance of the industry continued despite the funding of Skeldon.
At the same time investment in agriculture for other estates were made in Bell loaders, replacement of crawlers with wheeled tractors and conversion of fields to mechanised friendly layout at Enmore Estate.
He said there has also been additional investments in the factories over and above the normal ongoing maintenance, such as air heaters added for the boilers, packaging equipment and factory upgrade of Blairmont for the packaged sugar Demerara Gold, and replacement of generator units at factories.
In response to questions about Guysuco’s progress in relation to the construction of a distillery, refinery and ethanol plant in keeping with the Skeldon modernisation plan, Persaud said approval for pursuit of equity funding for the refinery and ethanol plant has now been received.
“A refinery placement document is currently being finalised for approval,” he said, adding that once approved the document will be issued to prospective investors to raise capital for the construction of a 120,000-tonne refinery.
In relation to the production of ethanol, he noted that a pre-feasibility study was done by the Economic Commission for Latin America and the Caribbean (ECLAC). Guysuco is now sourcing funding for a feasibility study on whether the investment should be in potable alcohol or fuel alcohol, he added. The feasibility study should be completed by the third quarter of this year and sourcing of funding for the investment will be pursued before the end of the year.
The distillery project, he said, was delayed following court action taken by Demerara Distillers Limited (DDL). This matter is still in the courts under appeal.
Industrial relations
Persaud said Guysuco has ongoing efforts aimed at improving the industrial relations climate. These include regular training and sensitisation programmes on the effective and accurate interpretation and application of the collective labour agreements and grievance procedures. There are also regular briefing sessions on the estates involving workers representatives and union officials on operational and strategic issues. These sessions are being conducted by the management of the estates at least three times a year.
The recent resuscitation of the monthly-held workers’ council provides an opportunity for workers’ representatives to participate in key decisions affecting the overall performance of the estate. At the central level, briefing sessions are held with central executives and branch officials of the unions to communicate changes in business and strategic plans. There is a free flow of information on matters of marketing, finance and operations to promote trust and trustworthiness at wages negotiations.
Workers and representatives are constantly informed on effects of strikes on the well-being of the sugar industry, and the need to exercise due attention to standard procedures that guide industrial actions.
Persaud said Guysuco was reviewing its organisational and management structure on an ongoing basis. He said that recently, the organisational structures for the head office departments were all reviewed with the intention of consolidating the functions of the various departments. At the macro level, a review of the organization is currently being addressed by the board of directors.
