Skeldon factory was set up to keep sugar alive – Jagdeo
Opposition Leader Bharrat Jagdeo met with a large gathering of Berbice sugar workers on Saturday, and made it pellucid that unlike the misinformation being peddled by the Government, the Skeldon factory was set up with the specific purpose to keep sugar going for years to come.
After listening to the plight of the families of sugar workers from Canefield in Canje and Port Mourant on the Corentyne in East Berbice, Region Six (East Berbice-Corentyne) on Saturday afternoon, Jagdeo urged the women to go out and support the call for Government to pay more attention to the sugar industry and the welfare of workers.
“The entire family should come out and protest! Bring out the children too!” the Opposition Leader urged.
Jagdeo refuted Government’s claim that, under the People’s Progressive Party (PPP) Administration, too much money had been spent on the Skeldon sugar factory. Noting Government’s claim that the entire sugar industry has to pay for the excesses of money spent on that factory, Jagdeo said: “The money spent on Skeldon did not come from the industry, it came from loans which the Government was servicing. If you net off the money you received from the European Union, you will see that the Government has put very little into sugar in terms of these loans,” Jagdeo explained.
He noted that from 1976 to 1996, the sugar industry was paying a sugar levy. “So, for 20 years it paid money into the treasury. It’s only in 1997 that we cancelled the sugar levy. And so GuySuCo [Guyana Sugar Corporation] made a positive contribution all those years. And this is based on Greenidge’s (Foreign Affairs Minister Carl Greenidge’s) own figures!” Jagdeo said.
Addressing the issue of the proposed closure of some sugar estates by the current administration, the Opposition Leader said, “If we spent too much on sugar, how is it that, in 2015 and 2016, the Gold Board lost $27 billion? That is more than the entire cost of the entire Skeldon factory. Banks DIH is suing the Government for $28 billion because of a decision they made to give DDL some tax write-offs. The lawsuit alone will cost us more that the cost for the entire Skeldon factory. How can they find fiscal space for those reasons and they can’t find fiscal space to help the sugar industry?” he asked.
He also reminded workers that, in the 1980s, Guyana had spent some $220 billion on the bauxite industry; and he said that in today’s dollar value, that money is equivalent to about US$1.5 billion (G$300 billion).
“That is what we put into bauxite, leaving out the community cost for electricity. Sugar made a contribution all these years. It is only from about 2007, what the world market changed and we had problems here too, that we started giving sugar some subsidy and help,” Jagdeo said.
He noted that $32 billion over a three-year period is affordable in a $700 billion budget in three years.
“But the President has made it clear, ‘I don’t want sugar on the books’. So now that he has said that, in spite of all that they are arguing about, they have to now close some estates, like they are planning (to do) at Rose Hall and Enmore and several of the cultivations. They have to do this because the President doesn’t want to spend a cent on sugar, although sugar only needs transitional help because it could turn around in the future,” Jagdeo explained to his audience.
The Opposition Leader noted that if GuySuCo were to reduce the amount of sugar it produces, production costs would become more expensive because of the inability to capitalize on economies of scale. He said that following a study of the local sugar industry, which showed that the Berbice estates were producing sugar at a cheaper rate than the Demerara estates, the then administration had taken a decision to increase sugar production at the Berbice estates. Hence Government’s decision to invest in the Skeldon Estate.
He outlined that in Guyana sugar is not a company, but an industry, hence Government needs to be more thoughtful when making decisions about the industry. “No viable decision can be made without a feasibility study,” he said. “So this is a political decision. The fact that they shut down the factory at Skeldon for the first crop (means that they are) in preparation for (its) privatisation.”
Jagdeo noted that the privatisation deal is being orchestrated by a close relative of Prime Minister Moses Nagamootoo, and that that individual’s involvement in the deal in likely coming at a cost. He noted that while Government has been saying that the Skeldon Sugar Factory was a bad deal made by the previous administration, the Prime Minister’s close relative is lobbying to have investors buy it.
Sugar workers from Wales Estate walked out of a meeting held last Friday with several Government Ministers, after they were plaintively informed that Government is unable to pay them their severance packages. (Guyana Times)