Nov 18, 2015 News
“Skeldon has turned out to be our very own humpty dumpty,” says Finance Minister Winston Jordan as he shared his thoughts on some of the blunders made in the sugar industry under the previous administration.
For years, under the People’s Progressive Party / Civic (PPP), the Guyana Sugar Corporation (GuySuCo) had been performing poorly, several sugar estates were failing to meet weekly and annual production targets. The management of the State-owned company, among other factors, was blamed for the industry’s poor health.
The Finance Minister in a recent interview opined that “nothing could possibly put this humpty dumpty (Skeldon factory) back together again.”
“I think we have remained silent on these issues for too long. Whether in hindsight or foresight, Skeldon was just a huge mistake. It had several problems compounding it as far as I am concerned.”
Jordan said that the major issue with the factory, in his estimation, would have to be the construction of the estate itself.
“I think that is perhaps a very major issue. The whole thing was not thought through properly anyhow. A significant part of its success in aiding in the improved production of the industry depended on private cane farmers planting cane to feed it. So even if Skeldon were working perfectly, there would still be the issue with feeding it with the required amount of cane, because a significant part of that cane cultivation would have been done by private cane farmers, and we would have had to bring a whole set of acreage under cultivation.”
Jordan said that in hindsight, one of the major issues, is trying to get the Skeldon sugar factory operating at the efficiency levels that were touted by the former administration.
“Skeldon can’t even operate at the efficiency levels of the old estates. So that is a real issue. Do you how much money has been spent on trying to bring back Skeldon? In trying to get it to do the things it was constructed to do? According to the figures I have seen, it is millions upon millions of dollars.”
He added, “We had the Indians and the South African consultants, among others here, to try and fix this one sugar estate, and then there was talk about bringing Cubans. I mean you would have run the entire gamut of consultants in trying to fix it. It’s the old humpty dumpty situation. All the kings’ horses and men couldn’t bring it to what it was intended or established to do. Skeldon is our very own humpty dumpty.”
The Finance Minister noted that for the year, there has already been some $12B that was transferred to GuySuCo. He stated that based on just direct cash transfers, over the past five years, there has been over $25B pumped into GuySuCo and that is excluding the loans being serviced by the government for the Skeldon Factory.
“It is government that is servicing those Skeldon loans, and it was supposed to be GuySuCo, from the projected increase it would have been making from increased production from Skeldon. So since GuySuCo cannot do it, we have to service it. GuySuCo does not have the money to do it. So you see, these are issues which have to be put out there, because I think it’s too long they were hidden.”
The Finance Minister said that the crux of the matter is that government will have to determine how long it would continue in this vein, that is to say, continued bailouts for the sugar industry.
“When you do this you keep postponing investments in other areas.”
Jordan asserted that loans for the construction of the $200M Skeldon Sugar Factory came from “all over the place,” as some were had from the Caribbean Development Bank and “the Chinese” among others.
“We are nowhere near paying off the Skeldon loans and we paid this year too. I would have to get back to you on the numbers, but we paid millions.”
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