Assessment on closed estates proved viability – Jagdeo

…suggests reopening

Opposition Leader Bharrat Jagdeo claims that he has information that suggests that an assessment was done on the closed sugar estates by the Special Purpose Unit (SPU).
According to him, this assessment has proved that the very estates that were shut down which led to thousands being unemployed were viable.
“And so, if this is true and I hope the media will ask them … it would be very disturbing, because we believed this to be so, but we asked our Government to do a feasibility study of these estates and the industry before it took any decision to

send home workers and they refused to do that,” he said.
Jagdeo noted that the firing of over 7000 sugar workers has now created enormous problems for families and households across the country, especially in rural areas.
He said, “To now to do another study to find that these estates with small injection of funds could have been viable would be criminal. So, we believe the estates are viable.”
The former Head of State said if the assessment proved to be true and the estates could be made viable, then the Opposition would support the reopening of all the estates.
The coalition Government has made its position clear that the move to downsize the industry was a necessary one, as the monies used as annual bailouts were too much.
But the Opposition said even if this was the case, the laying off of workers could have been done in stages to allow for them to prepare for alternative employment.
Now that the preliminary valuation works of several estates have been completed, the Skeldon, Rose Hall-Canje, East Demerara/Enmore, and Wales Estates are now being advertised for sale.
It said it hoped that potential investors would begin visiting the various estates, in order to make assessments of the facilities as part of the preparation of their proposal to the SPU.
Head of the SPU, Colvin Heath-London was quoted in a statement from his agency that “work continues apace both with the process being carried out by the [global accounting firm PricewaterhouseCoopers] PwC and with the efforts of the SPU to maintain the operations of the estates as going concerns until they’re handed over to investors at the end of the process”.
Heath-London added that, “progress is also being made with the sale and lease of assets at the Wales Estate, and the conversion of the Skeldon Estate compound

to the Skeldon Heritage Resort has gone very well.”
Just last month, the SPU under the National Industrial and Commercial Investments Limited (NICIL) had responded to statements made by Jagdeo in regard to his criticism of the $30 billion bond acquired by the Unit through commercial banks, both in Guyana and the region.
The SPU has not taken lightly those criticisms which seek to suggest that the bond would be wasted and that it was acquired at an unreasonable rate.
In a statement, the SPU said it should be noted that as standard for any debt financing, security was required to secure payments to bondholders.
According to the SPU, rather than burden the assets of NICIL, which include the Guyana Oil Company, Atlantic Hotels Incorporated and the Guyana Sugar Corporation (GuySuCo), the security of the NICIL bond is simply a guarantee of payment from the Government of Guyana.
The duration of the bond is five years, since it is expected that the proceeds of the land sale for GuySuCo would be used to repay the funds, and NICIL wanted to secure the lowest possible interest rate.
However, Jagdeo said recently that he was now in receipt of the Private Placement Memorandum for the GuySuCo bond, and having read the contents of that document, he was shocked by what was contained in the agreement, which now leaves more questions than answers.
Jagdeo, an economist by training, said the general perception was that Government was raising $30 billion to spend on GuySuCo – on the remaining three estates. However, the memo tells a different story, as it has stated explicitly that the $30 billion would go to long-term projects instead.
He used the example of the road and airport expansion projects, where there is an option of repayment of 20 or 30 years at one or two per cent interest. These, he said, are long-term projects. “So that you don’t have big balloon payments,” he declared.
However, Jagdeo said that in the case of the GuySuCo bond, this was different because, “in five years, at a 4.75 per cent interest, which is 355 basis points above our treasury bill, the Government of Guyana will have to pay back from the proceeds of NICIL nearly US$40 million in about five years just to service $30 billion.”