Opposition parties A Partnership for National Unity (APNU) and the Alliance for Change (AFC) are unlikely to vote in favour of budget measures for the Guyana Sugar Corporation (GuySuCo) given the continued dismal production and in the absence of a comprehensive turnaround strategy.
Sugar for 2013 hit a 22-year low, with GuySuCo producing just 186,000 tonnes, falling short of the European Union quota.
Following peak production in 2004 of over 300,000 tonnes, the output of the corporation gradually began to decline over the years. The corporation has been revisiting its yearly targets downwards every single year and at every budget presentation for the past five years the Minister of Finance has an assessment of the economy and the ‘non-sugar economy’ in speaking of the country’s performance for the previous year.
Speaking to Stabroek News recently, Chief Executive Officer of GuySuCo Paul Bhim confirmed that Guyana had not met the EU quota; only 135,000 tonnes of sugar had been exported to the European market at the end of November 2013.
The corporation had a target of 232,000 tonnes as its minimum production for its international and local quotas but this faded into oblivion as GuySuCo slid towards a large deficit.
Bhim had told this newspaper that the corporation would suffer no injury through undersupplying the European market since there were no penalties attached to the commercial contract and that the local market would not be affected by the shortfall.
The corporation has been plagued by a flurry of industrial relations issues over the years compounded by bad weather which reduced days available for work. In addition, the Skeldon factory’s performance has been way below par following its commissioning some five years ago.
The annual production for the industry has been projected to be 350,000 tonnes with Skeldon brought into the picture. This had been scaled back from an ambitious 450,000 tonnes earlier due to issues with the Chinese built factory. A plan recently seen by the Stabroek News had a startling admission – that the Skeldon factory is only now capable of delivering 71 per cent of what it had been originally designed to deliver.
That document pointed out that Skeldon made a loss $2.7 billion in 2012. It said that the projected loss for 2013 had been $1.8 billion and that profitability is expected to improve to $407 million in the year 2017 once all of the expectations for improved factory performance are met.
Dr Rupert Roopnaraine of APNU said GuySuCo’s performance in 2013 is nothing short of a catastrophic collapse and that any consideration of allowing future subventions to the beleaguered State-owned entity must be tied to a Commission of Inquiry or similarly structured mechanism to address flaws over the long term.
Speaking to Stabroek News on Saturday, Dr Roopnaraine said, “My own feeling is that any assistance should be tied to a Commission of Inquiry.” He pointed out however that the party’s Shadow Cabinet has not yet considered the issue.
“We could no longer think short term in terms of five-year plans. There must be a serious examination of the industry for the next 20 years,” he said.
“There is no serious strategic thinking going into it,” he said. “My feeling is that it is beyond rescue. We are calling for a Commission of Inquiry into the industry,” Roopnaraine said. “Until we subject it to that kind of scrutiny there will be no change,” he said.
Roopnaraine is convinced that government will return in the 2014 budget for more money for the ailing industry, “but it is not leading to a recovery.”
He said the government has not provided any serious document on the way forward for the industry. He said that the plan that was presented for 2014 to 2018 is nowhere near what is needed to effect change to the industry.
“We just cannot go along on the same way. We will not be voting [on any sums for Guysuco] unless there is a plan for the next five, 10, 20 years. We should insist that a Commission of Inquiry or a serious task force be established,” said Roopnaraine.
Khemraj Ramjattan of the AFC said that the party will access the answers that government will provide before deciding whether or not to vote in favour of further bailo
uts.
“The AFC will react this time with tremendous hesitation and, though this is a personal position, there is every likelihood that either an abstention or a no vote will be the case,” he said in a comment to Stabroek News yesterday. “At the appropriate time a collective party position is what we go along with,” he said.
He said that normally the AFC members would ask searching questions of the minister as to reasons for the allocation. “And once answers provided are satisfactory to the seven AFC parliamentarians, we will support,” he said. He added that bailing out GuySuCo cannot go on indefinitely; at some stage a halt must be called.
“We foresee the propaganda machinery of the PPP going to work after that saying how AFC does not like sugar workers and it only wants to give Lindeners bailouts and so on. These devices ought not to deter us,” said Ramjattan.
