Crisis averted: Struggling GuySuCo gets $400M cash injection
– Govt. to establish COI to determine way forward
– EU set to release suspended 23M Euros
A US$2M ($400M) line of credit from the National Commercial Bank of Jamaica has been released and
expected to be transferred, thus averting a possible crisis at the Guyana Sugar Corporation (GuySuCo).
And it is likely that more cash will be coming in the weeks ahead that will help the industry through.
Updating Kaieteur News yesterday, Agricultural Minister, Noel Holder, said that the administration is leaning on a Commission of Inquiry to be convened shortly that will help determine the industry’s course in the future.
The fortunes of the sugar industry have provided one of the toughest tests yet for the David Granger administration since it won the May 11 General and Regional Elections with a slim margin.
Earlier this week, GuySuCo’s Chief Executive Officer, Dr. Rajendra Singh, in a bombshell announcement, told unions that the corporation had run out of cash and would be forced to close its Demerara and Berbice estates unless it received help from Government.
The new Government was caught unaware saying it was not initially informed. With the new Parliament yet to start, it just cannot release monies to GuySuCo.
GuySuCo wants $16B, which represents its shortfall, to pay suppliers, salaries and buy spares.
Earlier this year, it collected a hefty US$20M ($4B) as part payment for a US$30M sale of its Skeldon co-generation facility to the Guyana Power and Light Inc.
It has used up those monies, paying wages and salaries, the National Insurance scheme, union dues and contractors. It is still to collect another US$10M from this deal.
According to the Minister, the European Union which had withheld some (Euros) € 23M (over $5B) is also
GuySuCo’s Chairman, Shaik Baksh
likely to release the money once the new Parliament is in place and the oversight mechanisms have been established.
The EU, since implementing a phased cut amounting to 36 percent of the price for its sugar customers, has been lending financial assistance to help affected countries counter the effects.
However, in the lead-up to the May 11 elections, with Parliament suspended, the EU withheld the last payment which amounted to (Euros) €23M.
GuySuCo’s Board of Directors, chaired by former Education Minister, Shaik Baksh, has been under pressure to turn the fortunes around with little to show.
This year’s first crop which ended recently saw GuySuCo falling short of the 86,000-plus tonnes it had set, by some 5,000 tonnes.
Its Skeldon factory, commissioned only five years ago, has failed to reach targets producing dismally again for the first crop, recording a mere half of the 17,000-plus tonnes that had been targeted.
GuySuCo’s CEO himself had come out openly in support of the former PPP/C administration, mounting the platform as a candidate.
With the life of the Board of Directors running out on June 30, insiders say that it is highly likely that an entirely new one with experienced faces will be appointed.
On Thursday, Prime Minister, Moses Nagamootoo, was scathing in condemnation of GuySuCo’s performance
Dr. Rajendra Singh
saying that board should resign for its gross incompetence.
Reportedly sitting on the board are Baksh as Chairman; Dr. Dindyal Permaul, Chief Executive Officer of the Guyana Livestock Development Authority (GLDA); Keith Burrowes, Executive Chairman, Board of Directors, Guyana Office for Investment (Go-Invest); Badri Persaud, Managing Director, Guyana Oil (Guyoil) and Geeta Singh-Knight.
Burrowes yesterday released a copy of a resignation letter he had sent to former President Donald Ramotar since last year- his resignation was supposed to be effective May 31, 2014.
Badri Persaud was also a candidate for the PPP/C during the last elections.
The former Opposition, APNU and AFC, which is now in Government, had accused the board of being made up of political “square pegs”.
GuySuCo, the country’s largest single employer with over 16,000 workers, has consistently been in the red for a number of years, requiring annual bailouts.
It has also been selling cane-lands and properties to raise cash.