Use GuySuCo’s $30B bond to raise sugar workers’ wages – Jagdeo

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Opposition Leader Bharrat Jagdeo has invalidated Government’s claims that it cannot raise the wages of sugar workers, saying that adequate funds can be readily available to provide the much-needed increase.

Workers across the sugar belt were last given a wage increase in 2014. With mounting calls by these workers for a wage increase to be given, Government has indicated that they are not responsible for such a wage hike, but rather, the Guyana Sugar Corporation (GuySuCo) Board will have to decide.

During his weekly press conference on Thursday, the Opposition Leader posited that this claim is misleading since the coalition administration has made far crucial decisions for the company in the past.

Opposition Leader Dr Bharrat Jagdeo

“There has been a call for a salary increase for sugar workers by GAWU and I’ve seen the prevarication in the Government as to why they cannot do this… It is disingenuous to argue that the board has to make that decision when the board has made every decision for GuySuCo, from the closure to the sending home of the staff, to the transfer of their assets, to the raising of their bond,” he asserted.

According to the former Head of State, financial backing can be supported through the $30 billion GuySuCo bond which was guaranteed by the State and National Industrial and Commercial Investment (NICIL) assets for the recapitalisation of the sugar sector. Government has also earned money from the disposal of assets from the company, which can also be utilised to benefit the workers. This eliminates any need to return to Parliament or dip into the Contingency Fund.

File photo: Another set of retrenched sugar workers

“This Government has stripped the assets of GuySuCo and transferred the assets to NICIL and they are busy disposing a lot of these assets for which they earn money. They also pledged these assets and raised the bond. I think $17 billion of the $30 billion has been disbursed to them and it’s like a black hole. The country, nobody in Guyana know how they’re spending this money,” Jagdeo shared.

He guided, “They do have the money there, raised for GuySuCo on using GuySuCo assets as the pledge which was transferred to them. Why can’t they use some of these resources? They don’t have to go back to Parliament. They don’t have to use the Contingency Fund. It doesn’t have to be part of the budget. They can easily transfer some of the money that they’re sitting on, paying 4.75 per cent interest on…They could easily transfer it to GuySuCo and finance the salary increase. In the fight between GuySuCo and NICIL, they said they have been transferring some money to them so this is nothing”.

After the announcement of increases for public servants, sugar workers from operating estates picketed that they too should be given a wage increase. They contended that it has been far too long while the cost-of-living has risen significantly within the last few years. Their last increase would’ve been provided under the previous administration – the People’s Progressive Party/Civic.

Since the closure of the four estates, leaving more than 7000 sugar workers jobless, Government has moved to divest the facilities. United Kingdom company PricewaterhouseCoopers (PwC) was subsequently contracted to carry out valuations of GuySuCo’s assets up for sale and had invited expressions of interest from potential buyers, though it was recently revealed that the political climate has stalled these transactions.

As of December 31, 2017, all of GuySuCo’s assets were transferred to NICIL. The operations of GuySuCo are being managed by the Special Purpose Unit (SPU) of NICIL.

The $30 billion was raised solely on the Government’s promise to repay investors within five years if the money is not repaid by NICIL. It was recently revealed that the bond represented one of the largest financial transactions in the Caribbean, mainly due to the Government’s guarantee. The bond also comes with a 4.7 per cent rate of return for the investors.

In June, the National Industrial and Commercial Investments Limited (NICIL) said it had disbursed $7.42 billion to the Guyana Sugar Corporation (GuySuCo) in nine payments. According to the agreement between NICIL and Hand-in-Hand Trust Corporation as the Trustee, the first tranche payment of $16.5 billion from the bond was to be used for a long-term project and capital financing for GuySuCo.

Specifically, the money was to be used to acquire two co-generation plants, upgrade the existing factories to produce plantation white sugar, build storage and packing facilities and to help pay for two years of general operational costs.