The Guyana Sugar Corporation (GuySuCo) will need approximately $1 billion if it is going to keep its doors open and prepare for the second crop.
This is according to a statement released yesterday by the Guyana Agricultural and General Workers Union (GAWU) which also said that the corporation is likely to exhaust all its cash by this weekend and called on the National Industrial and Commercial Investments Limited (NICIL) to honour its promise of funding the corporation.
“When we asked about the promised release of resources from the Government-holding company – NICIL – our sources confirmed that, so far, none of the touted monies have been released to the sugar company. Persons in the GuySuCo, we have learnt, are very anxious, at this time, considering production has halted and income from the sales of sugar and molasses have ceased.” The union referred to a source who had indicated that if NICIL does not release any monies soon, GuySuCo will be forced to “close its doors.”
GAWU went on to state that they were informed that with several more weeks before the second crop commences, the industry requires about $1 billion to meet wages and salaries expenditures while additional monies are required to meet other operational expenses. The next crop is scheduled to commence at the end of July.
“There are some worries that in the absence of sufficient funds, the Corporation may not be able to purchase sufficient fuel to operate its pumping stations. If this becomes a reality, we could see several villages being flooded should the rainy season persist. We have learnt that the Corporation is seeking the assistance of the National Drainage and Irrigation Authority (NDIA) to avert such disaster,” GAWU added.
Sources however told Stabroek News that the statement is not completely true since there is an existing agreement between the two agencies to maintain drainage and irrigation and it is not likely that GuySuCo will be unable to execute its duties.
GAWU said further, “Thousands of lives hang in the balance and the need for urgent intervention is needed. Of course, such assistance is denied arising from the naked attempts to thwart the will of the people and preventing the installation of a legitimate Government.”
Despite a promise from caretaker President David Granger, that funds will be provided to keep GuySuCo afloat, these are still to be deposited into the company accounts, a source at the company confirmed to this newspaper.
Averted
GAWU, like GuySuCo, is hopeful that this matter could be addressed soonest and that disaster could be averted, stating that it remained most concerned about the “heartless treatment” of the sugar industry by the now de-facto administration.
Granger, earlier this month during a media engagement had announced that the much-needed money will be provided to GuySuCo.
“As the Ministry of Finance announced, we have made arrangements for money to be available this week… this is considered as bridging finance,” Granger said in a DPI report.
De facto Minister of Finance, Winston Jordan, was tasked with providing the money to the company.
GuySuCo over the years has been facing a financial crisis and back in 2015, at the time of the change in governments, the company had announced that it was in need of a bailout.
A source dismissed claims by GAWU that the corporation will not be able to meet this month payroll due to insufficient funds.
Yesterday’s edition of Stabroek News reported that NICIL is still pursuing investments on behalf of the corporation.
Even with this and a $30 billion bond of which GuySuCo has accessed over $9 billion, the corporation is still in dire need of financial assistance.
Chairman of the Board of Directors John Dow had written to the president seeking an urgent bailout to alleviate the crisis the corporation is in.
The union stated that in a letter dated May 15, Dow appealed to President David Granger “… to use your good offices to arrange for funding to prevent the impending closure of the Industry.” In the letter he also said that GuySuCo needs funds now to be able to survive after the second week of June 2020.
With a backlog of $2.1 billion owed to creditors, Dow said creditors are unlikely continue to grant further credit.
Liability
A source told Stabroek News the current financial crisis also prevents them from accessing loans from financial institutions as the four estates which were closed under Granger’s administration remain a liability to the corporation.
According to a source in an earlier report, the corporation’s potential to access these funds is severely hindered as these estates’ liabilities remain on their books while NICIL’s Special Purpose Unit (SPU) would have absorbed their assets.
“The liabilities of Wales, Enmore, Rose Hall, [and] Skeldon Estates needs to be removed from our books as this has put GuySuCo in a bad position to access financing to advance our business as it shows we are still bearing all the financial obligations for these estates. NICIL needs to accept these liabilities as they did with the assets. If that is done, GuySuCo will be in a better position to possibly access finances for the three estates,” the sources said.
Dow had said in his letter to the president that because of the company’s financial situation they are unable to forge ahead with business development plans.
He lamented that talks between NICIL/SPU and the corporation remain in deadlock as the holding company for government assets remains unmoved and unwilling to release any funds to advance and develop the industry.
“Recent interactions [GuySuCo/NICII-SPU] indicate that little or no further funds are likely from this source in the near future,” Dow opined as he made reference to the $30 billion bond being held by NICIL.
Dow had told the President that the current estates – Albion, Blairmont and Uitvlugt – in 2015 were in dire need of upgrades and that considerable sums of money were required to fix the deteriorated infrastructure in the field, in particular, bridges, dams, revetment repairs and to provide for replacement equipment in field tractors, drain-digging equipment etc and factory pumps, motors etc. He explained that considerable sums were, and still are, required as a result of the neglect to provide the routine capital required for many years prior to 2015.
