Skeldon factory to come under scrutiny as first sugar crop ends

As the Guyana Sugar Corporation (GuySuCo) looks to the end of its first crop for this year, stakeholders are mulling the cost effectiveness of the Skeldon factory.

President of the Guyana Agricultural and General Workers Union (GAWU) Komal Chand told Stabroek News that GuySuCo should be preparing to present the figures after the first crop total has been finalized. He said the cost of production has been reduced but not to the point where the factory is able to meet targets. Chand said that at the end of the crop the breakdown of the figures will have to be compiled and reported on.

During his 2014 budget address, Agriculture Minister Dr Leslie Ramsammy had stated that the intention was to have quarterly reports handed over to the National Assembly to keep stakeholders informed on the corporation’s financials.

APNU’s Shadow Minister of Agriculture Dr Rupert Roonaraine told Stabroek News that since Parliament reconvened he would be reminding Ramsammy of this commitment in writing. Roonaraine stated that Skeldon’s fiscal breakdown was a necessary part in understanding how well the industry was doing as a whole.

The first crop is estimated to be completed by the end of next week and Skeldon still has an additional 900 tonnes of sugar to make before it reaches it 2014 first crop target of 13,795 tonnes.

Traditionally, the first and second crop targets have been a 40:60 ration which means that Skeldon’s second crop target will be just under 35,000 tonnes.

Last year, Skeldon’s overall production was less than 25,000 tonnes of sugar, while the corporation’s total production was the lowest in 22 years with only 186,000 tonnes. The beleaguered factory produced approximately 6,000 tonnes during the first crop last year.

The factory’s continued poor performance is astounding considering that the Skeldon Sugar Modernization Project (SSMP) was the most expensive public project in Guyana’s history.

Estimated at US$110 million, the Skeldon factory, beset by numerous delays in completion, was finally commissioned in 2009; its cost had ballooned to US$200 million. However, it has never produced the 110,000 tonnes of sugar per year as had been touted and has been plagued with myriad problems over the years.

Last year the factory was rehabilitated, with work continuing into this year and according to GuySuCo, costing US$1.8 million. However, persons knowledgeable about the deal, have indicated that US$30 million was paid to South African firm, Bosch Engineering for rehabilitation inclusive of the condensate tank, bagasse scratcher and pipe support, one of the conveyor belts, the installation of a super heater and upgrading of the heavy duty knives used to crush cane.

Critics have noted that even with the huge sums invested in remedial work, the factory has not had enhanced production.

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