GuySuCo unable to run Skeldon factory, says Persaud

-proposals from India, China being considered

Agriculture Minister, Robert Persaud yesterday said that GuySuCo does not have the competence to run the troubled US$100M Skeldon factory and he urged the corporation to speed up consideration of proposals by Indian and Chinese companies to run it.

It was a stunning admission by Persaud, in the wake of the government’s dismissal of Booker-Tate from management of the industry several years ago and their contention that GuySuCo would be able to run the much-vaunted Skeldon factory which has seen mishap after mishap.

Speaking at a GuySuCo-organised press conference yesterday at which General Secretary of the Guyana Agricultural and General Workers Union (GAWU), Komal Chand  expressed concerns about the performance of the multi-million dollar Skeldon operations, Persaud stated that he also shared similar worries about the state of the factory.

He said, however, that the operations are improving and “things are getting better” and, the Board of Directors of the corporation is assessing the proposals made by the Chinese and Indians. He declared “the reality is, and to be honest, GuySuCo does not have the competence that it perceives to manage the factory, not even Guyana does not have that expertise, [and] at the end of the day GuySuCo would have to find an arrangement.”

Persaud urged the GuySuCo board to speed up consideration and perusal of the two proposals to manage the factory, adding that the success of the industry lies in the performance of the Skeldon sugar factory performing at the level it should be. “Much more has to be done and to look at ways to better manage the industry,” he added.

His declaration is the first official announcement that the corporation would not be able to run Skeldon and that foreign management would come back into the picture.

Earlier, Chand noted that the union would like to see that the industry move forward on production. He said that “we want to emphasise our concern about the Skeldon factory,” adding that the factory needed to be running up to order.

Chand noted that two-thirds of the production at Skeldon is being undertaken by the estate operation while the additional one-third is being done by the farmers. “We note that there are issues at the factory that have been solved, both boilers are functioning, but we need to have it operating at its capacity,” he stated.

The union leader noted that it is important that the factory perform, since “if we don’t have it perform as it should, it would have a negative impact on the whole industry.”

“I want to urge the management of GuySuCo, the Ministry of Agriculture and the Board of Directors, to tirelessly see that it performs,” he said, while adding that he believed that they are paying little attention to the factory given its importance to the industry.

The performance of the factory has been severely criticised, with President Bharrat Jagdeo among the critics.

In October last year, President Jagdeo warned that the facility was not working anywhere near to its capacity.

‘This is a US$200 million facility… unfortunately, it’s not delivering the results we expected it to,” Jagdeo said. “They have too many mistakes going on there and I intend to fix it…it has to change,” he said. “We’re not going to make that sort of investment to have a few people mess it up,” he also stated. “So even if it means personally I have to get involved, I will get involved to ensure that it is fixed…that it’s delivering the kind of results that it should deliver, so that we can safeguard the sugar industry.” It is unclear what personal involvement there has been by the President since.

The Skeldon factory was built by the Chinese company China National Technology Import and Export Corp (CNTIC).  Work began on the factory in 2005 and it was expected that the project would have been completed by October 2007. The commissioning date was pushed back several times until the end of 2008. CNTIC was engaged in a turn-key contract which would have seen GuySuCo take charge of its running.

The decision to put construction in the hands of CNTIC had been severely criticised. The old Skeldon factory was rated at 92 tonnes of cane per hour while the new factory has the capacity to process 350 tonnes per hour, but is performing far below this.

An editorial in the Stabroek News of November 22, 2010 had said in part:
“… 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.”