…Gov’t seeks funds to restart operations at Skeldon, Enmore
-workers to be rehired, estates to operate until sold

THE government through the National Industrial and Commercial Investments Limited (NICIL) is looking to secure a loan of $10-$15 billion to fund the operations of the Skeldon and Enmore sugar estates that will soon be reopened on a miniature level, said Minister of Finance, Winston Jordan.

NICIL through its Special Purpose Unit (SPU) took control of the Skeldon, Rose Hall, Enmore and Wales estates when government decided to close operations early this year in order to maintain the viability of the sugar industry.

Since January 2018, the SPU was tasked with having the estates valued and preparing them for sale, but Minister Jordan believes that in order to add to the process of selling the estates or at least attracting a buyer(s), the two estates should be reopened.
“We cannot keep them closed and moth-balled, because when the buyers come they would probably not be as impressed if they were working… once in operation they [investors] could also see that they are valuable properties to acquire,” he explained during an interview with reporters on Wednesday.

In essence, their intent as explained by the minister is to open the estates until they could secure a buyer. He said they hope to conclude the buying process within six-nine months. Jordan went on to say that NICIL is looking to get financing from a commercial bank by mid-March, so that the estates could be up and running again.

Government, he said, will use the revenue from sale of the estates and land to repay the loan within three to five years. “This will be a government debt, so that when we get a buyer we will service the debt,” he said, adding that the negotiations to secure the loan are ongoing at the level of the SPU. In the meantime, Jordan said the estates will be operated in a miniature way as a prelude to the sale. “Some workers will be rehired to work at these estates, which will be producing sugar but not high volumes, but will focus mainly on molasses,” the minister explained.

As opposed to the original model of operation, there will be a temporary model of operation for the Enmore estate prior to its diversification. The finance minister said Enmore will be supplying the Demerara Distillers Limited (DDL) with molasses, while there is a different arrangement for Skeldon. “Once DDL could take it off, the molasses from Enmore will be going to them, because we do not want them to import when it could be produced locally,” he said, referring to DDL’s announcement that they might have to import the product.
Government believes that the finance needed to fund the miniature operations is nothing compared to what they would have needed to keep the Guyana Sugar Corporation (GuySuCo)’s model opened in terms of staffing and so forth.

Jordan explained that the proposed model will send signals of what government wants from investors. “The original model of keeping these estates under GuySuCo, knowing they are not cost-efficient would not have been able to attract a buyer of the kind you are looking for…here [proposed model] will pull them [estates] away from GuySuCo and try to make them efficient and the balance sheets look better in order to attract investors,” said the minister.

Since NICIL took control of the estates, they became separate entities as opposed to being under the purview of GuySuCo. This, he said, means that equipment would not be moved from one estate to the next, as what had happened under the GuySuCo arrangement.
Once the assets remain within their respective estates, the United Kingdom-headquartered Price Waterhouse Coopers would be able to value the assets properly, so that investors would know what they are getting.

Minister of Agriculture Noel Holder, in a separate interview said government was informed that under the previous administration some big companies were interested in taking over the sugar industry. “Government then apparently didn’t go along with that and so these companies pulled out. Some of them are expressing interest,” he said, echoing the sentiments of Minister Jordan, who said that the SPU would get a better deal for the estates if they are operational.

Opposition Leader Bharrat Jagdeo had said that he supports this move and called on the administration to admit that it was wrong to initially close the estates.
The Guyana Agricultural and General Workers Union (GAWU) had also expressed the view that reopening of the Skeldon and East Demerara estates was a “ray of sunshine between dark clouds” hovering over workers since the estates were closed.

“This was a matter we strongly stressed during our engagement with the administration on January 19, 2018 and we are heartened that it has accepted our suggestion, obviously recognising their grave misstep, and decided to resume operations at the estates in question,” a recent statement from the union read.

Sugar workers from the Enmore estate also expressed their happiness to hear that the estate will be reopened. “Me still get a lil job hay, but I glad that my friends them might get back they job…people already start talk here that it gon open back,” said a sugar worker, Nazir Hussein during an interview with the Guyana Chronicle on Wednesday.
Earlier this year, the cash-strapped Guyana Sugar Corporation (GuySuCo) had to lay off some 4,000 workers in order to keep the sugar industry viable, but government had forged ahead with training for those former employees, with support from the Small Business Bureau and other stakeholders.

Retrenched sugar workers had since called on the government to reopen the sugar estates on the basis of no job opportunities, worsening societal conditions and the daily shrinkage of severances as they struggle to support their families.

A Commission of Inquiry (CoI) into the sugar industry had revealed that not a lot could be done on government’s part, since all of the corporation’s earnings were being spent on wages and salaries, a situation which could not be sustained by government bailouts.

“When the government came to power in May 2015, it didn’t realise the extent to which GuySuCo was in trouble. GuySuCo was being bailed out by the previous administration for years. We had to find, in the first six months, $16B just to keep GuySuCo going, paying wages and salaries,” said Minister Holder in a recent report.
The SPU was since established to manage divestment of the Skeldon Factory and other GuySuCo assets.