Performance of State Owned Enterprises …GuySuCo a strain on coffers, GPL is another trouble maker

Dec 22, 2016 News

-But Guyoil lauded for performing “reasonably well”
By Kiana Wilburg

Of all the State Owned Enterprises (SOE), the Guyana Sugar Corporation (GuySuCo) stands out as a major

Finance Minister, Winston Jordan

strain on the Government’s coffers.
This is according to Finance Minister, Winston Jordan. He made this statement during his end of year press conference on Monday.
The Finance Minister asked to provide an assessment of the performance of SOEs and their collective impact on the economy and those which pose a strain on the national purse, did not hesitate to mention GuySuCo.
He recalled that from the time the coalition took office in May last year, it has shelled out some $23B into the sugar sector.
He said that this does not include the debt it would have serviced for the company, particularly in the case of the Skeldon Sugar Estate which is said to be built at a whopping US$200M. The factory was deemed by international auditors to be in a deplorable state.
“So we have a dead investment in Skeldon and it is producing little or nothing. Its future is pretty dark and it can’t generate the income to help repay the loans,” the Finance Minister asserted.
Another worrying situation that is developing sees GuySuCo in the untenable position of not being able to meet its own wages bill.
Jordan said, “If you couldn’t even meet your own wage bill, then the transfers we are making are not really adding value. They are helping to meet the payment of wages.”
The Finance Minister noted that the other trouble maker is the Guyana Power and Light (GPL). However that entity has benefitted from low oil prices and efficiency gains that allowed it to recover somewhat “in terms of the bottom-line”.
The Finance Minister said that GPL has also been able to make some payments on the loans that the Government had made to the company.
The on-lent arrangement is one whereby the Government obtains a loan; usually concessional financing from an international financial institution such as the World Bank or the Caribbean Development Bank, then passes on the loan principal to another entity, usually a State Owned Enterprise.
The Finance Minister said that $500M was already received from GPL with another $500M is budgeted for transfer.
“That gives us a total of $1B so it is glory hallelujah. It is a real turnaround from where we had to be giving them transfers, to one where they are retransferring,” Jordan stated.
But in all the gloom regarding some state owned enterprises, Jordan lauded the efforts of Guyoil.
He said that the entity has been performing reasonably well. The Finance Minister also stated that the company benefitted somewhat from price increases in the oil and as such, was able to make dividend payments in 2015 to the tune of $2B. He said that the money “came in handy”. He expressed satisfaction that Guyoil is poised to make another $1B.
The economist said that the state owned enterprise is one which is showing its worth, “We need agencies like Guyoil to really give effect to policies of the government.”
He lauded the company for always passing on to the consumers, Government’s measures which would see reduced oil prices.