The government has the option of applying a US$5 million charge on the contractors, CNTIC of China, for liquidated damages resulting from their failure to commission and hand over the newly constructed US$181 million sugar factory at Skeldon on time.
The original deadline was October 2007 and it has been pushed back ever since with the last date set for August 2, 2008. Due to technical difficulties the factory has had to abort its commissioning tests.
Contacted about the application of the provisions of the contract which caters for damages in the sum of US$5 million, Persaud told the Stabroek News that no decision had been taken in this regard.
The government, he said was mulling the US$5 million sum to meet the liquidated damages as well as other options which could be applied as penalties. However, he reiterated that the priority at this point in time was getting the contractors to deliver the factory.
On Tuesday, Persaud told Stabroek News that Guysuco was likely to lose substantial revenue from the second crop at the Skeldon sugar estate because of the mechanical failure of the new sugar factory and the inability to crush the sugar cane for the current crop. This means that the factory will not meet its production target set for this year.
He had said then that the financial fallout from the mechanical failure has not yet been quantified.
