The current political climate is partly to blame for the delay of the government’s divestment of some of the Guyana Sugar Corporation’s (GuySuCo) estates, according to Minister of Finance Winston Jordan.
Asked to give an update on the process after presenting the Mid-Year Report on Wednesday, Jordan told reporters that there was nothing much he could add beyond what has been said in the media—that the sale of the estates has been delayed.
He stressed that investors are “extremely cautious” and noted that the situation is partly due to concerns about the current political environment and comments that have been made by the opposition People’s Progressive Party (PPP).
“It is partly due to the political side because nobody is expressing interested when the opposition says ‘We are going to review sales and so on.’ And that happened in the past, too, where people pulled out when the atmosphere [was] uncertain, when you are suggesting that this review, which is another word for harassment, will take place,” Jordan said.
He explained that those statements have not gone down too well and at this stage, given the current administration’s status as an “interim” government, it would not want to engage in any major privatisation.
In January, Opposition Leader Bharrat Jagdeo said his party would not honour any contracts undertaken by the current administration in wake of the passage of a no-confidence motion against government on December 21st, which requires that early elections be held. “We would not recognise any deals that [are] not the routine. When I spoke about the routine function of government, it doesn’t involve privatisation now. Any privatisation done in this period with a government that should have resigned, [with] a government that is operating in a caretaker capacity, would be seen as an illegal arrangement,” Jagdeo had said.
In June, Director General of the Ministry of the Presidency Joseph Harmon said the process was stalled no progress had been made. Government had previously announced several expressions of interest for the shuttered estates
“You had interest by several companies and because it [valuation of assets] took a little while, some of [that interest] would have waned and so we now have to re-establish contact with some of the parties who had expressed an interest in the first place. So that is going on,” Harmon had said.
The government has been strongly criticised for mothballing the estates without having a plan for their revival or for the thousands of laid off sugar workers. It had embarked on a privatisation drive for the estates and Harmon had boasted in November, 2017, that 70 companies had signalled interest.
By November of last year, only 10 expressions of interest had been formally received from five companies.
A Special Purpose Unit (SPU) of the government holding company, the National Industrial and Commercial Investments Limited (NICIL), had been created and entrusted with responsibility for four shuttered estates: Rose Hall, Skeldon, East Demerara (Enmore) and Wales. With the exception of Wales, the others were put up for privatisation.
GuySuCo is still operating the Albion, Blairmont, and Uitvlugt estates, which it has been charged with turning around.
PricewaterhouseCoopers (PwC) was contracted by the SPU and last year began doing valuations of the assets of the shuttered estates in order to secure prospective investors.
Following the completion of the evaluations, the SPU and PwC met with potential investors and 10 submissions were received for the three estates, with only five companies entering bids.
However, only three companies out of the five were evaluated because two failed to meet all the requirements.
PwC completed the evaluations of the three and submitted its recommendation to the NICIL Steering Committee in January of this year. The Steering Committee was charged with giving the information to government for Cabinet to make a final decision.
In February of this year, PwC Representative Wilfred Baghaloo had said that his company had done its part and it was up to government to decide.
In early March, he further said that there was no additional information from him at the time and it was the SPU that would have to speak on the way forward.
