The Guyana Sugar Corporation (GuySuCo) is currently unable to pay workers their wages and salaries this month as it is still awaiting a disbursement of $750 million from government’s holding company, the National Industrial and Commercial Investments Limited (NICIL), a source close to the corporation has said.
This setback is likely to upset the start of the second crop, which is scheduled for next week industry wide. “This position will affect the corporation tremendously. With no money workers might not want to turn out for the second crop season. That will throw off production and the company will not be able to meet crucial production deadlines. There is an obligation to ship out sugar by the third week of August. If that is not done, they can lose the market,” the source told Stabroek News.
GuySuCo has been mainly operating through earnings from sugar and NICIL’s previous disbursement of $250 million.
With the recent disbursement, the sugar company was able to purchase some materials, such as fuel for the restart of the crop, and execute maintenance at its three factories. Wages were also paid from the sum. The source also indicated that GuySuCo’s dire financial straits could have serious consequences for next year’s production as it would not be able to adequately prepare by beginning land preparation and the purchase of fertilizers.
The second crop is scheduled to commence with grinding on Sunday at the Albion Estate, while Blairmont and Uitvlugt will begin grinding on August 1.
Production for the first crop this year fell short by almost 9,500 tonnes, according to the main sugar workers’ union, the Guyana Agricultural and General Workers’ Union (GAWU).
The corporation was aiming for a target of 46,476 tonnes from production at its three operable estates, Albion, Blairmont and Uitvlugt. Production had been extended at Albion and Blairmont by several weeks to reduce the shortfall and at the conclusion of the crop season 37,013 tonnes of sugar was produced.
“The information revealed that Albion produced 57.86 tonnes cane per hectare (TcH) as against a target of 77.59 TcH; Blairmont produced 69.90 TcH versus a target of 82.59 TcH and Uitvlugt produced 57.64 TcH compared to a target of 75.76,” GAWU said in a press statement last month.
Approximately a month ago, NICIL deposited $250 million to GuySuCo’s account, and had said that in the “very near future” it will make available a further disbursement of $750 million. NICIL had, however, cautioned that this can only be possible “when NICIL and GuySuCo can engage in solutions-driven discussions about making GuySuCo a commercially viable entity.”
This newspaper’s source, being aware of NICIL’s condition under which the remainder of the money can be released, said the sugar-producing corporation cannot continue to operate like this as it requires a steady flow of cash to keep the industry going.
It was pointed out that being given the money in parts does not allow GuySuCo to fully execute its maintenance at factories and fulfill other obligations.
NICIL released the partial sum to GuySuCo following a report in this newspaper stating that the corporation was on the verge of beginning layoffs, as promised funding from the government via NICIL had not materialised.
“We have not received any money yet from the government. We do not have an understanding of what is happening but it seems as if there is some undermining by authorities at the Ministry of Finance or at NICIL to get the money into the bank,” a source had told Stabroek News.
NICIL subsequently chided GuySuCo for what it referred to as “resorting to petty disclosures and half-truths in the press, none of which are providing the solutions to its myriad of problems.” It told the corporation that it should instead “seek to resolve its financial challenges through professional engagements with NICIL and by extension the Government.”
The two have been at loggerheads for months over the $30 billion bond and control of the corporation’s assets.
GuySuCo had said it was perturbed that NICIL had arrogated onto itself the responsibility of managing the corporation.
“The corporation wishes to inform NICIL that its managers are in no way abdicating their responsibilities to the holding company – neither for its operations nor that of the wellbeing of its employees. The managers of GuySuCo have a fiduciary responsibility which they intend to carry out.”
In May, Chairman of GuySuCo’s 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.
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.
The current APNU+AFC administration, which assumed office in 2015, has been criticised for its handling of the industry, much like the former government.
