If nothing else, the thoughtless seven-day strike of sugar workers called on Friday by the Guyana Agricultural and General Workers Union will focus the nation’s attention on what is fast proving an intractable matter – the myriad problems being experienced with the flagship Skeldon factory.
Guysuco’s inveterate challenges have been known for a long time. The proportion of its revenues allocated to wages is too high, its cost of production has to come down, its lucrative markets in Europe have lost lustre, value-added production is minimal and disenchantment has overtaken sections of its workforce.
These agonies have been compounded many times over by the dismal outturn from the Skeldon factory and its recent problems which have ranged from an exploding boiler to worn-out hammers and everything in between.
The problems prompted GAWU on Thursday to make the startling suggestion to Guysuco that it shut down the Skeldon factory for remedial work to be done. GAWU is undoubtedly under enormous pressure from workers to extract more from the corporation which is patently not in the position to do so and therefore the union is applying pressure in relation to the most obvious sore point.
While Guysuco may in time return to healthy profits if market and field conditions change, it won’t be able to do so if the Chinese-built Skeldon factory continues to misfire and remains a drag on scarce resources.
The new Skeldon factory is the centrepiece of the massive investment – prudent or not – by the government to keep the sugar industry going. Without its projected output and cost savings the ambitious plans for sugar will disintegrate.
As pointed out by GAWU the situation is dire. The factory – a turnkey project by CNTIC – had already been far behind schedule when it began to experience debilitating problems which have persisted. Though effectively in the hands of the sugar corporation, the factory is yet to be completely handed over by CNTIC because testing remains to be done. As per agreement US$11M is being held until all of the problems are straightened out.
The government will eventually be answerable as to how and why it arrived at the decision to make this massive injection of scarce resources into preserving sugar. It will also have to answer as to why the procurement process accepted CNTIC as the contractor for the project when there were more experienced interested bidders.
However, the real quandary at this point is what will the corporation do about the Skeldon factory? Members of the public have a right to know and should be hearing this clearly from those who have taken lead positions on this matter: President Jagdeo, Agriculture Minister Persaud and the Chairman of the board Dr NK Gopaul. It is also of note that the front-running candidate for the PPP at the next elections, Mr Donald Ramotar, has sat on the board of Guysuco since the PPP/C took office.
The public must know the full truth about this gigantic project and how its numerous problems are going to be tackled. What penalties are ascribable to CNTIC for its failings and have any been assessed so far? Are the factory defects remediable? Is it the case that defective and cheap components have been fitted into this huge factory? Should CNTIC be completely disengaged from the project? When will the mind-boggling mismatch between available canes and operation of the factory at full capacity be remedied?
Having assumed full control of the industry with the ending of the Booker Tate contract, the government must now take complete ownership of the problems and level with the people. Two years of an ambitious blueprint steered by a board of handpicked persons that the government is very comfortable with have not brought the results that have been promised. The government should immediately revamp this board to include someone from here or abroad who is intimately knowledgeable about the operations of a factory like the one at Skeldon – that is the single most pressing need at the moment if this blueprint is to work. Forget the financial wizards on the board. They could hardly conjure up sugar from burnt cane waiting and waiting to be ground by an ill factory.
Unless the factory problems are immediately addressed, the hullabaloo created will mask the other problems that the union and its members should be answerable for such as attendance, productivity and proclivity to striking at the drop of a hat. It also deflects from other important tasks such as the continuing search for markets, adding value and growing and protecting the brand of sugar sold.
The Skeldon factory now has the potential to be the biggest white elephant scandal the country has ever seen. It will, in the remaining months of this administration, provide a stern test of its mettle.
