Special NICIL unit to focus on GuySuCo privatization

Jul 09, 2017 News, http://www.kaieteurnewsonline....ysuco-privatization/

Government has announced that a special purpose unit will manage the divestment of the Skeldon Factory and other Guyana Sugar Corporation (GuySuCo) assets. The establishment of the unit will cost the government $130M.

The sum is covered under a supplementary provision on the Current and Capital estimates totaling $6.395B for the period January 01, 2017 to December 31, 2017, that was brought before the House for approval, on Friday evening.

The provision for the unit itself was sought by Minister of Finance, Winston Jordan.

The amount includes provision for employment costs, utilities, professional and legal fees, advertisement, office space, and operating supplies, furniture and equipment.

Minister Jordan told the House that the unit will form part of National Industrial and Commercial Investments Limited (NICIL).

The Minister explained that in the initial stage, the unit will focus on the divestment of the Skeldon Factory, following which the focus will be on any land that GuySuCo identifies for divestment.

The establishment of the unit removes the divestment and privatisation duties from GuySuCo. The Minister noted the sugar company will now be able to better focus its attention on its other restructuring efforts.

GuySuCo has embarked on a series of measures aimed at changing its declining fortunes. This entails the divestment of the Skeldon Estate, the amalgamation of the Wales Estate with the Uitvlugt Estate, and surrounding land for lease to employees. These adjustments mean that GuySuCo will be scaled-down into a more efficient entity that focuses on producing sugar to satisfy the domestic and foreign market, a government statement said.

In the last decade, the 17,000-plus worker state company has been facing blows, a situation made worse by the European Union’s decision to introduce a phased 36 percent cut to its price. The EU is Guyana’s biggest sugar customer.

Poor agriculture, aging factories, and the fact that the US$200M Skeldon factory, a flagship, 7-year-old facility has failed to perform, has contributed to the rapid decline of the industry.

Last year, amidst falling production and revenues, the Coalition Government closed Wales estate, shifting some workers to Uitvlugt, located on West Coast Demerara.

Two others – Rose Hall and Enmore – were recommended for closure with the new, under-performing factory, Skeldon, earmarked for divestment.

GuySuCo, despite the large chunk of foreign exchange it has been plugging to the economy annually, has another major problem. It has been sucking up billions of dollars in bailouts, a situation that the new administration says cannot continue anymore.

The Opposition, which has built its support from especially sugar workers, has been battling against the downsizing of the industry.

With regards to Skeldon, Government has actively been courting a number of investors. A team visited Guyana recently to inspect the operations.