The fact that there seems to be confusion over the amount of money that was received by the Guyana Sugar Corporation(GuySuCo) from the National Industrial and Commercial Investments Limited (NICIL) is questionable and mirrors the incompetence of the Government.
This is according to Opposition Leader, Dr Bharrat Jagdeo who was at the time referring to the $2B that NICIL claimed was disbursed from the $17B secured by Government from a $30B loan to GuySuCo, while the Sugar Corporation’s CEO, has been recorded in the media saying no such money was received.
“Clearly something is wrong if the acting CEO of GuySuCo doesn’t know how much money they have received from NICIL… This mirrors the incompetence of the Government…Only a totally incompetent Government will operate like this,” he said.
Moreover, the former President questioned what the remaining $15B, which is still sitting in a bank account is being used for.
“…the next question is what is happening to the remaining $15B that has been sitting in the account of a long while now since it has been raised…What is it being used for because we have not seen any statement from NICIL regarding the future uses, bearing in mind that we are paying interest on this large sum of money that was borrowed and is just sitting in an account,” he noted.
Days ago, the Special Purpose Unit (SPU) of the NICIL announced that almost $2 billion has been disbursed to the GuySuCo for operational expenses of its three estates-Albion, Blairmont and Uitvlugt.
The SPU, in a press statement, said that the release of these funds is in keeping with the plans of the coalition Government to make the sugar industry viable and to safeguard the future of the more than 11,000 workers.
However, this revelation came on the heels of GuySuCo’s Chief Executive Officer (ag), Dr Harold Davis Jr, telling the media that the corporation is slated to receive proceeds from the initial $17 billion the SPU has secured from the $30 billion bond facility.
Davis claims that GuySuCo had requested a substantial amount to advance its strategic plans, but monies received so far have catered only for wages and fuel expenses; and no other monies have been received.
On Sunday last the SPU said that the monies from the bond facility will be used to purchase equipment for production of plantation white sugar, including the purchase of nine tractors, and to address the co-generation plants’ operational expenses.
“The monies obtained from the bond facility were not obtained to facilitate the payment of debt, as was ventilated time and again by the Minister of Finance and stakeholders,” the statement said.
GuySuCo is yet to complete its procurement process for the mentioned capital items. Therefore, SPU has said, the entity is not in a position to draw down on additional secured funds.
Earlier this year, the NICIL was mandated to seek financing for the downsized Corporation, targeting retooling, diversification and improved agriculture. This was being pursued even as work was being done to privatise and divest the four estates — Skeldon, Rose Hall, Enmore and Wales.
Through local financing arranged by the Republic Bank Limited, NICIL has managed to successfully negotiate a bond facility for $30 billion, with significant input from the Finance Ministry.
The NICIL had requested $17 billion in the first tranche.
GuySuCo must submit its applications for financing to the SPU, and those are to be vetted to make sure they meet the approved criteria of the bond holders before financing is disbursed.
Two disbursements have thus far been made, one for $880 million and another for $1.1 billion.
NICIL, through its SPU, took control of the Skeldon, Rose Hall, Enmore and Wales estates when Government decided to close operations.
Jagdeo, has raised several concerns over the issuance of the multi-billion-dollar bond.
An economist by training, the Opposition Leader has said the general perception was that Government was raising $30 billion to spend on GuySuCo, on the remaining three estates.
However, the memo tells a different story, as it has stated explicitly that the $30 billion agreed to would instead go to long-term projects.
Jagdeo has also proclaimed that when spending of the $30 billion bond begins, it will substantially increase the demand for foreign currency and put pressure on the country’s reserves. He has said that from all indications, there has been an unbelievable shortage of currency at the Central Bank, and utilising this bond will contribute to this shortage.
Since the announcement of the bond, concerns have been raised about Government’s vision for the industry and the genuineness of its actions thus far, since that very $30 billion could have gone into restructuring the industry while keeping all of the estates open and GuySuCo’s workforce employed and engaged.
Some 5700 workers from Skeldon, East Demerara (Enmore) and Rose Hall Estates were dismissed after GuySuCo had terminated their employment in 2017. Before then, over 1000 Wales Estate workers were similarly dismissed when the entity officially ceased operation in December 2016.
These moves were in keeping with what Government has said were “cost-cutting measures”.