The Commission of Inquiry into the sugar sector has been mandated to address the option of divestment if necessary.
According to the terms of reference seen by Stabroek News, in the event that avenues and opportunities to make the industry viable in the near future are not realizable “then all other options including diversification and divestment will be considered.”
Analysts say the divestment option is a recognition of the dire state of the Guyana Sugar Corporation at the moment.
The terms state that a road map for the way forward will be created and structured in five-year intervals for 2016-2030 “which state goals and modalities of implementation.”
The COI is to be completed within 92 days beginning from July 1, 2015. Within 70 days of the beginning, draft hard copies of the plan are to be presented to the Agriculture Minister for review by Cabinet.
The terms of reference state that the COI is to function in multiple parts to “inquire into the current state of cane cultivation, production, and marketing of sugar, molasses and other by-products including power as well as i) GuySuCo the state-owned enterprise, which has been operating since 1976 (as) the nationalized Bookers Sugar Estates Ltd and ii) private cane farmers.”
The largest component of the COI will focus on investigating and reporting recommendations in a variety of areas inclusive of diversification “in the widest sense; new uses for industry assets by-product utilisation, value-added and industrialization of sugar.”
The most comprehensive issue to be expanded on is the agronomy and focusing on reconsidering mechanization and mechanical-friendly field layouts. Because the COI is tackling the industry as a whole the previous Strategic Blueprint 2009-2013 and the subsequent Strategic Plan 2013-2017 that were devised for GuySuCo will also be reviewed.
The 11-man team headed by Chairman Vibert Parvatan, will also assess the finances inclusive of the cash flow and the profitability of the industry in light of its debt. GuySuCo’s current debt is over $58B. Along with the industry’s profitability the COI will look at marketing focused on value-added production and research and development moving forward.
Parvatan had told Stabroek News previously that the aging sugar factories all required intensive scrutiny. The COI will report on the current maintenance level including repairs and rehabilitation needed for all factories.
The COI refers to revisiting the “special circumstance of Skeldon”. Parvatan had also told Stabroek News that the commission has requested contracts and reports from the Agriculture Ministry as well as from the sugar corporation that were not previously made public or ever presented to the National Assembly. He had said that the commission had around 50 reports to look over. Many of those would be directly related to the US$120M Skeldon factory as well as the entire US$200M project.
The Chinese-built Skeldon factory has been a major disaster for the industry and a drain on its finances. It was the brainchild of former President Bharrat Jagdeo but has been rife with problems from the inception.
On July 2, John Dow and Joseph Alfred who are specialists in factory operations along with George James who is well-versed in sugar processing visited the Skeldon factory. Agronomist James Piggott was to also attend the factory visit as he asked to go along. Parvatan told this newspaper that the commission would like to relay any findings to the ministry prior to public disclosures being made.
Parvatan had told Stabroek News that the inquiry was industry wide and as such the terms reflect the need to address private cane farming and community obligations. Additionally the COI is aimed at looking at the impact of weather events and the change in climate.
The Chairman had previously said that the COI will focus on four areas: the state of the fields, the factories, human resources and marketing. He had stated that the members of the commission will work in the areas that they are experts in and will share findings.
The other members of the COI are Nowrang Persaud, a specialist in industrial relations, Claude Housty specialising in marketing, GAWU representative Seepaul Narine, Dr Harold Davis, an agronomist and Omadatt Chandan who will serve as the Commission’s Secretary.
