Skeldon’s massive losses…Workers dumped tonnes of cane-juice to make payday, forged accounts

Skeldon’s massive losses…Workers dumped tonnes of cane-juice to make payday, forged accounts

A South African-based engineer hired several times to help fix the problems with the Chinese-built Skeldon sugar factory, had raised alarming questions about the operations there but there is little evidence anything was done by management.

Engineer, Vishal Somai, who was instrumental in recommending that Skeldon don’t grind for the first crop this year because of unsafe boiler conditions at that Berbice factory, described the dumping as criminal.
It helped contribute to the new factory’s under-performance in its seven years.  

The 2009-commissioned factory and Skeldon project were supposed to rescue the Guyana Sugar Corporation (GuySuCo).

Instead, it failed to perform and instead, served as a cash drain on the economy, with hundreds of millions of dollars spent to fix a number of technical issues.

Last December, Somai complained to the Berbice Prime Ministerial representative, Gobin Harbhajan, who asked him to submit a report. The matter was reported again, this time officially to the management of GuySuCo, but it appears that the matter was swept under the carpet.

Somai’s complaints are making a strong case for Government to move towards privatization of the Skeldon estate as the engineer is warning that the current situation is not healthy.

According to Somai, in last December correspondence to Harbhajan, he discovered that thousands of tonnes of draft juice and mixed juice were being dumped into the canal on a regular basis.

This was due to two main reasons. He said that there were not enough punts in the system and therefore this required a very short turn-around time for the punts.

“Breakdowns or stoppages in the factory create a huge problem in the field regarding loading and delivery of punts. This directly affects the wages of cane cutters and causes them to act inappropriately.”

The engineer explained, too, that when the back-end of the factory is full, the front end must stop while the back end reduces stocks.

“But this will affect the wages of the guys at the front end who get paid based of tons cane crushed or punts cane offloaded.

“They therefore choose to dump the juice and carry on grinding to maintain a good wage and maybe even make “day-pay”.”

Somai said it is a criminal activity. People elsewhere (including South Africa) are fired instantly for such acts.

“This activity directly affects the production of sugar and therefore the revenue of the company (GuySuCo). Being state-owned, the effects are even more serious as it affects taxpayers negatively.
“To make matters worse, most of the figures in the lab report are crooked to make things “balance”.
This was confirmed by professional consultants, SKIL, who were hired by GuySuCo to perform an energy and mass balance of the Skeldon factory.”

The alarming report of the engineer recommended that Government and GuySuCo seriously relook at the methods used to calculate wages and bonuses of cane-cutters and cane loading workers in both the field and the factory.

“People need to realize that GuySuCo makes money from tonnes of sugar sold and not tonnes of cane crushed. Most of the time due to the workers’ mindset and resistance to change, the easiest solution would be to privatize the factory and pass the buck onto the new owner to sort out.”

Contacted yesterday, Harbhajan admitted that he had received complaints from the engineer who has worked extensively with GuySuCo starting June 2011.

The PM representative had been on the board of the Skeldon Energy Inc. (SEI), a company formed by the previous government to handle the co-generation power plant of Skeldon.

Between October and December, Harbhajan overlooked the duties of the General Manager of SEI, Carl Duncan, who was overseas on medical treatment.

“That was when the specialist, Mr Vishal Somai, from South Africa approached me and made certain reports of production numbers being cooked at Skeldon estate.

“He said that he believed that this Government can solve this matter. I asked him to take the matter up to GuySuCo but nothing was done.”

In reports seen by Kaieteur News, Somai said that he made some shocking discoveries.
“With the lack of any throughput controls in the front end of the factory, I was quite surprised to see that the grinding rate was within good tolerance (within 5%) of the requested target grinding rate. This raised suspicion and caused me to further investigate.

“I sat in the control tower on 8 April 2015 from 2pm to 4pm and just observed the entire operation. To say the least, I was quite shocked at what was happening.”

That date was a month before the May 2015 general elections..

“The actual tonnage of cane for the hour was not being declared but rather what was asked for. The excess for that hour (anything that was over the target) was carried forward to the next hour. So if 200TCH was the target and the actual was 250TCH then the difference of 50TCH was carried forward to the next hour. If the following hour was only 150TCH actual grinding rate then what is declared is 200TCH.”

He said he asked questions of factory officials and staffers.

“They all admitted to what they were doing but they did not know how serious the consequences were in terms of operations up stream. By doing what they are doing it is not only illegal, it has… operational effects…”

The engineer recommended that GuySuCo seriously need to refrain from this practice and put in proper controls to maintain a more accurate throughput.

“We cannot rely on feeder table operators to give us the throughput we require. They simply cannot judge by eyesight.”

The Coalition Government had ordered an inquiry into the state of the sugar industry and has even tabled a white paper in the National Assembly on the future of GuySuCo.

Billions of dollars annually is being plugged to GuySuCo to keep it alive. Despite failing fields and little cash, made worse by Skeldon, the Opposition has been appealing for the administration to hold off.

Last year December, the century-old Wales, West Bank Demerara closed its gates.

Rose Hall and Enmore have been recommended for closure too, Skeldon has been slated for privatization with a number of interest expressed already, including to the rice miller powerhouse, Nand Persaud and Company, makers of the Karibee Rice and another from Tate and Lyle.

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