Dear Editor,
On January 24, Stabroek News carried a letter by Joey Jagan in relation to the sugar industry (‘What is going on in the sugar industry?’). I wish to respond to some of the issues raised.
Before doing so allow me to thank Joey for the complimentary remarks he made about me. I appreciate them.
Over the past weeks Guysuco has been in the press and many remarks have been made about its performance. Joey is another in a long line of commentators. He has repeated the unsubstantiated remarks about corruption in the corporation and then proceeded to say that I, Donald Ramotar “…[am] not an anti-corruption fighter.”
For Joey’s information when the PPP/C took office then President Cheddi Jagan changed the nature of all state boards in our country. They became non-executive boards and not responsible for the day-to-day management of the business. Indeed the board is a policy-making board. It has only an oversight responsibility in relation to management.
However, being on the board brings a member into contact with many of Guysuco’s managers. Let me say that I believe that the vast majority of those people that I came into contact with are people of integrity and a hard-working and dedicated group. The local managers are very capable and all Guyanese should be proud of such a committed group. I must also add that I have worked with some of the best people I know on Guysuco’s Board.
I know that the corporation has been accused of having massive corruption, but I have not seen any evidence of the kind of corruption being spoken about.
Guysuco’s accounts are audited annually. The audits have been done by some of the top accounting firms in the country. At no time did any of those audits show massive corruption in the corporation.
I am afraid that such talk does not help the corporation.
One of the tools that Guysuco uses as a check to those contemplating corruption is its Internal Audit Department. This body constantly scrutinizes the operations and makes reports.
They have uncovered fraud from time to time, but nothing at the level that is being bandied around.
It is also nothing in relation to what we have seen happening with some of the commercial banks.
As to the state of the industry, let me say that in some estates we saw signs of neglect which the previous board of Guysuco dealt with, and corrective works have been done and are continuing.
Many of those problems have been uncovered due to the fact that the last board established an agricultural audit unit which picked up those issues and reported on them. This too is ongoing.
The present financial problems have nothing to do with corruption. They are due to a combination of factors.
In the first place they were caused by the large sums that Guysuco had to plough into the Skeldon expansion and the fact that it is still to come on stream. That has put strains on cash flow.
This project though, will come to fruition soon, and hopefully it will reach all of our expectations.
Added to this is the fall in the price of sugar from the main market in the European Union. In 2007 it was cut by 5%, in 2008 by 9% and this year the cut will be 36%.
The financial problems are also due to a fall in production caused by unfavourable weather conditions since 2005. The rainfall experience since then has caused a major reduction in opportunity days to carry out vital agricultural practices.
We must also admit that neglect took place at some estates that resulted in a fall in production.
In relation to paying the workers more, let me say I am always in favour of this. However, we have to deal with the question of affordability.
Having said that let me add that the unionized workers of Guysuco receive some 60% of its revenues as wages and salaries. This, I am sure you will agree, is not insignificant. I believe that no other company in Guyana is paying so much of its revenue in wages.
In conclusion let me say that I am very optimistic about Guysuco’s future; true, it is going through some difficulties, but it has the capacity to rebound. This is not the first time it has encountered problems.
I have faith in the ability of our workers to turn things around.
Yours faithfully,
Donald Ramotar
Mr.Donald people knows the situation with Guysuco,i like how you tried to paper over things.
Corruption is Corruption, whether it is small or massive. This is Politics for you, notice that Donald did not accept that there is any level of corruption in Guysuso all he is saying is that he is not aware of any MASSIVE corruption at Guysuco.
Large numbers of small corruption id equal to massive corruption Donald.
I think that Donald is not seeing farther than his nose.
Anyway, Donald please investigate the following 2 corruption events at Guysuco:
(1) The lost of a shipment of sugar from Skeldon.
(2) The selling of working lorries to friends of a certain individual at Albion categorised as scrap.
It is good that you now recognise that Guyana has adequate skills to magage GUYSUCO (after Booker-Tate failed). What the board has to do now is to listen to these people.
I attended board meetings and in the past all the board members seems to be qualified engineers etc and often go against advice.
Donald, Donald, Donald! You remind us of biblical Peter who was always so impulsive with his eagerness to to be the first to speak or do. Calm down.
The only reason why Jagdeo asked Robert persaud to mount a probe was because Jagdeo got word of misappropriation of funds. The probe uncovered more than misappropriation; it revealed what we now know about the abysmal failure of Guysuco with $3B in losses for 2008 and the concommittant failure of you, Donald, and Komal Chand, to recognize or detect the downward slide and try to stop it.
It is not good enough to admit neglect took place at estates, because you’re admitting failure on the board’s part. Yes sir, you failed the PPP and the people of Guyana by sitting there and doing nothing about the neglect other than detecting it existed. Now Guyscuo will not see a profit until the year 2015. Are you proud of your stewardship, sir? And you still want to run for President in 2011? What’s worse is that the President re-appointed you to the new board after the recent shake-up! What confidence!
