Dear Editor,
The November 6, issue of the Stabroek News carried a letter by Mr Anthony Vieira, which was critical of what I said about the sugar industry in an earlier interview with the same paper (‘Ramotar’s comments in SN’s interview were misleading’).
I wish to correct some of the inaccuracies in Mr Vieira’s letter. Before I proceed to do so, however, I must express my disappointment at the contents of his letter, which seem to be based on rumours rather than facts.
Mr Vieira stated that Walchandnagar, an Indian company, had offered to sell GuySuCo parts for the Skeldon Estate. This must be a mistake, since we are talking about a new factory. Mr Vieira went on to say in his letter that the said company had the lowest bid, but the previous administration had given the contract to a Chinese company at a higher price.
These statements are absolutely incorrect; this was not the case. When GuySuCo invited tenders for the construction of the new factory at Skeldon, there were three bidders – a Chinese, an Indian and a Japanese company. The Japanese company placed a very high bid. The lowest bid was from the Chinese company. Before an award was made, Booker Tate was awarded the contract to be the consulting engineers for GuySuCo. The Board felt that it needed to be advised by competent technical professionals. The consulting engineers worked along with the Board at every stage in this process.
These consultants also visited both China and India where they held talks with both the companies which tendered. They reported to the Board that all of the bidders were capable of building the new factory, and that they were ready to work with whichever company was chosen to execute the work. Clearly, with that advice from the consultants, price then became the most important issue to base the decision on. The Board went for the lowest bidder.
This project was awarded as a turnkey project. During the construction process, the Board was briefed at every meeting by its consultants. No payments were made to the company without clearance from the Booker Tate professionals. I can even recall that at one point, the then government took a while to reappoint the Board and management, therefore, had to bear the responsibility to oversee the project. The Booker Tate consultants were so confident about the success of the project that they allowed the company to send its workers home on holiday.
In passing, let me say that Mr Vieira, the APNU and the AFC, while they were in opposition were very antagonistic towards Chinese investors/stakeholders in Guyana. To date, they have never criticized the consultants, but used every opportunity to find fault with the Chinese company that was awarded the contract. It seems as though they were instructed by higher powers to do so.
Such an anti-Chinese stance must change. I hope they are seeing how the US, UK and the EU have been courting Chinese investments. I urge them to stop the onslaught against the Chinese if they want to attract investment in our country, so that the economy can grow.
These are the facts and I urge Mr Vieira and others to stop using gossip and rumour, most of which was started by the APNU, AFC and their friends in the media, as a basis for analysis.
Mr Vieira was particularly critical of my statement that GuySuCo was looking at more revenue streams, including production of ethanol. He was practically shouting that we should have gone to Brazil for this. While it is true that Brazil is the biggest producer of ethanol, they do not have a monopoly on the technology (they started in the 1960s). Today, many other countries are in the business of producing ethanol. Indeed, there are some Indian companies engaged in such processes in Brazil as well as India. The US also, is a big producer as well as other sugar producing countries. Therefore, where we procure such technology is not confined to one place. That would depend on where we could get the best deal, which may not necessarily mean from the inventor of the product. However, the main focus is that we should continue to push in that direction as fast as possible. I did not say that explicitly in the Stabroek News interview, but I suggested to both the government and GuySuCo to move as fast as possible in that direction.
I was aware that in an earlier statement on behalf of the APNU, Mr Vieira had suggested the closing of estates and using the land to grow tilapia. I want to urge him to abandon that notion, particularly now that he is a member of the Board.
He also seems to have gone into a frenzy when I suggested that GuySuCo and Guyoil could create a joint venture to blend the gasoline with ethanol to use in motor vehicles. The point I made then was that both those entities are state-owned and therefore, they could come to an agreement quickly. The negotiation process need not be prolonged. And yes, the ethanol has to be blended if it will be used in vehicles.
Like all those persons now trying to be critical of the PPP/C when in office, the financial crisis at GuySuCo is often referred to. But from that quarter, nothing is being said about the reasons for that situation. Let me briefly recap this scenario for Mr Vieira’s benefit.
GuySuCo is experiencing this situation for two main reasons. One was the severe flooding in 2005 and 2006 and the second was the change in the trading with the EU and ACP countries.
In 2005 and 2006, the fields on the estates were flooded for weeks due to heavy rainfall. In 2005, the Demerara Estates were the worst affected. In 2006, the Berbice estates feared the worst. These natural disasters cost the industry a lot in terms of revenue and other costs.
The other issue was the fact that in 2010, the EU slashed the price paid to GuySuCo by 36%. Few other companies could have survived such a financial tragedy.
In passing, let me point out that that the Board was anticipating this and this is one of the major reasons why it took the decision to build the new factory at Skeldon to produce at higher volumes in a bid to bring down unit cost. The Board, even though it anticipated the cut, did not expect it to take effect so soon (in 2010). Moreover, at that time, our country’s economy was doing very well. Rice, construction, gold, among other resources, were booming. That created a big competition for labour.
All of this tells us that the industry had to be restructured. The EU recognized that and agreed to assist the ACP countries to restructure their industries. A lot has since been done in this area. Conversion of the field is in progress and much was achieved at Skeldon and Enmore; however, more investments are needed for the factories.
Another important aspect of transforming the industry was to move from just producing raw sugar to creating other revenue streams such as a refinery, electricity generation, ethanol production, distillery, etc; the plan was to convert the industry into a complex. What is needed now is investment and government assistance to overcome the obstacles during this period.
The sugar industry can prosper and make an even greater contribution to the livelihood of its workers and the country as a whole.
It needs people at the helm who believe in sugar – therein lies the key to success.
Yours faithfully,
Donald Ramotar
