US$200M Skeldon Sugar Factory seen as a letdown – Luncheon

US$200M Skeldon Sugar Factory seen as a letdown – Dr Roger Luncheon

MARCH 29, 2013 | BY KNEWS |

Skeldon Factory

Skeldon Factory

The beleaguered Skeldon factory “hasn’t realised its promise within the expected time” – Dr. Roger Luncheon

The US$200M Skeldon Sugar Factory built as part of Government’s plan to reverse the sorrowful state of the country’s sugar industry is a letdown, says Dr. Roger Luncheon, Head of the Presidential Secretariat.

Financing for the factory is derived from a mixture of state funds, grants from the European Union (EU) and loans from the Caribbean Development Bank (CDB) and World Bank. Dr. Luncheon is doubtful whether Guyana has begun repaying the loans to the International Financial Institutions.   

Nonetheless, even if the factory never begins producing sugar to its optimum, as is currently the case, Guyana still has to repay the loan. Noting that it sometimes takes about 20 years to commence repayments on these loans, Luncheon said he is hopeful that the factory would have, at that time, achieved its objectives.

The Cabinet Secretary was unable to reveal at his weekly press conference how much Guyana would have to repay because of the “intricate financing involving public funds and a variety of donor agencies that have different terms”.

He explained that money from the EU was in the form of a grant and there is no loan or repayment associated with that assistance. However, financing from the CDB and World Bank were loans, and in time, Guyana has to repay.

“Skeldon was and remains an incisive developmental initiative in agricultural and sugar in Guyana…We join with those who have expressed their concerns that it hasn’t realised its promise within the expected time,” he said.

However, the Skeldon Sugar Factory is only a part of the challenges that the Guyana Sugar Corporation (GuySuCo) experiences. While some have called for Government to privatise the industry, others believe with proper management and necessary resources it has a chance of survival.

Only recently, former Member of Parliament for the People’s National Congress Reform (PNCR) Anthony Vieira blamed Government for the decline of the sugar industry.
Commenting on the industry being starved of funds, he said, “Beginning in 2006 the EU had started paying the development fund to Guyana which was our compensation for the loss of the preferential price for sugar in the EU markets”. The money was never released to GuySuCo, he said.

However, Dr. Luncheon said that the money was for budgetary support and not directed for a specific project. He explained that a significant transition has been taking place to development aid by the donor community. There is a shifting from project financing to budget support which allows funds into the country’s revenue and is used for developmental priorities.

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Comments

  • Cyril Balkaran  On March 31, 2013 at 6:46 am

    If Management issues are bedevelling GUYSUCO, then we must get the correct skill mix of the management structure on board. IF EU funds were released as a budgetary support to the ailing Sugar Industry then why was it not through the same budgetary allocations not reach the coffers of GUYSUCO? Mr Luncheon must advocate to his cabinet the areas of Priority with state funds in the need.It is time we place the experts at work for GUYSUCO is an ailing company and is crying out for good leadership and better management.

  • N Augustus  On April 5, 2013 at 7:35 pm

    Management is the problem wilth a goveernment relucant to face up to the fact that those involved in the industry believe that they are too big to fail. Based on what is at stake,. government owes it to the taxpayers that the best management possible be installed and a strong message to the workers that unless there is a bertter attendance and less strikes, there may be no pay instead of low pay complained rightfully or wrongfully about. The possibility of employing migrant workers to help reach the industry high expectations should be actively considdered and discussed with the unions. The Haitian President recently called for free employment movements within CARICOM. Just saying things have to change to be self sustaining or be sold or closed down.

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