Int’l firm to value GuySuCo will be known by mid-December

Nov 21, 2017 News

– unions worry about asset stripping

Sharma Lalla, Consultant, Caribbean Sugar Industry Specialist (left) and Rikhi Rampersad, Managing Partner Deloitte Trinidad, at the meeting with their counterparts from the Special Purpose Unit (SPU).

Government’s special unit tasked with managing the privatization and divestment of the Guyana Sugar Corporation (GuySuCo) is making some rapid strides in moving the process forward.
Head of the Special Purpose Unit (SPU), under the National Industrial and Commercial Investments Limited (NICIL), Colvin Heath-London, yesterday announced that the second stage in the process of selecting an International Financial Services Provider (IFSP) was conducted earlier in the day.
The selected firm will be conducting the valuation of GuySuCo’s assets, with the reports expected in early in the new year.
Of the four firms invited to participate, in a restricted tender, three have met the October 30 deadline for submissions, a release from the SPU said yesterday.
“The three firms, PriceWaterHouseCoopers, Ernst & Young, and Deloitte, all made presentations to the NICIL/SPU evaluation team at the Marriott. KPMG which was also invited to tender did not make a submission by the deadline.”
Speaking after the presentations, Heath-London said that “the presentations were all very engaging and the firms all have the international and regional experience as expected. Each of the firms included persons with substantial experience with sugar diversification and privatization in the region, and as such the dialogue was rigorous and engaging.”
The SPU is expected to announce a selection by mid-December, it was disclosed.
The selected International Services Provider would be conducting the valuation of all assets related to the estates up for privatization and diversification, in addition to advisory, financial, and other related services.
Heath-London also indicated that the other preparations are on track to have the assets ready for privatization and/or diversification.
The SPU has been meeting with the management of GuySuCo as well as with other industry stakeholders including the unions – Guyana Agricultural and General Workers’ Union (GAWU) and National Association of Agricultural, Commercial, & Industrial Employees (NAACIE).
According to SPU, it has received letters in which both GAWU and NAACIE expressed support for its efforts to keep the estates operational in the interest of the economy and the workers.
GAWU General Secretary, Komal Chand, said: “From this encounter, it was heartening to have learnt that the SPU holds the view that the sugar estates identified for closure and divestment are capable of overcoming their difficulties and can be restored to a viable and profitable state. We also believe that such feats are attainable with a different approach being taken towards the industry.”
GAWU is also strongly contending that the industry’s success lies in its transformation from sugar to a sugar-cane industry.
“In such circumstances, the entire cane plant would be utilized to produce several products. Similar ideas, we recognize, are also held by the SPU,” the statement said.
“The unions also expressed concern over the reported moving of equipment from the estates set for privatization and diversification and urged the SPU to quickly safeguard the assets to ensure the best possible deal for these estates, the workers and communities they support.”
General Secretary of the National Association of Agricultural, Commercial and Industrial Employees (NAACIE), Dawchan Nagasar said: “In light of the interaction with SPU, NAACIE is of the view that the estates that were identified for closure/privatization/diversification are to be properly maintained, because of recent, GuySuCo has been moving a lot of assets from those estates that are identified for closure to those estates that GuySuCo will keep. Also, those estates that are to be closed, the fields and other areas have been deliberately abandoned and left to deteriorate.”
Nagasar added that the SPU should ensure that this practice is halted immediately.
“As you are aware, these assets are very important for the survival of the estates.”
The SPU also met with executives of the Private Sector Commission (PSC).
According to the unit, the Chairman of PSC, Edward Boyer said that the organization is impressed.
“In terms of the SPU’s approach to divestment and diversification, we believe that the PSC and the SPU are on the same page.”
Boyer added: “We just cautioned the SPU that there should be full accountability and assessment, by a credible international firm, of the assets of the GuySuCo estates that are being put up for privatization and diversification. This assessment should include the goodwill and all of the community services that are provided by the estates. We need this to be done up front and not repeat the Wales experience where the estate was closed and then an assessment was being done.”
Following its assumption to office in 2015, the current administration started to stem the bleeding of GuySuCo which was demanding cash bailouts from the state treasury.
The entity, once the country’s biggest foreign exchange earner, has been a drain on the economy now producing sugar at almost three times it is selling for.
The Opposition’s People’s Progressive Party, with a major support base in the sugar industry, has been objecting to privatization.
GAWU, too, which had traditionally been a major support of the PPP, have been expressing worry.
Last December, Wales Estate on the West Bank of Demerara was closed, with Rose Hall and Enmore announced to be shut this year.
However, the closure of the latter two has been halted till next year, Government recently confirmed.