Govt. could hire foreign company to run Skeldon estate
- Persaud said offers in from China, India
The government yesterday bluntly admitted that the Guyana Sugar Corporation (GuySuCo) does not have the management expertise to run the Skeldon Sugar factory and is seriously looking at hiring either a foreign company (Chinese or Indian) to manage the estate.
The Minister of Agriculture Robert Persaud said that the success of the sugar industry rides on the success of the Skeldon factory, which was commissioned two years ago at a cost of US$181 million.
He was careful to state that the government has no intention of privatising sugar, as this was important both to the economic and social fabric of the country, with thousands of families depending on sugar for their livelihood.
The factory has been dogged by a number of problems and the main workers’ union, GAWU, has been agitating for the problems to be fixed so the factory could realize its potential. The Corporation had set the end of next year to get the factory going at full speed.
Minister Persaud said that GuySuCo needs to produce 300,000 tonnes of sugar annually to be profitable and Skeldon is being looked at as the answer to under-production that has been squeezing the industry of its juice.
The unde- production has been coupled with several industrial relations disputes that have been a major headache for the Corporation’s management.
It came as a surprise Thursday that the Corporation and GAWU inked an agreement for a 5 per cent salary increase that resulted from cordial negotiations.
It was the first time in 20 years that an agreement on wages increase was met without either conciliation or arbitration.
Persaud said that this was the kind of attitude and “partnership” that the industry needs to ensure its survival.
Last November, GAWU called for Skeldon factory to be closed down until the China National Technical Import and Export Corporation (CNTIC), the entity which constructed the Skeldon factory, fixed the problems.
Yesterday, GAWU President Komal Chand emphasised the Union’s concern about the Skeldon Project, saying that factory and field production needs to be ramped up. He said that field production should enable the estate to meet two-thirds of needed canes, with the remainder being provided by farmers.
Chand noted that both boilers at the factory are now working, but the Union is anxious for other defects to be fixed. He said that he did not believe the government or the corporation was paying enough attention to Skeldon.
The cost involved in the construction of the factory makes it the single largest investment in Guyana’s history.
The opening of the factory came just over a month before Guyana, and the rest of the nations of the African, Caribbean and Pacific (ACP) Group of countries, began losing preferential market access for sugar to Europe. The industry is also reeling from the reduced price Europe began taking for its sugar in 2006. At the start of 2010, the price cut went to the full 36 percent Europe imposed.
The sugar industry directly sustains some 18,000 jobs, and when that is multiplied to include their families, it means sugar supports one-fifth of the country’s entire population. Sugar exports account for as much as 20 percent of the country’s annual revenue.
The Corporation was targeting the end of this year to complete all land development and planting, and expects to have in this period the 1.2 million tonnes of cane required by the new factory. Estate cultivation of sugar cane will have to grow to 9,600 hectares.
The factory was constructed with a combination of self-generated funds and loans from the Caribbean Development Bank, the People’s Republic of China and the Government of Guyana. The Project Engineer was Booker Tate, UK Ltd and the Contractor was CNTIC Ltd.