Former President Donald Ramotar yesterday justified the now scrapped Guyana Sugar Corporation’s (GuySuCo) Strategic Plan 2013-2017 saying the plan focused on industry-wide diversification that would have eventually led to ethanol production and has urged greater investment in the sector.
In an interview with Stabroek News, the former president said under PPP/C administrations including his “we were moving towards having a distillery, to joint venture, to have more value and more revenues streams to GuySuCo so we could immunize ourselves from the international price of sugar, then eventually to have a refinery. That was the plan, they have a strategic plan that we left there and that plan shows how good it is.”
The same plan was heavily criticised by sugar experts including the main sugar unions for lacking tangible measure for addressing agronomy and factory rehabilitation works.
Ramotar told Stabroek News that in addition to the Skeldon factory co-generation plant, under his tenure there were moves to produce ethanol starting with trials at the Albion Estate. “We did our first experiments at Albion, started producing ethanol…you have two state companies GuySuCo and you have GuyOil and we could have done a joint venture with them to do a blend so that 10% of the gasoline that is being used could have been partially from ethanol,” he said.
He cited the Brazilian sugar industry as a model for Guyana saying that “our plan was to make the industry flexible like the Brazilian sugar industry is. When the price of sugar is high in the world market then they produce more for the world market, when the price is low then they produce more ethanol and sell abroad and so forth.”
The Brazilian sugar industry is heavily subsidised by the government.
The former president was asked if the corporation was deserving of so many chances to talk about plans that never came to fruition nor were included in the Strategic Plan. “You are looking at an industry that is, and I am not being emotional now, but it has contributed, it is the grandfather of all industries in our country. I still think it has a great future, but if we make it into a complex, not a sugar, but to make several other products from the industry…I showed you just now the potential it has in co-generation, in the even specialty sugars and different things,” he said.
Ramotar spoke of “things” that could be done to transform the sector and while noting that the end to preferential pricing in 2010 negatively impacted the industry, did not answer why since then, more active measures were not taken to transform the industry and move to diversification.
He said that a construction boom, gold prices, an active rice industry and the devastating floods in 2005 and 2006 crippled the industry by depleting its labour resources. As a result Ramotar said, “we had to do conversions of our fields for a more capital intensive, less labour intensive industry to cope with the problems we were having with labour.”
The former President was adamant that privatisation was never an option under his tenure, nor was it an idea promoted by the PPP. Ramotar asserted that GuySuCo needed the “opportunity” to perform. When asked by Stabroek News if GuySuCo had more than enough opportunities, Ramotar said that “we have to make the investment now, you have to change, you have to restructure it and you have to rework it like any other business. You have to put in the investment into it now.”
The sugar sector has received over $26 billion in budget support from the European Union (EU) since the end of preferential pricing. However, GuySuCo remains $82 billion in debt.
According to Ramotar, losing preferential pricing in 2010 by over 35% resulted in the EU “trying to compensate by giving some money.”
The former president and EU Ambassador Jernej Videtič recently had an exchange of words via letters in the local newspapers after Ramotar said that an additional €25 million was never paid out even though Guyana met the criteria for funding. The EU halted the payment after the prorogation of parliament on November 10, 2014.
“We had done before like we are doing now, at least when I was president of the country. I had very minimal interference …, only when GuySuCo needed money they came to me. I never interfered with the day-to-day management…when they themselves were in dire need for a cash inflow and so forth, they would approach the government and then we would have to discuss and see how we would have helped them so we were not daily interfering in the management of GuySuCo and that is what is needed to give GuySuCo the opportunity,” he argued.
“We have to keep investing in our factories to keep them efficient. That is what we need now, not the question of shut the industry down. To make the investment now so sugar can make a bigger contribution to the future,” he said. He failed to address why under his tenure and under former President Bharrat Jagdeo, the issue of factory upkeep was not taken seriously. Many of the estate factories are operating with technology that is over 70 years old.
Skeldon
“We know we had some problems at Skeldon, that’s no secret. Skeldon did not kick off as well as we did but we did a lot of work at Skeldon and it looks to me that is the leading estate for this crop,” Ramotar said.
At the time of its commissioning in 2009, the US$110M Skeldon factory was hailed as the future of the industry. Now, without having remotely achieved its targets, the US$200M Skeldon Modernisation Project, has been labelled a white elephant by critics.
Most recently, former GuySuCo Chairman Vic Oditt said that he was never in agreement that the China National Technical Import and Export Corporation (CNTIC) should have been taken on as the contractor for what was then the largest project in Guyana.
Ramotar defended the deal. “We went out to international bids. I think we had bids from China, from India and from Japan. I think those are the three areas we had bids from if my memory serves me right and the Chinese tender was the lowest tender, that’s why we went with the Chinese bid. If we had gone to the Indian tender that he wanted to go to, then they might have said we making some deal and cutting some deal when we could have gotten it cheaper with China,” he said. “It’s always good when you have hindsight, right?”
“I think it would be a little unfair for him to make a statement of that nature. There are other things that were discussed there too that different people had different positions (on) but let’s talk about what decisions were taken and those matters the decisions were taken on. The basis (was) that this was a big company in China, a huge company in China and they had the lowest bid. All these companies were prequalified, all these companies said that they could, we were told beforehand that any one of these companies can do it therefore prices became the most important thing. It is not a question of we were going shooting in the dark, these were prequalified companies,” the former president asserted.
He directed criticisms to UK-based sugar management firm Booker Tate, saying “you can’t blame the Chinese company alone. The Chinese company was supervised by Booker Tate. Booker Tate was the engineers, the consultants who should be looking after our interest there. Booker Tate should be signing off on the work done saying that it is good work so that they could be paid and pay the Chinese company.
“I remember sitting on the board and them (Booker Tate) giving glowing reports of how great the work the Chinese were doing, fantastic work, they have never seen such fantastic welding and all of that so we had to be guided. I’m not an engineer myself, I don’t do the welding myself,” Ramotar declared.
He said as a country “…we still cursing the Chinese (but) we can’t also leave the Booker Tate people out of it. They were our engineers.” Booker Tate’s contract was terminated under the PPP/C administration.
In February, the High Court ruled in favour of Booker Tate, ordering GuySuCo to pay £664,750.91 ($204 million) for fees owed during the period it managed the industry. Booker Tate had filed two claims in September 2010; one over the controversial Skeldon project and another for corporate management services it provided to the sugar corporation for an agreed period.
Politicking
In terms of current dynamics in the sugar sector, Ramotar, when asked if the recent strike by sugar workers was influenced by the PPP, said the APNU+AFC coalition government was playing politics. “It is obvious and the first statement comes from your Minister of Agriculture, all the strikes that the industry had under the PPP, nobody said then it was political, but the first strike they have….the first statement from the Minister of Agriculture is political. Who is making it political? It is he who is making (it) political. He is not examining the people are going on strike to try to get talks about wages and salary, they do that every single time when we were in government. And here is the same thing so why is it political now and it wasn’t political then,” he questioned.
Ramotar said while he has not kept abreast of the entirety of Agriculture Minister Noel Holder’s work, it appears that the minister lacks the ability to reach the average cane harvester and the average farmer.
Holder recently called the industrial action political while simultaneously stating that sugar employees were the highest paid in the country. The Guyana Agricultural and General Workers Union has demanded that he justify the statement.
