President Jagdeo’s dire warning to Corentyne residents last week that if the ambitious Skeldon factory failed that sugar was dead must have come as something of a shock to the residents of the area.
Pointing to the scale of the investment – US$200M, the President warned “We’re not going to make that sort of investment to have a few people mess it up,” adding, “So even if it means personally I have to get involved, I will get involved to ensure that it is fixed…that it’s delivering the kind of results that it should deliver so that we can safeguard the sugar industry.”
Whether he thinks so or not, President Jagdeo is already fully involved in this massive project as is his Minister of Agriculture and they must be held accountable for everything that goes well and everything that goes wrong. Given his style of management the decision to invest US$200M in the Skeldon factory would have been President Jagdeo’s as would have been many others in relation to this project. Nevertheless, his pledge of even closer scrutiny of Skeldon is welcome as the consequence of failure is unimaginable. The President’s declaration also recalls that of President Cheddi Jagan who had vowed to become more involved in the electricity sector as it had proved to be irremediable.
For sometime now President Jagdeo’s government has played down the seriousness of the problems which have afflicted the new Skeldon factory and the industry as a whole. At the level of the Guyana Sugar Corporation this manifested itself in an almost cavalier belief that things would go according to plan. This was evident when the old Skeldon factory was decommissioned under the now departed Booker-Tate management even though it was always going to be a close-run thing as to whether the Chinese company, CNTIC’s new factory would be up and running. It wasn’t and the old Skeldon factory had to have some parts recalled from other estates and pressed back into operation because of the gross miscalculation.
The scale of that miscalculation has been repeated in many other facets of the planning for the US$200m investment in Skeldon which was hyped up as the answer to the country’s economic woes. Then came the upheaval in the European Union market and the harsh realities of a future without the type of market protection or price that we had grown accustomed to. The bottom line was a hefty cut of 36% in the price paid by the EU for ACP sugar.
President Jagdeo would be better advised to channel his wrath and unhappiness in the direction of the GuySuCo directors that he and his government installed in their own deliberate judgement to preside over the turnaround of the industry. Included in the directorate is the PPP’s General Secretary, Mr Donald Ramotar who has been there from just after the PPP/C acceded to office in 1992 and is the favourite to clinch the nomination as the PPP/C’s presidential candidate. He of all the directors should have been able at the policy level to help steer the industry to safety. The turnaround directors have had almost two years to marshall this sugar recovery but nothing seems to have changed in the industry and the weather gets most of the blame.
There are two issues that have bedevilled the corporation in respect of Skeldon: cane availability and the state of the Chinese factory and these fall eminently in the domain of the management of the corporation and the board with ample room for input from President Jagdeo and Minister of Agriculture, Robert Persaud. From the outset it was the government’s and the corporation’s hare-brained planning which has left Skeldon without the required amount of cane in the ground. As we have lamented many times before in these columns, the government planned a factory that could consume 1.2M tonnes of cane per annum but didn’t properly apply itself to the considerable challenge of ensuring that by the time the factory was commissioned there would be sufficient cane to feed it. This quandary must rank as an example of the most incompetent project management in these parts. More than a year after the factory’s much delayed start there still isn’t enough cane to feed it and this may remain the case until next year. No sugar worker or no resident of the Corentyne can be blamed for that gross failure on the part of the government. The factory project had been talked of since 1998 – more than sufficient time for the government and the corporation to set in train the additional cultivation by the Skeldon estate and by private cane farmers.
Ironically, even if the new factory could have been supplied with the requisite amount of canes, Skeldon, judged by its current state, might not have been able to grind anywhere near to capacity and may have created enormous backups in the cane delivery system and frustrated private farmers. The loss as a result of the inability to run Skeldon at peak capacity must be staggering, compounded by the additional cost from the intermittent running of equipment, malfunctions and sub-optimal morale among workers.
Sugar has clearly been in trouble but the stark statement by President Jagdeo has heightened the urgency to find answers. This would have been the right moment to ditch some members of the present board and to gain fresh perspectives on dealing with the problems. The government, however, is never keen on changes that could expose it.
Given the urgency, the Economic Services Committee of Parliament should have summoned hearings on this matter to get a clearer picture of what is going wrong and to remain fully engaged with the corporation and the government.
It is perplexing that the government has not yet spoken about the first step that should be taken in this matter. The contractor for the Skeldon project, CNTIC, has to be made to account completely for all of the ongoing problems. As with every other slice of life in this country, the government holds no one accountable. So the President could get away with just blandly declaring that a “few people” won’t be allowed to cause problems with the factory. Who are these people Mr President and what measures have been taken to restrain and penalize them? Do these people include the Chinese contracting firm?
This was meant to be turn key project but the start up of the factory has precipitated one problem after another. What financial penalties have been assessed against CNTIC for the late delivery of the factory and ongoing problems? Is the project officially and completely handed over? Is CNTIC in an ongoing arrangement to perfect existing problems? Is legal action against CNTIC a possibility? These are questions that the Government of Guyana and GuySuCo need to be heard on audibly otherwise they would be abdicating their responsibilities to the public. It is also important to crystallize and clear the liabilities of CNTIC before entering into any arrangement to hire other experts to oversee the factory.
As for the supply of cane one can only hope that the government and the corporation are doing their utmost on the ground to ensure that there is a sufficient supply shortly.
How and why CNTIC was chosen might at some point become an appropriate subject for investigation and one that President Jagdeo himself may be called upon to provide testimony on.