Major rehab works for troubled Skeldon sugar factory

Major rehabilitation works including the redesigning and re-engineering of several aspects of the troubled multi-million dollar Skeldon Sugar factory are being planned and the Guyana Sugar Corporation (GuySuCo) anticipates a significant increase in production at the factory next year.

According to a statement from GuySuCo yesterday,  the entity is working with reputable international engineering experts and technical professionals in the area of diffusion technology as well as agricultural specialists and has identified the major factors that are preventing the estate from reaching its full potential and design capacity. In September last year, the corporation had  noted that a South African firm was assisting the entity in making the factory fully operable.

According to GuySuCo, the projects identified at the factory include, re-engineering the bagasse feed system, redesigning the cane conveyers, drilling of a new well, the replacement of a 5MW alternator as well as the modification of the pump dumpers.

The corporation will also build a section of an all-weather road as well as upgrade the drainage and water management system at the estate. Additional lands will also be converted for mechanized harvesting.

GuySuCo noted that its board members and management have been engaging the two unions, GAWU and NAACIE and workers representatives and they discussed a number of issues including the bolstering of production as well as the aforementioned rehabilitation projects at Skeldon.

The corporation stated that additional projects are anticipated during next year to significantly increase production.

The US$200M Skeldon sugar factory was unveiled by the government to boost production to 300,000 tonnes and over per annum, however the factory was plagued by numerous problems from the very start. The Skeldon factory was built by China National Technology Import and Export Corp (CNTIC) in what was meant to be a turn key project.

Work on the factory began 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. The turn key contract would have seen GuySuCo taking charge of its running after the commissioning. However, CNTIC remained on site trying to fix serious problems that arose.

The GuySuCo statement yesterday did not address at all what CNTIC’s role in these major works will be and why major redesigning and re-engineering was needed so soon after the commissioning of this flagship factory. Industry experts have said that CNTIC should have faced a range of penalties because of the late delivery of the project and should have had liquidated damages applied against it. Thus far, GuySuCo has not said what penalties, if any, have been applied against the Chinese company. There has been no information also on what its present role at Skeldon is. When CNTIC was chosen questions had been raised about its suitability as it was the first time it was building a factory of this type.

Before he demitted office, President Bharrat Jagdeo had vowed to take a personal interest in resolving the problems at Skeldon but it is unclear what actual steps he had taken.

The situation also took a dramatic turn on August 19, 2011 when then Minister of Agriculture Robert Persaud declared that GuySuCo did not have the competence to run the troubled 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.

Persaud’s appeal for the consideration of Indian and Chinese proposals did not proceed further after questions were raised as to whether a management contract for the Skeldon factory had been put out to international tender.

At the moment current sugar production figures stand at approximately 50,000 tonnes, a figure which is less than at the corresponding period last year, industry sources say.

The parliamentary opposition is likely to take an even deeper interest in the affairs of GuySuCo now that it has control over Parliament.

Notice has been served that APNU MP Dr Rupert Roopnaraine will be asking at an upcoming session of Parliament questions about the Skeldon factory and other industry matters.

The questions are:

(i)                 Can the Minister say when was the last Annual Report of GUYSUCO tabled in the National Assembly?

(ii)               Will the Minister make available the most recent audited accounts of GUYSUCO as a matter of urgency?

(iii)             Will the Minister make available the relevant documentation related to the announced financial release by the EU aimed to assisting in the upgrading/diversifying of the sugar industry?  Will he specifically provide the number of amounts of funds released and identify the projects in and outside the industry which benefited from these EU funds, and the related values?

(iv)             Will the Minister make available a copy of the current Strategic Turnaround Plan which is touted to inform GUYSUCO’s current operational programmes?

(v)               Will the Minister make an explicit declaration regarding the existing defects of the Skeldon factory as well as the resources needed, and being utilized, to remedy these defects, specifying the deadlines set?

Yesterday’s GuySuCo press release did not attach a cost to the Skeldon works to be done or how it will be financed. This year’s budget announced a large outlay to help the cash-strapped industry.

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