Dec 31, 2008 News
Leader of the Alliance for Change, Raphael Trotman, is of the opinion that the recent revelations emanating from the Skeldon Sugar Modernisation Plant (SSMP) in light of the continued ignoring of warnings by the Opposition are symptomatic of a government that has outlasted its usefulness.
Trotman said that the government has become so in love with itself that every bit of advice proffered by any person other than government officials is seen to be negative comments to bring the Government down, “when in fact there are others that have the country’s interest at heart”.
The comments come in light of the recent revelations that the new Skeldon factory, as it has been commonly called, has been incurring losses to the tune of hundreds of millions of dollars, with another loss of US$3M being cast aside as irrelevant.
According to the AFC leader, “It is the most ridiculous, irresponsible statement that I have heard in a long time and leaves me to wonder what is happening in terms of GuySuCo, and what is the government’s policy that it could accept this level of loss without taking firm action.”
The AFC leader noted that, “I have never heard of a struggling industry that is losing money being able to say that a US$3M loss is irrelevant…No country, particularly a developing one with an industry on which the GDP rests such as in Guyana with the case of sugar, can claim that such a loss is irrelevant.”
He noted that for years many people who were au fait with the industry had forewarned that with the removal of the sugar protocol and globalization, “that we could not produce sugar below the world market price.”
Trotman said that the money would have been better spent rehabilitating the ‘old car (what GuySuCo had called the old factory),’ “rather than investing in a new modern plant.”
He noted that the government may be able to boast that it (SSMP) is the most modern plant in this hemisphere but if it is not producing sugar or revenue it means nothing other than being a fixture that adorns a section of the country.
“But the government was obsessed with having something that stood tall with stacks and chimney and bellowing smoke to point to, perhaps for electioneering purposes…Little attention was paid to the economic and social side because when it is that the factory collapses and jobs cannot be provided, the government will have to take the blame for it.”
The AFC leader said that the factory has now been revealed to be just an election gimmick, “because if you were forewarned and looking ahead at where the price of sugar was going to be and knowing in advance that you could not produce below the world market price, and knowing that the sugar protocol was coming to an end, there was no justification for going ahead and building a modern sugar factory.”
The AFC leader said that the Skeldon sugar factory has turned out to be the biggest failure and disappointment for the government for 2008, “given the amount of money spent…what it was supposed to do to reenergize the sugar industry and particularly provide jobs for thousands of sugar workers.”
He noted that for the country to be told that at the end of the year that the factory, “is still not running as it should…that millions upon millions of dollars have been wasted to get it going and cane is spoiling in the fields because it cannot be processed as well, the fact that the factory could not process it fast enough tells that it has been the government’s biggest failure for the year.” He said that one has to juxtapose “this” in light of other projects that could have been completed, “and I recently point to the Drainage and Irrigation and current flooding.”
Trotman said that some of that same money should have been invested in the “same old car which is now our lifeline and is now the factory seeking to salvage as much as possible in the region…
“We could have spent some of that money on social programmes to alleviate the financial crisis, health care, pensioners and education.”
He questioned also, how the government could be able to justify to the nation that the money was well spent.
Trotman again sought to stress the need for Guyanese to understand that the European Union’s sugar protocol which guaranteed Guyana a preferential pricing in that market has come to an end.
He added that to compound the situation further was the fact that there was an existing world economic crisis and world market prices for commodities such as sugar has fallen.
“In the near to medium term I do not see this factory bringing any economic benefit to Guyana…There was more justification in rehabilitating the existing factories making them more efficient…The greatest outrage is that this was known and told to the government…Where the price of fuel is and the price of sugar and the cut sugar protocol, it is impossible for the factory to sustain itself economically.”
He pointed out, however, that unfortunately the factory has already been built and as such he recommended that some kind of task force be formulated to review the entire function of GuySuCo and not just hire or fire a few people.
Trotman said that there is now a need to review the entire future of sugar in Guyana, “vis a vis what is happening internationally as opposed to what it is we have in Guyana in terms of our capabilities and what it is we are going to do with this colossal white elephant.”
GuySuCo, in a response to a recent Kaieteur News article pointing out the tremendous losses associated with the new factory, said that the US$3M lost in revenue during a test-milling operation was never budgeted for, nor was the money planned for by the sugar company. As a consequence, such loss is irrelevant, the company said.
Kaieteur News in outlining some of the problems existing at the factory had reported that the authorities passed some 50,000 tonnes of cane through the new mill, but the amount of sugar produced was a mere 400 tonnes.
A factory is expected to convert cane to sugar at a ratio of ten tonnes of cane to a tonne of sugar.
A state-of-the-art factory would have an even better ratio of production.
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