GuySuCo – Incompetence at Skeldon factory – Commentary

It must have hurt the Minister of Agriculture a great deal to have to admit the incompetence at Skeldon  
Written by realTalk   – Demerara Waves
Sunday, 28 August 2011
Last week, the Honorable Minister of Agriculture revealed to Guyana that GuySuCo does not possess the competence to run the US$100M Skeldon Sugar Factory. He went on to encourage its Board of Directors to hasten the consideration of the proposals currently on the table by companies from China and India to take over the management of the failing factory.To make this admission had to be a really hard and painful decision for Minister Persaud in the face of all the propaganda and hype that the government generated around this factory that was to be the saviour of the Guyana sugar industry. After Booker Tate, the global leader in the provision of development, management and technical services to the world of sugar, ethanol, bio-energy and other agribusiness projects, had been unceremoniously dismissed by the Government, it seems rather strange that more foreign management is being sought once again for the troubled factory.        When GuySuCo and the government got rid of Booker Tate early last year to go it alone at Skeldon, many might have believed that the expertise and competence to manage the factory indeed resided in the Company. But the new factory at Skeldon only continued to portray more compellingly its white elephant status.

Now three years after Minister Persaud declared at the commissioning of the factory that: “This particular new episode has been scripted after a profound assessment of where the sugar industry is positioned today, the challenges it faces, and the identification of what is needed to facilitate a globally competitive industry that would continue to contribute to the development of our country and the well-being of our people,” he is now forced into using less lofty words of contrition.

Even President Jagdeo knew that the writing was on the wall for Skeldon as he unleashed his big brother style of rhetoric to the Berbice people early October last year. “This is a US$200 million facility… unfortunately, it’s not delivering the results we expected it to…they have too many mistakes going on there and I intend to fix it…it has to change,” Jagdeo fumed. He continued, “We’re not going to make that sort of investment to have a few people mess it up…so even if it means personally I have to get involved, I will get involved to ensure that it is fixed…that it’s delivering the kind of results that it should deliver so that we can safeguard the sugar industry.”

If indeed one of the companies being considered for this new management contract at Skeldon is indeed the Chinese firm CNIC, then the Government and GuySuCo must be very careful in how they treat proposals from this particular Company. CNIC have already demonstrated their costly incompetence at building a third rate factory at Skeldon.

The AFC presidential candidate might be correct in his call for the privatization of the sugar industry. Quite frankly GuySuCo does not seem to run as a business but more as a front organization to secure votes for the PPP. That GuySuCo cannot raise the efficiency of its production through modern crop husbandry and cane harvesting is a clear indication that severe incompetence rules. In 21st century Guyana, its sugar industry carrying such a high wage bill of over GUY$15B for labour highlights the Company’s reluctance to embrace significant mechanization and shed its bloated labour force.

But wait, no government, at least not the PPP government, will be prepared to sacrifice its Region Six support for the efficiency of an industry that can benefit the entire country. GuySuCo has to remain in its backward state as long as the PPP or any government continues to depend on the existence of the estate mentality in larger sections of Berbice.

Privatization might be the answer Guyana needs in order to bring about a viable sugar industry. The Guyanese sugar industry has for too long been linked to politics. When the PNC was in office cane fields were burnt repeatedly. GuySuCo was constantly bombarded by senseless industrial action by GAWU to show allegiance to their sugar daddy Cheddi! Sabotage in the field and factory was the order of the day.

The PPP has inherited a sugar industry that is the monster it created. Instead of industrial action going away, it intensified. So is it a surprise that Skeldon failed? Who is to be blamed for its US$181M failure: Booker Tate, CNIC, the PPP, GuySuCo, or all of the above?

One thing seems certain – GuySuCo is about to embark on a very dangerous path should the government choose to appoint a company that has no experience in the business of sugar to manage its affairs at Skeldon.

There are a large number of reputable sugar companies in India that carry varying degrees of expertise that can lend support to Guyana. Some of those companies are: Andhra Sugars Ltd, Bajaj Hindustan Ltd, Balrampur Chini Mills, Dalmia Bharat Sugar & Industries Ltd, Dhampur Sugar Mills Ltd, India Sugars & Refineries, among others.

Please note however there is no Company in India that works within its sugar industry that carries the name Surendra Engineering!

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