And we still don’t know what’s the final status of the probe into the allegations of misappropriation of Guysuco funds, just like we don’t know the status of the Fidelity Polar beer scam.
I would like to comment on Donald Ramotar’s letter. Firstly, let me be clear that I like Donald Ramotar; I thing he’s a decent man. I do not like Joey Jagan so this should not be seen as a defence of him and definitely not a criticism of Donald Ramotar.
Mr. Ramotar mentioned a number of commentators in the press who have remarked on GuySuco’s performance. I am one of those.
I am glad that Mr. Ramotar does not come out and say that there is no corruption in GuySuco(“the Corporation”); he knows better.
The problem with the corporation as I see it is its strategic direction. Too much emphasis is placed on “faith”and “hope”, a hope and a prayer, if you like.
When the Skeldon Project was being planned, the projected unit cost for the new factory was eleven(11) cents. The Demerara estates were producing sugar at a unit cost of 17-18 cents. The world price was about 8 cents per pound. The management and Board were hoping that the world price would rise to above 11 cents per pound and praying that this would happen before the preferential pricing the Corporation received evaporated. In 2000, the world price of sugar actually dropped to less than 5 cents per pound. The business model does not work.
In the past few years, as we all know the price of basic commodities skyrocketed and remained at lofty levels until the global recession that is now gripping the world. GuySuco uses large quantities of steel and iron products for its punts, knives, and rollers etc. These were no doubt out of reach for GuySuco. The price and the needs of the Skeldon Project no doubt contributed to some of the neglect Mr. Ramotar mentioned. The Corporation also uses vast quantities of fertilizer …… price impact on cane cultivation and yield. It also uses large quantities of tires for its trucks and tractors ….. petroleum cost impact on price and purchasing ability.
The world price for sugar is today under 13 cents per pound. Can GuySuco compete with Brazil, Australia, India etc. I do not think so. IT WOULD BE INTERESTIING FOR GUYSUCO TO PUBLISH ITS UNIT PRODUCTION COST FOR ALL ESTATES WHEN YOU FACTOR IN THESE AND OTHER FINANCIAL BURDENS.
The time for diversification is way past. It should have started when the colonial masters left Guyana’s shores. All governments since then have failed the people in this respect.
It is one thing to say that you will not close any of the estates. It is quite another to close your eyes to the consequences of this demagoguery.
I would like to say that I hope and pray for a bright future for GuySuco but I am not particularly religious. Hope and faith are not needed. Practical and skilful management and strong decisive leadership are.
Donald you are a political appointee, no one cares about what you have to say. I notice you did not say anything about GuySuso importing sugar for use in Guyana.
Mr. Ramoutar simply stating that there is no corruption at GuySuCo is simply not enough, with all due respect there are a litany of examples that show where companies were being audited by top audit firms there was rampant policy violation, corruption and deception at every level.
Just take a look at Enron, MCI and several other large corporations that have significantly more oversight than GuySuco and they were able to get away with corruption for years.
So Mr. Ramoutar will have to do better than just writing a letter. There are widespread calls coming from several areas to open the books of Guysuco for public scrutiny. I agree whole heartedly that the books of GuySuCo as a public Corporation should be available to download by the people and they should be able to scrutinize the financials of the company.
So I challenge Mr. Ramoutar to open the books of the corporation to the Guyanese public if he is so confident that there is no corruption at GuySuCo.
Dear Donald there is no corruption anywhere, no place, any place in Guyana,see no evil,do no evil and hear no evil.
Question: Is the weather the new wipping boy of this government? It use to be the PNC 28 years in power.
Question: Why are the cane cutters always stricking? They always seem to get their way.
Question: Would Mr. Donald Ramotar know what corruption if it jumped up and bite him in his face?
Question: Didn’t the government know that they were not going to get the same price for all the time?
Question: Why is it that this nation never get a straight answer from ones in government?
Question: Why is it that no one other from the party faithfuls not the new board of Guysuco?
One more question: Since “There is no evidence of the ‘massive corruption’ of which Guysuco is being accused” is Mr. Donald Ramotar
surggestion there was corruption but it wasn’t massive?
Asking for evidence based on an allegation can be described as the defensive mode.Allegations,especially when it comes from multiple sources, is reason enough for the authorities to go out an seek the evidence and I am sure that this is not the first time Mr. Romotar has heard cooruption and guysuco in the same sentence.I am always taken aback when somebody from the government simply ask “where is the evidence?” when a citizen alleges corruption.I hope the police in guyana still believe that it’s their job to go out and get the evidence when a citizen alleges a crime was committed against them.
NAH!!! Citizens have to do the investigations themselves and then take the accused to court and prosecute them, all by themselves!!!! This is Guyana.
Don’t forget what Jagdeo and the COP said,a report must first be made for the police to do any investigation . That means no report, then no investigation.