Chairman of the Guyana Sugar Corporation (Guy-SuCo) Dr Clive Thomas has said the commercialisation of key assets along the coast could provide much-needed revenue streams for the cash-strapped state company.
Thomas recently said GuySuCo is effectively bankrupt and its total debt stood at $82 billion at the end of July.
However, GuySuCo provides roughly 80% of the drainage and irrigation needs along the coast, according to Thomas, who thinks commercialisation of this function could begin the process of expanding its income streams.
Thomas said the corporation’s vast lands can also be commercialised. He indicated that under his tenure as Chairman land deals that are negotiated would be in favour of the corporation. In the past, he said, many deals were done to the detriment of the company.
Thomas said under his chairmanship the “cheap land deals” would not be considered and there would need to be transparent.
He also told Stabroek News that GuySuCo was still working out the details to reacquire the Skeldon co-generation plant which was sold to the National Industrial and Commercial Investments Limited (NICIL), a special interest company that was created to purchase Skeldon’s power assets, the Skeldon Energy Incorporated (SEI).
He revealed that the Skeldon plant supplies power to roughly 90,000 residents in the Berbice area. “Skeldon is a major supplier of cogeneration and, without the permission of the board or the authorities at Skeldon, the previous Chairman of the Board negotiated a sale of the Skeldon co-generating capacity to NICIL and that remains a subject of much contention because it has depleted the value of Skeldon because it is an important revenue stream,” Thomas stated.
“If you take that out of the equation, you are reducing, significantly, the income that can be generated out of Skeldon,” he added
Thomas stated that while US$30M has been already received there is still an outstanding sum that is needed to complete the deal.
He noted that a request was sent to the Minister of Agriculture to halt the sale and the full transfer to SEI, but that this process is likely take time.
The former power purchase agreement between GuySuCo and the Guyana Power and Light, which formed the basis of the arrangement by which Skeldon provided power to the grid, would need to be reworked as that arrangement was not in favour of the corporation either. When the co-generation plant was commissioned, then Minister of Agriculture Dr Leslie Ramsammy had stated that the agreement was done with the public interest in mind and many critics viewed it as a poor financial deal for GuySuCo, which would be burdened with sales that may not cover the cost of power generation.
Thomas said that there needs to be a move away from the traditions of the industry, but gave the assurance that this does not mean that GuySuCo would not be a sugar company; rather, it means the other assets would see growth. He said that many assets need to be “driven by profit” to be viable and successful ventures.
Thomas acknowledged that as an entire entity the sugar corporation was vast and riddled with debt, but major components could see significant commercialisation. He said coming out of the Commission of Inquiry into the sugar industry, GuySuCo needed to be treated like an assemblage of assets as opposed to an entire singular entity.
