Dear Editor,
For several years, the poor performance of GuySuCo has been described in the newspapers by knowledgeable professionals. Unfortunately, their analysis of the decline and the unprofitability of sugar has been largely ignored, due to partisan political posturing and propaganda peddled by the PPP government.
However, the recent revelations by GuySuCo senior management before the Economic Services Committee of Parliament (ESCP) is a good sign of redemptive behaviour, signalling the beginning of a serious process of providing accurate information that can save taxpayers money; and for the Parliament to make decisions on how to reconfigure and/or dispose of GuySuCo assets, given that the political game has ended and that the sugar workers, sugar-cane farmers and the Guyanese people can no longer be fooled by a blame game that gives excuses such as the weather, the opposition, the workers, and the European Union. These are all unsubstantiated claims that do not assist in resolving the current problems in the industry.
The untested notion that GuySuCo can cut its cost of production that is twice the world market price is another false claim that cannot be used as a serious forward-looking indicator, especially when one considers that no details are given about the critical field and factory productivity measures that will have to be increased by more than 50 per cent. Management should be asked to substantiate their productivity increases with hard facts obtained from an estate that has succeeded in these areas, and from an estate where mechanization has been tried; otherwise, it would be another unforgivable mistake that would waste taxpayer money. In fact, one only has to examine the annual subventions from the Treasury to measure the magnitude of the wasted tax dollars that have yielded no significant net-benefits to workers, GuySuCo or the country.
Equally important must be the delivery to the ESCP of the GuySuCo technical audit reports of the field and factory operations, the audited financial statements and the audit letters that provide details of the technical, management and financial health of the corporation for the last 5 years. Full details of the US$200 million plus white elephant at Skeldon and the packaging plant must be provided. Without full information, it would be useless to speak of projections for the next 3 to 5 years, for one cannot speak of going forward, if you cannot say with certainty what were your most recent performance indicators and profitability measures. Incidentally, the debt GuySuCo owes to the World Bank, China EXIM Bank, the Caribbean Development Bank, NIS, local and foreign suppliers, among others, are debts the people of Guyana will have to repay as GuySuCo will never have the money from sugar sales to meet these obligations; only a permanent subsidy in billions of dollars from the approved national budget (see SN letter, ‘Currently it is cheaper to import sugar than to produce sugar at GuySuCo,’ April 7, 2014) will satisfy these commitments.
Furthermore, an examination of GuySuCo’s balance sheet using real market prices will confirm that GuySuCo has negative equity/capital as total liabilities are greater than total assets. The ESCP must press on with this important exercise which is long overdue for professional oversight has been lacking and the management is inept. Furthermore, appointing a new Board of Directors at this time makes no sense as they should only be appointed when a clear mandate has been determined by the ESCP. To do otherwise would be putting the cart before the horse, continuing the current folly.
Yours faithfully,
C Kenrick Hunte
