A review that the government is commissioning of the sugar industry will recommend corrective actions to be taken by GuySuCo to meet production forecasts and scrutinize areas such as the suitability and standard of current operations.
The government last week announced that a review of the sugar industry would be commissioned for the period 1997-2008 in light of falling production and there have been increasing questions about the stewardship of GuySuCo which has been under management of Booker Tate since the early 1990s.
Separately, government had announced earlier that the management contract would be put out to tender next year. Last week, President Bharrat Jagdeo told a seminar that he had read the “riot act” to GuySuCo management over the drop in production. A large sum has been expended on the industry to improve production.
In a request for tender document released to the media on Saturday, the government cited a decline in sugar production since 2005 as one of the major reasons behind the ordering of the review. The document notes that in 2002 the industry produced 330,000 tonnes of sugar – the highest level since nationalization – but ever since it has fallen significantly. It noted that the Great Flood of 2005 and other weather factors had a serious impact on production that year which fell to 246,000 tonnes. “Production has struggled to regain the levels attained since the early 2000s and (GuySuCo) is forecasting 285,000 tonnes production for 2008”.
This figure may now be in jeopardy because of inclement weather and recent strikes on several estates.
Under the general terms of reference, the chosen consultant will:
*Examine the historical performance of the corporation with particular attention to the period 1997 to 2008
*Assess production projections relative to GuySuCo’s strategic development/investment plan
*Comment on the reasons for the shortfall in productions
*Recommend corrective actions to meet long-term production forecasts.
In relation to cane and sugar production, the chosen consultant will have to consider:
*The effectiveness of the use of opportunity days to boost output
*The effectiveness of the capital replacement programme within budgetary constraints
*Suitability of production plans given known weather patterns
*Management of labour relations
*The effectiveness of the use of Bell loaders
On the question of land preparation and planting, the consultant will be tasked with evaluating:
*The suitability and standard of the current operations
*The suitability and efficacy of land preparation in light of known and forecasted weather patterns
*The effectiveness and suitability of the current fleet size
*Issues related to the Skeldon Sugar Modernisation Project including land development by estates.
In terms of the financial review, the consultant will examine financial projections against actual performance and the structure and terms of the management contract. It will also assess the latter in relation to “incentivizing financial performance and management efficacy of the industry”.
The tender document traced the history of the industry and pointed out that production reached a peak of 382,648 tonnes of sugar in 1971 and following the nationalization of the industry in 1976 there was a progressive decline and by 1990 production was 132,000 tonnes.
It further pointed out that the sugar corporation inaugurated a strategic plan in 1998 to take account of the imminent changes in the global trading environment and to improve productivity further but financing constraints delayed the start of the programme until 2004.
