With the administration having already given several billion dollars in subsidies and loans to the Guyana Sugar Corporation (GuySuCo), President David Granger has stated that Government can no longer bailout the cash-strapped entity.
Speaking on his weekly televised programme ‘The Public Interest’, the Head of State pointed out that the present model of the sugar corporation has failed, thus necessary and immediate changes need to be made to return the industry to a viable and profitable one.
“(GuySuCo) is the single, oldest and continuous industry in Guyana and it is haemorrhaging. Government cannot afford to keep on bailing it out. There has to be change, the very nature of the change is something that is still to be decided but the model that we inherited and the plantation model that we have used for three and a half centuries has failed,” Granger posited.
He told reporters on the programme which aired on Friday night, that Government is now looking at a more modern model for the industry because it recognises the impact GuySuCo has on the lives of Guyanese.
“We feel that there are some parts of the industry which could be made profitable. When you look at the cost of the Skeldon Factory, when we look at the closures which have taken place even under the previous administration, we have come to the conclusion that there’s got to be major change and that change has to happen in 2016,” asserted the Head of State.
Only Tuesday last, Cabinet was briefed by top GuySuCo officials on the current status of the corporation’s operations, as well as future plans. Following that engagement, Cabinet has established a sub-committee to look into the options proffered by GuySuCo about its future.
With Government adamant about having a final decision on the way forward with the sugar industry, the sub-committee is expected to submit its report by mid-November outlining what approach should be adopted.
At the post-Cabinet briefing on Thursday, Minister of State Joseph Harmon disclosed that among the options outlined by GuySuCo were to allow the corporation to run ‘as is’ or engage in limited diversification.
He further outlined that the corporation is of the belief that the worst option was to maintain the status quo, that is to say do nothing and allow the corporation to go as it is; since there would be serious implications for the national treasury, which can incur the cost of some $18.6 billion in 2017 and another $21.4 billion in 2018, just to maintain this option.
GuySuCo already has an excess of $80 billion in debt, notwithstanding the fact that only last week, the cash-strapped GuySuCo was asked to repay a loan of almost $4 billion which it received from Central Government as part of its $12 billion subsidy last year.
“Your Government was forced to divert money from economic development and social projects to rescue the ailing corporation with an immediate injection of $12 billion. An additional $11 billion had to be provided the next year, 2016, making it a total of $23 billion bailout in 18 months,” the 2015 Auditor General report had highlighted.
This comes in light of the International Monetary Fund (IMF) advising the Guyana Government to reduce bailouts to the cash-strapped industry, especially given that experts are saying that it is not a viable option. (Guyana Times)