I refer to the diatribe written Mr. Nick
Jackson which was published in your issue of September 28th 2008. Since Jackson has decided to get personal with me and has
now called me a nihilist in his letter, he will not get away with it; I will
now have to conclude that Tate is complicit is this disaster, he did come to
the parliament and he did give evidence to our Economics Services Committee,
but I am one Guyanese who did not accept what the Guysuco team was saying, a
lot of it raised more questions than it gave me answers and I am not speaking
for the committee.
The PNC-R one G had made 5 charges that
pointed to poor judgement/management by GuySuCo in its 1998-2008 strategic
plan.
1.
We said that there was a refusal to accept that
the preferential price for sugar would not be guaranteed since the EU had
expressed a clear intention to remove it. But incredibly even though Guysuco was
adamant that the EU markets were guaranteed, and had enshrined that concept in
its strategic plan, Mr. Jackson now says that he was still tooling up for "adding
value to the core product by retail packaging of branded sugars, refined sugars
etc." I am saying that having made this monstrous mistake they are now trying
to hide the magnitude of the lapse in judgement by putting in place, only now,
alternatives which may not help much,
lets
see how successful GuySuCo was at doing this, last year GuySuCo sold to
international
markets the following tonnages, to the European Union they sold
156,728
tons under the [now 13.8% reduced] protocol at a price of G$114,886
dollars a
ton, under the second EU quota they sold 44,651 tons at G$117,122
dollars/ton
and this accounted for a total of 201,379 tons of the 266,499 tons the
industry
produced last year, Jackson's Caricom markets which he claims that his
master plan
has prompted him to seek out since he though he might lose his
European
preferential prices earned him 36%/ton less than what the EU is paying
him!
Mr. Jackson
also sold only 2165 tons of Guyana gold sugar to Caricom for 105,294 dollars a
ton, in other words after 8 years of this Demerara gold promotion and
production we are only selling around 2000 tons of it! As far as refined white
sugar was concerned we exported 18 tons white sugar last year, like everywhere
else GuySuCo is failing in these projects.
Mr editor the
European union's prices are expected to decline in the following manner
starting from our normal access price of 520.73 Euros/ton up to June 2006,
after June 26th 2006 it was made 4.5 % less/ton up to September
2008, then was reduced by a further 9.2 %/ton or 448.80 Euros/ton up to October
2009, then the final reduction of 21.8 % or Euros 335.20/ton from October 2009
onwards, So even at the reduced rate of 13.8% from the EU last year Mr. Jackson's
progress in marketing Guyana's sugar in Caricom and his packaging and refining achievements
can only be described as pathetic. Therefore his statement that "supplying the Caricom
market with brown and refined sugar is moving us forward" means this; had we
sold all of the sugar we sold to the EU last year [201,379 tons @115,381 a ton]
to Caricom we would not have made 23.235 billion dollars from it, he would have
made 15.059 billion Guyana dollars from it! In other words we would have made
an additional loss of 8.176 billion in the industry which would have to be
added to whatever loss Mr Jackson and his team made at Guysuco last year.
2.
We said that there is wide spread labour
shortages in the industry today leading to dire consequences to the industry
since high rainfall especially in Berbice has hampered mechanisation. Jackson now confirms that this is true, due [he says] mainly to the massive migration of the
workers; I hope that the house to house registration reflects this massive and
large scale migration of the sugar workers into the Caribbean and the US. He however declines to mention that GuySuCo was boasting of their increased
efficiencies in their 2001 review of the 1998-2008 strategic plan of having
reduced the workforce by 10,000 workers by 2001. He is now saying that he did
not reduce it deliberately as his own review of the strategic plan stated, he is
now saying that they migrated and he took credit for it at first; but now that
the migration continues creating a huge shortage of labour in the industry he
is crying that he does not have the labour to do the work of the corporation? Faced
with massive migration 10 years ago how could Tate not see that they had to
stem the flow, or contract the industry, or end up in the dire situation they
have to face now? Alyuh eyes properly pass Guyanese people yuh hear!
3.
He agrees that the weather pattern is changing
and that it is hampering the progress of the Skeldon project, indeed he says
the last three years were the wettest years between 2001 to 2007! Mr. Jackson and
his team should book their passages for the UK tomorrow, since apparently
without conducting a serious examination into our rainfall pattern for at least
the last 30-40 years he and his company committed this nation to this expensive
and dicey project armed only with rainfall from the recent past, when we knew
that we were not getting the typical rainfall for this country for the years
1992 to 2004 as I have pointed out to the public on numerous occasions over the
past four years and that is why when the rains came in 2004 we were totally
unprepared for it.
