Funding of $30 billion (US$150m) is being sought for the sugar industry over the next four years, according to a statement yesterday from government holding company, NICIL and its Special Purpose Unit (SPU) set up to oversee privatisation of GuySuCo’s estates.
The funds, the statement said, will provide a much needed capital injection, support infrastructure maintenance and upgrades at the Albion, Blairmont, and Uitvlugt estates, which the state is keeping, and develop new co-generation capacity to support estate operations and sell to the national power grid.
The statement also said that the NICIL-SPU is collaborating with GuySuCo. There had been tension between the two sides recently over access to the estates and control over machinery among other areas.
Among key collaborative works between the two sides would be the restarting of the Enmore Estate to immediately cater for providing molasses for Demerara Distillers Limited, the statement said.
“The Special Purpose Unit (SPU) under the National Industrial & Commercial Investments Limited (NICIL), and the management team at GuySuCo have confirmed that the two teams are on the same page, working for the same goals under the leadership of the SPU,” the statement said yesterday.
Enmore was one of the four estates closed by GuySuCo last year as part of their plan to downsize the corporation.
However, the SPU said that it was concerned that there is cane in the Enmore Estate fields that needs to be harvested and processed since it represents significant revenue potential.
It explained that while the SPU will provide the management for the restarted estate operations, GuySuCo will provide the technical support and talks were being had to explore advance payments from DDL for the molasses to be produced.
“Demerara Distillers Limited (DDL), had voiced concern over the anticipated shortfall in molasses and its impact on their production and global market commitments. The SPU and DDL have been exploring the possibility of DDL investing in the current crops in the fields at Enmore through advance payments on molasses supply, and also participating in the management of the estate to keep it as a going concern,” the release said.
According to the SPU, PricewaterhouseCoopers (PwC), the international financial services provider working on the valuation of the GuySuCo assets now under the control of the SPU for privatisation, is concerned that in order to attract the best investors and secure the highest price for the estates, they need to be seen as fully functioning operations and facilities.
“Closed estates will not be attractive to potential investors. The deal with DDL, if approved by the boards of DDL and NICIL would allow the SPU to meet the PwC recommendations for a quality privatisation of the estate,” the statement said.
Sources told Stabroek News that DDL stands to be given preferential consideration to purchase the estate after PwC finishes its valuation work later this year.
That is because DDL would be given evaluation points as it is a Guyana-owned company that also has a Guyana recognized and trademarked branded rum, Eldorado, whose key ingredient is this country’s molasses, a byproduct during sugar production.
The company will also accrue points because of the guaranteed employment of locals and that it would already be familiar with the operations of the estate.
But an official of the Ministry of Finance reminded that while DDL may have an advantage over other companies, they would still be required to pay for the sugar assets according to valuations set by PwC.
“It would not be like giving away the estate to DDL for two shillings because of all of these factors. Yes it is a Guyanese company, yes it will employ workers…yes to a lot of things. But with all of that they have to pay their fair share to get the pie. This is no pie being handed to you,” the official said.
Meanwhile, the statement said that it was a NICIL decision to dissolve the old Board of Guysuco two weeks ago. However, the old Board is still forging ahead with planned meetings.
“The life of the board of GuySuCo came to an end on February 14 after the Board of Directors of NICIL, in a Special Board Meeting, made the decision to install a new board focused on the transformation of the corporation as envisioned by NICIL-SPU,” the statement added yesterday.
“The NICIL board also instructed GuySuCo to freeze all hiring and to not renew any employee contracts that are expiring at this time. NICIL has begun working with the management team at the corporation to implement management changes, some of these changes are already being implemented and more are expected to follow in the coming weeks,” it added.
Chairman of the old Board, Professor Clive Thomas, has planned a meeting with members tomorrow his Secretary told Stabroek News last week when contacted.
This newspaper had contacted Thomas’ office for an update on the affairs of GuySuCo but the secretary said that the Chairman informed that he would be in a better position to answer questions after the meeting.
This newspaper understands that the makeup of the new Board will be discussed at tomorrow’s Cabinet meeting.
While they wait on a new Board, both SPU and GuySuCo have pledged to work together with SPU Head, Colvin Heath-London saying, “The one thing that is paramount right now is that we work together. We must work together to ensure that we get the best deal from the process for the estates put up for privatization, and that GuySuCo is successful in turning a profit with the estates is has retained.”
For his part, acting Chief Executive Officer of GuySuCo, Paul Bhim, said that “the objective behind the closure of some estates was to make them available for privatisation and ensure that GuySuCo becomes profitable. The best way to achieve that today is for GuySuCo management and the SPU team to work together for the greater good.”