GuySuCo’s money runs out – Chairman says accountants resign; credit being refused

The smaller-sized state-owned Guyana Sugar Corporation (GuySuCo) says it has no money and wants the Government to help.

According to the largest union for sugar workers, the Guyana Agricultural and General Workers Union (GAWU) yesterday, it has learnt that GuySuCo is facing the prospect of closure having exhausted its finances and was desperately requiring the support of the Government.

In a letter of May 15, 2020 from GuySuCo’s Chairman, John Dow, appealed to President David Granger for his intervention “…to use your good offices to arrange for funding to prevent the impending closure of the Industry”.           

In the letter, Dow told President Granger that “…GuySuCo needs funds now to be able to survive after the second week June 2020.”

The GAWU said that it learnt through its representative on the GuySuCo Board, that the President did not respond to the corporation’s request.

“For the thousands of Guyanese who directly and indirectly still depend on the sugar industry for their livelihoods, this is most disturbing news at this time.”

Since coming to office in 2015, the Coalition Government closed four estates across the country, leaving three, placing about 7,000 workers on the breadline.

The coalition said the corporation was bleeding billions from the treasury, placing a strain on the economy.

According to the letter from GuySuCo asking the President for help, the last two crops fell below expectations, with the COVID-19 pandemic exacerbating the financial situation.

The corporation said it can only afford labour, fuel and cane farmers payment until mid-June. It has no money for spares and materials for the mid-year out-of-crop maintenance.

The situation, unless checked, will severely impact the second crop, GuySuCo said.

Dow said it has a backlog of $2.1B owed to creditors with likely scenario of further credit being halted.

GuySuCo has so far expended $9.6B in a bond.

Dow said that the Government-established Special Purpose Unit has been selling GuySuCo’s assets- scrap iron, tractors, punts, etc. GuySuCo said it has not been told how much was paid.

“A provision for a subvention is desperately needed from the 2020 budget. This budget is obviously months away, whereas GuySuCo needs funds now to be able to survive after the 2nd week June 2020.”

The financial situation is so dire that the two accountants on the board, Ramesh Persaud and Paul Cheong, have both resigned.

The three-estate GuySuCo- Uitvlugt, Blairmont and Albion- have over 10,000 workers.
Sugar has been the biggest foreign currency earner for decades before sliding and overtaken by gold and rice.

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Comments

  • kamtanblog  On June 10, 2020 at 3:53 am

    Sorry ! No subsidies !
    Simple Simon says
    % +- world sugar markets prices applied
    by government (guaranteed) ….

    Google for more info sugar prices.

    It’s not rocket science!

    Kamtan

  • brandli62  On June 10, 2020 at 4:38 am

    I do not know all the details underlying the failure, however I believe that the sugar industry in Guyana can only survive by investments that lead to a modernization and mechanization of this sector. Large areas of flat land and sufficient water to irrigate the sugar cane fields should put Guyana at an advantage to become competitive player for sugar production again. The labor force needs to be trained to run and maintain the machines. Privatisation of the sector has to happen. There is no space for the state and bureaucrats in running commercial businesses that the private sector can do run better.

    • kamtanblog  On June 10, 2020 at 9:53 am

      Interesting !

      Simple Simon says
      Private public parthnrrship.
      Private to manage production/manufacturing
      Public to regulate prices/corruption

      Way forward

      Kamtan

    • wally n  On June 10, 2020 at 4:39 pm

      For years my wife bought Demerara sugar until someone told us it comes from every where, but Guyana. and It is sold throughout Ontario, which might seem the problem could be marketing. The need is there, so? I agree with all of the rest, competitive product, forget Government, tough in the real world.

  • guyaneseonline  On June 10, 2020 at 8:12 pm

    Govt Treasury has no funds to bail out Guysuco- Finance Ministry
    Posted by: Demerara Waves – in Business, News June 10, 2020

    The Ministry of Finance Wednesday night said Guyana’s Trwasury does not have any cash to bail out the financially saddled state-owned GuyNa Sugar Corporation (GUYSUCO).

    The Finance Ministry, in a carefully worded statement, suggested that monies would be facilitated from another source.

    The Ministry of Finance notes Guysuco’s request to the Government for a bailout, and wishes to assure that it is actively seeking to assist Guysuco to access funds that are available to it, to mitigate its present challenges.

    Notwithstanding however, the prevailing national circumstances, coupled with the challenges of COVID 19 and a reduced national income, render the Treasury incapable of providing a bailout to Guysuco.

    In this regard, we wish to remind that a $30 Billion bond backed by NICIL’s assets and guaranteed by the Government of Guyana was secured through NICIL to retrofit and revitalise the 3 remaining sugar estates. During the period July 2018 to February 2020, $9,720,759,568 was disbursed to Guysuco to fund its Capital and Operational Expenditure – much of which was outside the terms of the bond.

    Additionally, NICIL through the SPU, sold lands that were vested to it, and garnered deposits of $2.1 billion. The full sum was used to offset bond payments that became due in May, 2020. The balance of $1.5 billion for the lands will be paid over to NICIL when the vesting orders are signed and gazetted. It is expected that part of this sum will go towards a bond repayment which is due on July 4th, 2020, and the remainder to Guysuco. Guysuco also generates its own income.

    Another disbursement is expected in the coming days; so we urge that NICIL, Guysuco and the syndicated lenders work assiduously to resolve any bottlenecks.

    The Government of the Cooperative Republic of Guyana remains committed to making Guysuco a viable partner.

  • wally n  On June 10, 2020 at 8:27 pm

    Private enterprise….looking good……NOW???

    • kamtanblog  On June 11, 2020 at 2:57 am

      May add a bit of history here on

      Privatisation V Nationalisation as per the UK
      model.
      Conservatives privatise
      Labour nationalises

      One uses private funds
      Other uses public funds

      Catch 22

      Competitiveness or cooperation way forward.

      Certainly not corruption !
      With anti corruption laws enacted enforced.

      My two cents

      Kamtan

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