Saturday December 29, 2018
Nine months later...
No clear plan for multi-billion GuySuCo bond – Workers’ Union laments
T
he Guyana Agricul tural and General Workers’ Union (GAWU) has raised concerns over the handling of the $30B syndicated bond meant to revitalize the sugar industry, and has criticized what it interprets as ‘no clear plan’ by the government on how they will proceed with the execution of projects under the purview of that budget. Komal Chand, President of GAWU, told the press that stakeholders and the public are yet to be made aware of the details underlining the government’s efforts. He said that GAWU is aware that Minister of Finance, Winston Jordan, said that the bond is meant to be used “…to acquire two co-generation plants; to upgrade existing factories to produce plantation white sugar; to build storage and packing facilities; and to contribute to two (2) years of general operational costs”. However, Chand said, there was no mention of investments in the cane fields to improve productivity. He said that in April this year, the then GuySuCo CEO, Paul Bhim, in a GuySuCo/SPU engagement, told GAWU that $11B would be spent on capital works across the three estates, with about 70 per cent of that sum being utilized in the fields. The GAWU President said that the union is concerned about whether there would be sufficient quantities of canes available, though they are supportive of initiatives in co-generation and white sugar. The union made note that State Minister Joseph Harmon had spoken at the end of October, of a plan submitted by GuySuCo to engender its viability, and that President Granger, in his address to the National Assembly on October 18, said that “a plan is being developed to boost production in the remaining East Berbice, West Berbice
GAWU President, Komal Chand and West Demerara estates”. Chand said, “We hasten to ask that between October 18 and 31, a span of 14 days, GuySuco was able to develop its plan and present it to the Administration,” which was, according to Minister Harmon, “underpinned by a 10-year supporting cash flow projection.” Chand said that on September 26, Agriculture Minister Noel Holder had said that he is clueless about the monies that were borrowed from multiple banks to finance the bond. “It seemed to us that apparently Minister Holder is out of the loop regarding the monies that have been borrowed which are backed by a sovereign Government guarantee and secured by the assets of NICIL – which incidentally belong to the people of Guyana. The Agriculture Minister’s tirade, as it were, is yet another demonstration of how the affairs of the country are addressed by the Granger Administration. It
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Kaieteur News
also, once more, brings into focus the Administration’s more than confused approach to the sugar industry generally.” Chand said that the union is in support of measures to improve the sugar industry, but only on the basis that measures are executed from credible and “well-thoughtout” plans. He said that the plans concerning the bond, borrowed with a sovereign guarantee, are very secretive. He urged the government to share those plans with the Guyanese public, and to have the necessary consultations with stakeholders who have interests in the betterment of the sugar industry. The monies for the $30B bond were raised by the National Industrial and Commercial Investment Limited (NICIL), an arm of the Government that handles investments. Earlier this year, NICIL successfully negotiated with a number of local banks and other financial institutions to raise the bond. The transactions were being handled by the Hand-inHand Trust with Republic Bank, and reportedly the Guyana Bank For Trade and Industry. At the end, the negotiations for what was considered the biggest facility of its kind, locally, NICIL managed to secure $30B The monies from the bond are to be spent on improving the factories of Albion, Blairmont and Uitvlugt, the three remaining estates of GuySuCo.
End tug of war between GuySuCo and NICIL – GAWU tells Govt. “The GAWU calls on the Government to apprehend the sad situation that is prevailing. It is time to end the tug of war!” It is the position of the Guyana Agricultural and General Workers’ Union (GAWU), that National Industrial and Commercial Investments Limited (NICIL) and the Guyana Sugar Corporation (GuySuCo) are engaged in a stand-off that could be detrimental to the health of the sugar industry. A statement by GAWU, from its annual end-of-year press conference, reads that the year “ends on a sour note, as there seems to be no clarity regarding that confusion that has surrounded the sugar industry”. The union noted that, at the end of 2017, the APNU/ AFC administration “substantially stripped the GuySuCo of its assets relating to the closed estates and transferred them without liability to NICIL,” and that the corporation’s shares were also transferred to NICIL. Earlier this year, there was some amount of confusion that the state-owned GuySuCo had two Boards of Directors existing. The situation left government officials somewhat embarrassed and signaled a deep divide in the Coalition Government over GuySuCo. The embarrassing situation started at the end of last year when as part of the restructuring, the four closed sugar estates - Skeldon, Rose Hall, Enmore and Wales - were all transferred to the stateowned NICIL. The idea was to place the assets of the estates in the
control of NICIL’s Special Purpose Unit (SPU) with the intention to divest and privatise them. At the end of last year too, the shares of GuySuCo, owned by the Government of Guyana, were placed under NICIL. It was reported that the life of GuySuCo’s board, under Professor Clive Thomas, had ended, and moves were made to appoint a new board. The government had made it clear it was unhappy with the previous board, which did not inform them of the decision to close three estates within days, leaving more than 4,000 workers without jobs. In February, a Cabinet Decision named Colvin HeathLondon as the new chairman of a youthful GuySuCo, with the other board members being Komal Singh; Verna Adrian; Fritz McLean; Rosh Khan (jr); George Jervis; Arianne McLean; Vishnu Panday; Annette ArjoonMartins and two executives from GuySuCo. Minister of State Joseph Harmon had disclosed that the naming of a new board was on hold pending some clarity and questions asked by Cabinet. From indications, there were strong objections by ministers within the Alliance For Change (AFC) faction who expressed fears over a possible fallout. It was explained how the situation of the “new board” under Heath-London, happened. A sub-committee of Cabinet in February dealt with the appointment of the new board. Sitting on that sub-committee were Ministers Carl Greenidge, Winston Jordan,
Joseph Harmon and Agriculture Minister, Noel Holder. According to Finance Minister Jordan, it was “decided unanimously” by all the ministers, including Holder, that the life of the board came to an end and a new board would be installed, headed by Heath-London. However, the appointments met with objections when it came to the full Cabinet. While that was happening, GuySuCo, in newspaper advertisements, announced the names of the new directors. Despite the shares of GuySuCo being under NICIL, Minister Jordan made it clear that he was not responsible for the GuySuCo portfolio. GAWU’s President, Komal Chand, said, “The clear confusion regarding sugar was also manifested when we saw musical chairs being played by the Ministers of Agriculture and Finance, with both gentlemen denying they had Ministerial responsibility for the industry. Then suddenly and without any forewarning, the Agriculture Minister announced he was in charge of GuySuCo though no explanation, as far as we recall, was ever provided as to how the contradictions were resolved”. Chand said that since, at this time, the livelihoods of thousands of workers stand in the balance, and public funds have essentially been mortgaged to secure the $30B financing, the confusion is discouraging. He said that the government has allowed the situation to meet this point, where there is infighting between the two sugar-management bodies.