Originally posted by Gerhard Ramsaroop: The Problem with GuySuCo is the PPP Government!
Minister of Agriculture, Robert Persaud, has finally acknowledged that the Skeldon Sugar Factory investment is a failure. This investment amounted to about US$200 million in an economy with an annual GDP of about US$ 1.2 billion. As a percent of GDP this investment amounts to about 17% of GDP. This makes it the largest single investment failure since Guyana’s independence in 1966. Even the PNC did not accomplish a failure this gigantic.
The PPP Government is hustling to exonerate itself from blame, fixing same on a hapless GuySuCo Board and Management. Guyanese must not be fooled by this false claim. The collapse of the Skeldon Sugar Factory is squarely at the hands of President Jagdeo, Minister Persaud, and Donald Ramotar along with the cronies they appointed on the Board. The entire lot should bow out in shame if they have any sense of honour and decency!
The first cause of failure was the mis-advised grant of the contract for construction to the Chinese firm, CNIC, which had no experience in sugar factory building. The other failings included the acceptance of the factory as complete before the Chinese firm had proven to GuySuCo that it was fully complete and operational; the non-training of locals to operate the factory after the Chinese would have left; the stifling political interference which resulted in experienced, qualified and senior staff including agro-engineers and agronomists being forced out and being replaced by friends and supporters of the Government; the ill-preparedness in not expanding cane cultivation to feed the factory; and, the disrespect for sugar workers which has resulted in massive migration away from work in the Estate.
To solve this problem the PPP Government, fully backed by its Presidential Candidate, Donald Ramotar, a Director on the Board for some 19 years, plans to enter another management contract with either an Indian or Chinese company. Minister Persaud is quoted as saying that the Government was currently evaluating two proposals to manage the said factory.
The AFC sees this development as a grand opportunity for massive corruption. There is no record that any management contract was ever put to a public tender. Moreover, the AFC is aware that taxpayers’ dollars of nearly US$2.5 m would have to be paid to the contract manager per annum!
More significantly, the AFC has come by reliable information that the Chinese company identified is the selfsame CNIC, the same company that built the third rate, very high cost Skeldon factory, where the exploded boiler has not yet been properly fixed, the new cane dumper cannot function, and numerous other problems caused by poor quality components are being experienced every day! The maker of this defect-riddled 8400 tons cane per day grinding capacity factory, which has not yet achieved even half that amount for one day, is being evaluated as a potential contract manager!
Also, the Indian company being evaluated is none other than Surendra Engineering which has the contract for the US$10.0 m Enmore Demerara Gold sugar packaging plant, which plant recently exploded and killed a worker. That specific equipment has not yet been fixed and, in addition, the massive internal work on the factory upgrade to supply the bagging plant has not yet been completed. GuySuCo's technical managers have refused to accept this work despite political pressure to do so.
This same Surendra Engineering, obviously specially favoured, was awarded by the Ministry of Agriculture a contract for the recently tendered 8 big drainage pumps despite the fact that it does not make pumps at all! Surendra Engineering through another Dubai based front Company, Salim al Midah, was given the consultancy contract valued approx US$500,000 to provide the plan to upgrade Enmore and Blairmont factories. There is every indication of an unholy alliance between Surendra Engineering and key GuySuCo managers, directors, and politicos to huff all of GuySuCo's engineering projects including the one now to manage Skeldon, a task Surendra Engineering, like CNIC, is incapable of doing, both not having the history, experience and managerial capacity in running sugar factories!
The AFC is aware of very experienced and well known Indian and Brazilian consortiums which ought to be invited to give proposals to manage the Skeldon Factory and possibly to procure finances from their respective Governments to assist in doing so.
The AFC has crafted an alternative vision for GuySuCo that will assure simultaneous accounting and social profits for the people. We propose, for starters, a professional Board with no political interference; the incremental mechanization of the industry to avoid the almost slave-labour conditions workers have to experience; and, creating a captive market through our E10 framework in order to save the Demerara and West Berbice Estates, by the production of ethanol. Then we intend to seek foreign investments into developing alternative lands for ethanol production for export.
The AFC wants to make it clear that an AFC Government will not be fettered by the contractual terms of any management agreement entered into by the PPP/C Government and either CNIC or Surendra Engineering. A management contract ought not be entered into now but ought to await until after the elections.Source