Tussle developing over GuySuCo assets

Movement of machines and equipment from sugar estates billed to be sold or privatized to others that are functional is likely to cause tensions between the Guyana Sugar Corporation and government holding company NICIL as both sides claim they control the assets.

“GuySuCo has been moving out their machines from Enmore and Skeldon, which are proposed to be closed and taking them to Albion and Uitvlugt and but that is not right and it is possibly to slow down the privatization process of these two estates,” a source close to the industry told Stabroek News yesterday.

Efforts to contact Chief Executive Officer of National Industrial and Commercial Investments Limited  (NICIL), Horace James, proved futile as calls to his numbers were not immediately answered.

However, when this newspaper contacted GuySuCo’s CEO, Errol Hanoman, he said that he did not see why the movements of machines from the estates would be an issue since they are all under GuySuCo’s management.

“How can GuySuCo be moving machines without permission when GuySuCo is responsible for estates? At the moment GuySuCo operates all the estates. At this point all the estates are GuySuCo’s all the equipment are GuySuCo’s so I don’t know where this is coming from,” he said.

One Private Sector Commis-sion (PSC) source told this newspaper that they heard that equipment was being moved from the estates to be sold, in particular Enmore which that organization has showed an interest in, and the source felt it was to stymie government’s possible privatization of the estate.

“We heard that they are moving the stuff out to possibly lower the value of estates and make them less attractive to buyers…” the source said.

This newspaper contacted Chairman of the PSC Eddie Boyer who posited that GuySuCo should not remove assets from those estates set to be sold.  “Once you are privatizing you should not remove the items unless government approves because it is their assets,” he said.

But GuySuCo officials said that the PSC’s argument was “trash” because GuySuCo was a corporation and was thus free to move its assets around to maximize its profits. “If we bring a cane transport tractor that is not being used to its full capacity from one estate to another how is that trying to delay anything? They have already said that we are not doing enough and now we see ways to maximize our potential outputs and have taken moves to do so, tell me how is that bad?” he questioned.

The source said that cane “transport tractors and harvesting machines” have been removed from the Skeldon Estate and were scheduled to be used at “the very Enmore” but because of heavy rains workers could not begin using them. However, when the rain eases the machines will be used to their fullest capacity “in the interest of GuySuCo”.

This newspaper understands also that government had written to GuySuCo about shuffling of assets since while machines and other fixed assets are bought as GuySuCo’s they fall under management and the inventory of a specific estate. In this way when the selected firm conducts its audit of GuySuCo it will also be able to categorize each estate’s assets and worth.

Under its plans to “scale down” GuySuCo, government has outlined a scheme to consolidate its operations to three estates with three factories that would produce sugar for domestic needs and foreign markets, while divesting the company’s remaining assets, including the Skeldon Estate. Following the closure of the Wales factory at the end of last year, there are plans to shutter  the Enmore and Rose Hall factories this year.

Recently, the Special Purpose Unit (SPU) of  the government’s holding company, NICIL, announced that all of GuySuCo’s assets will be valued by an international firm  and a prospectus completed by the end of January  next year.

It was the Head of the Special Purpose Unit, Colvin Heath-London, who informed through a press release that the selected tender process for an Inter-national Financial Services Provider had closed.

The SPU’s plan comes in an effort to gear up for privatization and/or divestment of sugar estates.

The SPU said that selected tenders were invited from Price-waterhouse Cooopers, Ernst & Young, Deloitte and KPMG to provide services to the SPU as International Financial Services Provider and that all four accounting firms had responded.

It is expected that sometime next week the firms would be notified as to the winner and work should begin shortly after with the valuation of the assets and the preparation of a prospectus to be completed by the end of January 2018.

The selected firm’s scope of works would be to undertake the valuation of all assets under the control of GuySuCo, in addition to other advisory and financial services.

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