Government on Monday approved an additional $1 billion for the Guyana Sugar Corporation (GuySuCo) as a part of its $47 billion supplementary budget.
The additional sum, Minister of Agriculture, Zulfikar Mustapha, told the National Assembly, will aid in the rehabilitation of critical areas that will put the corporation in a better position for production. However this $1 billion allocation did not escape the attention of opposition members, who for years have been questioning the government’s decision to pump money into a corporation which has consistently failed to turn a profit.
In defending the sum, Mustapha explained that the money will be used for the development of cultivable lands and rehabilitating machinery in the factories. He told the House that some 2,000 hectares of the 23,000 hectares of land that was abandoned at Rose Hall Estate subsequent to the closure by the APNU+AFC administration, has been put back into cultivation.
“We will continue to move up and pace with the work that we have going on…” the Minister said as he explained that the aim is to be ready to return to operation by the second crop of 2023.
To date over 1,500 workers have been employed, he informed the House while reminding the National Assembly that hundreds of persons were placed on the bread line.
“So these monies are critical funds to rehabilitate GuySuCo and we are seeing now because of the flood …in 2021. A lot of the areas, in the prime estates like Albion, many cultivation areas were damaged. Now we are retooling and trying to get enough cultivation, enough land under cultivation, so that we have enough cane and increase production,” Mustapha explained.
Leading the questioning on the monies requested for GuySuCo, opposition member and shadow Minister of Agriculture, Khemraj Ramjattan, asked for a breakdown of the sum. Mustapha explained that from the allocated sum Albion Sugar Estate will receive $363 million, Blairmont estate $76 million, and Rose Hall estate $561 million.
Ramjattan further probed as to whether the monies allocated, especially for the Albion Estate, will be spent between now and December 31, when the fiscal year comes to an end.
Mustapha in response said the funds allocated will be used to fix equipment that is currently non-functioning. The minister further explained that the works and services will not be procured from a third-party contractor but rather, will be done by mechanical engineers and staff from the operating estates.
In August of this year, GuySuCo had received an additional $3.4 billion to cover operational expenses and provide additional resources to support the sugar industry. And in the 2022 budget, GuySuCo received $6 billion to support its operations.
Since taking office in August 2020, the PPP/C government has injected over $17 billion into GuySuCo after campaigning heavily on resuscitating the sugar industry following the closure of several estates by the APNU+AFC government. Despite the constant injection of finances into the operations of the sugar corporation, there continue to be issues, the latest being a shortage of sugar on the local market. Although it denied such a shortage, the government recently offered sugar through the Guyana Marketing Corporation and in rationed quantities.
Mustapha, while answering a question from opposition member Jermaine Figueira, said as of October last, $12 billion has been budgeted for the operation of the sugar producer. Figueira also sought to question GuySuCo’s profitability from 2020 to present but his question was not allowed by Speaker of the House, Manzoor Nadir, who stated that they were focusing on a specific item which is the allocation of money to the corporation in the supplementary fund.
Changing the question, Figueira asked what amount of GuySuCo’s earnings were being spent on operational expenses. The Agriculture Minister quickly told the House the information was not readily available and could be provided in the future.
Fellow opposition member Volda Lawrence also took time to scrutinize the government’s increased allocation to GuySuCo.
“So what is happening at GuySuCo? You budget $12 billion, your total expenditure was $12 billion, but then you come here to the House and you got another $6 billion and you are here for another billion. So what are you doing with all this extra money if you have money to cover these expenses?” she questioned.
Mustapha in his response said the monies were spent on the rehabilitation of the existing estates and the shuttered estates, which they are working on to return to operation.
“A lot of money is being spent at Rose Hall. We have budgeted for the entire year to spend $12 billion but then we have to set up another set of equipment to ensure that we can continue with the tillage,” he explained.
He stated that some of the equipment owned by the corporation was set aside and left in the fields. This equipment, he told the National Assembly, is critical for field work for improved production.
“We have to do a lot of work like on the gantry. We have to do a lot of work on the punt dumper. These are things that are critical for improved production in the sugar estates,” he posited.
However, Lawrence rubbished the explanation and questioned the planning and budgetary skills of the corporation.
“Are you saying that in your planning for 2022, that what you are asking us, for this money to do all these things that were in the field et cetera and so on, that wasn’t in your plan? So it wasn’t in your plan what type of budgeting you are doing?” she pressed.
Mustapha countered by stating that the equipment had deteriorated badly over time. And as they work to rehabilitate and overhaul what is available, they keep discovering more equipment that needs to be rehabilitated.
“As you go into these estates and into these factories you are finding more and more equipment and more and more parts you have to rehab. That is why you have unforeseen budgeting. This is why you have to get the supplementary funding to spend on these estates,” he contended.
Concerning the allocation of $3.5 billion in August, Mustapha had offered that money would be expended to continue the recapitalization of the sugar corporation in keeping with the government’s commitment to revive the sugar industry. He added that at the commencement of the government’s term, estates were operating at 49% capacity and now they have been rehabilitated and are working optimally.
“We will continue to ensure that we make these factories more efficient, modernized and at the same time reduce the cost of production,” he said back in August.
