President Irfaan Ali yesterday announced that $5 billion will be injected into the beleaguered Guyana Sugar Corporation (GuySuCo) as the new PPP/C government moves to deliver on its campaign promise of reopening three of the sugar estates that were shuttered under the former APNU+AFC-led government.
Speaking at a press conference hosted together with Vice President Bharrat Jagdeo at the Arthur Chung Conference Centre, Ali said that the sum will enable the corporation to undertake much-needed investments in capital works at the grinding estates and start preparation for the reopening of the Skeldon, Rose Hall and Enmore estates.
“The assessment is continuing on all estates, so we will have to have capital investment on all estates to return to a situation where they can actually utilise the factories,” the president explained while noting that some of the money will go towards field preparation, while some would also go to families directly affected by the closures.
Ali stated that in the case of the Wales Sugar Estate, which was also closed by the former government, direct financial assistance will have to be given to families since that estate no longer has the potential to produce sugar.
“Direct help will have to be given for families who… suffered. For example, the Wales factory is completely gone, cannibalized, so we have to help those families,” Ali said.
He explained that the “Wales Develop-ment Authority,” a body that will have oversight of projects dedicated to improve the lives of citizens from the West Bank Demerara, is currently being developed and once on stream will assist families by offering special incentives to create opportunities for investment and job creation.
Meanwhile, Minister of Agriculture Zulfikar Mustapha last night welcomed the president’s announcement on the injection of $5 billion into the corporation.
He noted that while the input signals his government’s commitment to fulfilling their campaign promises, it also indicates that this new government recognises the importance and impact of sugar production on livelihoods.
“The last administration… allowed the sugar industry to fail miserably. They invested $30 billion into a bond but no capital works were done in the last five years. That has further deteriorated the sugar industry. I do hope that with this investment GuySuCo will be able to make some changes and increase their production level and aim to turn around the industry,” the minister said.
He further indicated that a Board of Directors will soon be installed and it will be tasked with ensuring that there are changes in the management structure of the corporation. This, he noted, is important to get the industry standing on its feet again.
Asked about the level of work that needs to be put into the closed estates, Mustapha explained that his visits were brief and he is awaiting a report from the technical teams to have a full understanding of what needs to be done before reopening the estates.
Recently, Cabinet approved a $600 million bailout to enable GuySuCo to meet its payroll obligations for the remainder of the 2020 fiscal year.
At his first press conference in early August, Mustapha had announced that the corporation required $1.6 billion up to the end of this year for capital and operational investments to stay afloat, as revenue generated from its sale of sugar and molasses would be insufficient to meet its financial needs.
The poor financial standing of the sugar corporation has already negatively impacted preparations for the first crop of 2021, the minister had said.
For the past five months, GuySuCo has been dependent on external funding to meet its payroll obligations.
GuySuCo’s three operating factories are in dire need of capital investments which has resulted in frequent downtime, the Agriculture Minister said, as he noted that the Uitvlugt Estate has been severely affected by mechanical issues.
“[The] Capital programme suffered from a lack of funding and will result in future crops being adversely affected. For this year from a budget of G$3.24 billion, the Corporation could only expend $82 million due to external funding not being made available,” he added.
GuySuCo recorded a shortfall of 9,461 tonnes in production for the first crop of 2020 from a target of 46,476 tonnes. Only 37,015 tonnes of sugar were produced.
The Second Crop for 2020 began during the week of August 7th.
A release from GuySuCo said that the target for the second crop is 69,480 tonnes of sugar. Operations at Albion and Blairmont will extend over seventeen weeks, while operations at Uitvlugt are projected to last for ten weeks.
In May, the corporation had made a request to the then-administration for $1 billion to meet payroll and operational expenses as Chairman of the Board of Directors John Dow appealed to then 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 needed funds to be able to survive after the second week of June, 2020.
Dow had told the then president that the Albion, Blairmont and Uitvlugt estates had been in dire need of upgrades and that considerable sums of money were required to fix the deteriorated infrastructure in the field, and 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.
