–sugar production to remain part of economic mix, jobs to be protected

HEAD of the Special Purpose Unit (SPU) under the National Industrial & Commercial Investments Limited (NICIL), Colvin Heath-London announced Monday that the selected tender for International Financial Services Provider had closed.

According to a release from the company, selected tenders were invited from PriceWaterHouse Cooopers, Ernst & Young, Delliote, and KPMG to provide services to the SPU as International Financial Services Provider (ISP).
The selected ISP will be conducting the valuation of all assets under the control of GuySuCo, in addition to providing other advisory and financial services.
When the tender closed on Monday, the SPU had received submissions from all four of the invited companies. An award should be made within two weeks. It is expected that the valuation of the assets and the preparation of a prospectus would be completed by the end of January 2018.

Speaking about the approach being taken by the SPU, Heath-London explained that he believed that “there is a future for sugar in Guyana, and that sugar production must be protected and remain part of the economic mix in the economy.” He hastened to add, “How sugar is protected depends on a combination of options for the existing assets involved in sugar production.”

In the mix of options being contemplated are privatisation and diversification. The SPU is interested in companies, both local and international, that could integrate the production of sugar into their existing operations and product mix.

According to Heath-London, “Companies that are in rum production, other beverage manufacturing, and food processing, for example, would be ideal as potential operators of some of the current GuySuCo assets.”

The position being taken by the SPU is that all of what are considered GuySuCo’s assets are really national assets vested in the control of GuySuCo. As such, while factories could be sold to potential operators and investors, lands will not be sold, but could be leased so that they remain the property of the State.

Many persons are looking for the survival of sugar because of the fears of job loss in the sugar producing parts of the country, and some are romantic about our history with sugar. The approach being taken by the SPU seeks to tackle the economic problems of GuySuCo, while finding ways to defend the jobs in sugar, and to ensure that the culture and history of sugar in Guyana would be protected.

It should be noted that sugar lands and sugar factories are not the only assets under GuySuCo’s control. For decades, GuySuCo was tasked with providing and/or managing a wide range of other assets including community centres, sports ground and other recreational facilities, primary health care facilities, drainage and irrigation networks, and water conservancies.

These, for example, made GuySuCo critical to national drainage and irrigation activities and for agriculture and for flood control.

All of these are important social, economic, and infrastructure obligations that were provided by GuySuCo, often at the expense of profitability. As an example, the fortunes of GuySuCo had an impact on cricket, horse racing, swimming, athletics and cycling. The effects were felt by entire communities and not just sugar workers’ families.

Notwithstanding the critical value of these other services, continuing to depend on GuySuCo to provide them is a bankrupt model that must be changed. Many of these other properties will be either privatised, divested or otherwise placed under different management arrangements.

Advertisements have been placed for Expressions of Interest (EOI) in the sugar factories and estates. The deadline for the EOI has been extended from November 3 to November 24.