A number of engineers with China National Technical Industrial Corporation (CNTIC) – builders of the troubled Skeldon sugar factory – are expected to leave Guyana next month but questions remain over the quality of the company’s work and penalties it should have faced over what was to be a turn-key project.
GuySuCo CEO Paul Bhim told Stabroek News last week that three of four Chinese nationals attached to CNTIC, who are working with the corporation by providing technical training and support to staff at the factory, would be leaving next month. The other will leave the country before year end.
Bhim explained that the presence of the engineers is not a contractual arrangement between CNTIC and the government, but rather a condition of the contract for the construction of the factory. He said that the firm had remedied all problems which arose soon after the troubled sugar factory was unveiled in 2008. There were malfunctions after the factory’s unveiling and Bhim noted that the remedial works were undertaken within the liability period allowed to the company, in keeping with the contract.
When CNTIC was chosen to build the state-of-the art factory, questions had been raised about its suitability, since it was its first time undertaking such a venture. Industry experts have said that CNTIC should have faced a range of penalties because of the late delivery of the project and should have had liquidated damages applied against it. GuySuCo has never indicated what penalties, if any, have been applied against CNTIC.
Asked about the venture being a turn-key project, in which the company would have handed over a factory that was up and running, Bhim said the factory was handed over in working order. (A workers’ union source told this newspaper that the factory was expected to be tested a maximum of four times to determine the full extent of its operational capacity, prior to it being handed over to GuySuCo, but only one test-run was done prior to the unveiling.)
GuySuCo announced last month that major rehabilitation works were expected to be undertaken on the factory in the coming weeks and Bhim noted last week that works were moving apace at the factory.
He could not state off hand the cost attached to such works being undertaken by South African company Bosch Engineering, which will re-design and re-engineer several aspect of the troubled multi-million dollar factory.
Bhim, however, disclosed that currently the conveyor system for the transportation of canes and the bagasse retainer systems which feed bagasse to the boiler at the factory were being fixed. Additional works at the factory include the drilling of a new well, the replacement of a 5MW alternator and the modification of the punt dumpers.
Doomed
While president of the Guyana Agricultural and General Workers Union (GAWU) Komal Chand could not comment on the situation, since he was not familiar with the contractual arrangements made between GuySuCo and CNTIC, a union source told this newspaper recently that the corporation and the Chinese firm have been “saving face” at Skeldon.
He said that from the onset, the plant was doomed to experience problems, mainly mechanical in nature, since several inconsistencies in the design of the factory were pointed out to the Chinese during the construction phase. He said that a team of officials from the government, GuySuCo and the unions along with the Chinese had visited the factory during the construction phase and he noted that persons in the group had pointed out to the construction firm that several aspects of the design, including the punt dumper, were built in an unconventional manner. “The punt dumper was built facing one way and we in the industry know that it’s supposed to be a more conventional set-up,” the source said, adding that the CNTIC officials indicated at the time that the design was in keeping with the specifications outlined in their contract.
Since being commissioned, the factory has performed poorly, having produced less than the production figures of the other estates around the country.
According to former PNCR MP Tony Vieira, in the first crop for this year, the Skeldon factory produced 6,596 tonnes of sugar—a figure which he noted speaks volumes of the dismal performance of the factory compared with the 6,944 tonnes produced by the Uitvlugt estate. “…But we did not spend US$200 million ($40 billion) rebuilding the Uitvlugt factory and expanding cultivation; we spent it at Skeldon to produce the lowest amount of sugar in the 2012 first crop than any other factory in the entire industry,” Vieira stated recently.
Earlier in the year, he said that it took 72% more vanes to produce a tonne of sugar at Skeldon than at the Albion and Blairmont estates.
The factory, which was unveiled by the government to boost production to 300,000 tonnes and over annually, has been plagued by numerous problems from the very start.
Work on the factory began in 2005 and it was expected that the project would have been completed by October 2007. The commissioning was pushed back several times until the end of 2008. The turn-key contract would have seen GuySuCo taking charge of its running after the commissioning.
In August last year, then minister of agriculture Robert Persaud stunningly declared that GuySuCo did not have the competence to run the Skeldon factory and he urged the corporation to speed up consideration of proposals by Indian and Chinese companies to run it.
Persaud’s admission was made in the wake of the government’s dismissal of Booker-Tate from management of the industry several years ago and its contention that GuySuCo would be able to run the much-vaunted Skeldon factory.
His appeal for the consideration of Indian and Chinese proposals did not proceed further after questions were raised as to whether a management contract for the Skeldon factory had been put out to international tender. The following month, GuySuCo officials mentioned at a press briefing some 12 identifiable defects which they noted would have been remedied during the out-of-crop season.