Mr Jackson
can quote me, we will have relatively high rainfall for at least the next
eight years.
This alone is a serious incitement against him and his managers since on
such inadequate
and shaky data they allowed this country to commit these huge
funds for
this expansion based not on the traditional historical rainfall of the country,
but only the
rainfall from the recent past which were el Nino years. I don't need to
say more
about this. Mr. Jackson is not a Guyanese and whilst my children and me
will have to
pay for this mess, he and his will not.
4.
We said that the private farmers at Skeldon
will not be able to find 50 million US dollars to expand their cultivations to
10,000 acres in three years which is essential to the Skeldon project. I said
that they have currently planted around 400 acres Mr. Jackson said that they
have in fact planted 1000 acres, we'll see. They will have to plant 10,000 acres
Mr. Jackson! And I want to know where they will get loans to the tune of ten
billion Guyana dollars to do it? Mr. Editor I am using Guysuco's own estimate
for a 10,000 acre field expansion [double the normal Skeldon cultivation before
this expansion] they said that this project will cost $181 million US, $131M US
for the Factory, and US$50 million or ten billion Guyana dollars for the
expansion of the cultivation by 10,000 acres. Jackson now says that he has to
buy additional machines since the opportunity days have shrunk from 120 to 60
days, I also want to know which farmer will be able to reap his canes
mechanically since it would be impossible to reap this farmer expansion by
hand.
5.
Does anyone know what Mr. Jackson is saying in
this huge section of this response occupying one third width of an entire page
length of the newspaper? In 2007 didn't Albion ask for 528.6 million Guyana dollars to do its capital works and was only given $183.2
million dollars? Didn't Rose Hall ask for $413.6 million and was
only given 193.4 million Guyana dollars? If this is not correct could Mr.
Jackson tell us what was asked for and what was actually given? Could he tell
us what the other estates asked for in capital expenditure and what they
actually received?
Now that Tate has decided to get involved in this matter even
though I was trying to keep them out of it, I want them to tell me how they
can accept a 350,000 pound sterling a year fixed salary fee and an additional
100-136 thousand pounds as bonuses [depending on how much sugar the industry
makes whether the corporation makes a profit or not] and produce such a total
shambles for us to unravel sometime in the not so distant future.
Guysuco have now told us that they have started the old Skeldon factory
and that they will have a bumper crop, Mr. Editor last year Skeldon started
their crop in June/July this year the alleged bumper crop will commence in
September, in other words with canes which are already past their ripening
period of 12 months and are turning to cork. Bumper indeed!
What is clear, and Mr. Winston Murray questioned Minister Robert
Persaud closely on the matter, was that the industry is not run on purely
business criteria.
For the purpose of comparison, here is how the industry fared over
the past 6 years 2001-2006; in 2001 they made a loss of -869 million G dollars;
in 2002 they made a loss of -274 million; in 2003 they made a loss of -4.3
billion; in 2004 they made a profit of +261 million; in 2005 they made a loss
of -1.866 billion; in 2006 they made a profit of +476 million; so in the last
six operating years during the height of their strategic plan Guysuco lost a
total of -6.577 billion dollars, in the previous 6 years when the strategic
plan was not yet implemented they made the following profits in 1994 the
industry made +3.719 billion dollars; in 1995 they made +3.220 billion dollars;
in 1996 they made +4.865 billion; 1997 they made +2,228 billion; in 1998 they
made +2.271 billion; in 1999 they made +3.058 billion. So in the 6 year period
1994-1999 immediately prior to the Guysuco strategic plan being implemented in
full, the industry made a total profit of 19.361 billion and in the six year
period after that, 2001-2006 they made a loss of -6.577 billion! that is some
strategic plan Mr. Jackson! What was your strategy? To lose money and bankrupt
the nation?
The GuySuCo's strategic plan is already a disaster. The plan took a
company which was making money and turned it into an economic basket case so
far. We just have to wait for the full effect of the Skeldon disaster to
manifest itself. But any fool can see that the expansion has had a most
deleterious effect on the entire economics of our sugar industry, since GuySuCo
is financing more than 30% of it from within Guysuco with their own funds which
they do not have, and it is affecting the profitability and performance of the
industry. That is what I said and the figures above prove it. This year we had
to subvent nearly 800 million to Guysuco from the consolidated fund.
Anthony J. Vieira MS MP.
