Latest update April 17th, 2024 12:59 AM
Jan 22, 2016 Features / Columnists, Peeping Tom
It is not for GuySuCo to save its Wales Estate and prevent close to two thousand workers from being put on the breadline. It is for the government to come up with a solution to save the estate.
GuySuCo, from a financial point of view, has no other option than to let Wales Estate go. The sugar corporation is in dire straits and therefore has some hard financial choices to make.
But it knows very well that it is not Wales alone that is losing money. All the estates are in the red, and therefore by the logic by which Wales is being shut down at end of this year, all other estates should also be shut down.
It is for the government to save Wales. It will cost the government about 1.6 billion dollars to do so this year. It is costing the government many times more to provide dog-cheap electricity to Linden. The subsidy required to save Wales and its close to 2,000 jobs (including employees working for private cane farmers) therefore cannot be such an onerous burden, more so now that there is a government in place that said that corruption under the PPP was robbing the country of billions.
These billions should now be available to subsidize and save the jobs of the workers of Wales, until a privatization deal is obtained that will save the country.
GuySuCo is in deep debt. It cannot extricate itself from that debt, but it does have sufficient assets, including lands, to cover its indebtedness. It need not be a burden on the Treasury for too long.
However, it has to let go of dead weight. Wales has been a dead weight for a long time. But you simply do not close down a sugar estate as major as Wales just like that. It will affect not just those employed, but also those that depend on them both directly and indirectly. We are speaking here of about 10% of the population of Region Three. This is too great a burden for that Region to bear at this time, when the economy is barely showing growth.
One and a half billion dollars is not a great amount to spend to save the jobs and the economy of Region Three, until such time as a plan to privatize the industry can be found. The decision of the government was too precipitous and rash.
The PPP is milking this misstep by the government. The PPP says that it had been prepared to give some 16 billion dollars to the sugar company this year, far more than the present bailout package. It says that it would have kept the industry afloat because of the social fallout and the value of even a loss-making industry to the economy.
There has been no major investment since the new government came in. New agricultural jobs have not been created. Until this is done, it is wildness to simply put 1700 mainly agricultural jobs out of commission
Leadership is about making difficult choices. The new government has a difficult choice to make. It cannot simply subsidize Wales forever. It cannot subsidize sugar indefinitely, but it can keep it afloat until steps are taken to privatize the industry.
The Wales Estate is not like pavement vendors who can simply be removed from where they are selling and put somewhere else. Wales’ workers cannot go to Leonora. It is too far away. They will need transportation to and from the fields. This may be too costly for GuySuCo and inconvenient for the workers. The experience of Diamond workers was that not many of them were willing to work LBI-Enmore. The distance was too far.
The private cane farmers cannot also grind their canes at Leonora. It is too far away. They will run bankrupt. Many of them have loans at the bank and they have put up their properties as collateral. They stand to lose all of this. This will exaggerate the financial impact on the Region.
The government should agree at least to bring in a consultant to study the overall financial impact on the economy of Region Three as a result of their decision to close Wales. I am confident that any professional study will find that the cost to the economy will be in excess of the $1.6 billion that GuySuCo is expected to lose this year by holding on to Wales.
The closure of Wales must therefore be seen in terms of its overall impact on the economy. It is not simply a case of GuySuCo shedding some of its feathers.
The closure of Wales has serious economic consequences that the government has not considered carefully. It is time for more sober judgment, not wild actions.
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