Govt creates Special Unit to sell GuySuCo’s assets
… sale to begin with Skeldon Sugar Factory – Finance Minister
Government has created a Special Purpose Unit to be housed at the National Industrial and Commercial Investments Limited (NICIL) to lead the sell-off of
assets belonging to the Guyana Sugar Corporation (GuySuCo).
That information was disclosed during consideration of the first Financial Paper for 2017 requesting a Supplementary for the $250 billion Budget for 2017.
Included in the more than $6.3billion request was a sum of $130 million earmarked as a subsidy for contribution to local organisations.
According to the explanatory remarks accompanying the request, the money is “to provide for the establishment of a Special Purpose Unit to manage the reform of the sugar industry.”
According to the Financial Paper, the amount includes provision for employment costs, utilities, professional and legal fees, advertisements, operating supplies furniture and equipment.”
The information was disclosed by Finance Minister Winston Jordan, who was at the time responding to queries raised by Members of the People’s Progressive Party/Civic (PPP/C) in Parliament.
Minister Jordan, in seeking to apprise the House, indicated that Government was unclear as to what it is looking to rake in from the sale of the GuySuCo assets since they still need to be properly evaluated.
He explained that the purpose of the Special Purpose Unit under the rubric of NICIL will be for the divestment and privatisation of certain parts of GuySuCo.
According to the Minister, monies have been earmarked – some $60 million to hire an accounting firm in order to lead the divestment process, including updated valuations of the assets.
Responding to PPP/C Member of Parliament and Sugar Unionist, Komal Chand, Minister Jordan insisted that GuySuCo will be playing a major role in the divestment process since there are a number of items still to be done by the Sugar Corporation.
“This is a Special Purpose Unit designed purely for what I indicated… the focus of this Unit is privatsiation and divestment of identified assets one of which is Skeldon Estate, that is their top priority.”
The Finance Minister told the House that other identified properties will soon be transferred to the Special Purpose Unit for divestment by that outfit.
GuySuCo, he said, will identify the lands or assets to be divested after which it will be transferred to the Special Purpose Unit.
“In other words, we pulling out this whole exercise from GuySuCo so GuySuCo can continue with its operations,” according the Minister Jordan.
According to the Finance Minister, some $30 million has been set aside for the payment of salaries for the Unit which he expected to be headed by a Director and deputy along with support staff.
Trade Unionist and PPP/C MP, Gillian Burton-Persaud, in response to her queries, was told that none of the money allocated for the Unit will be used for the retraining of displaced sugar workers as a result of the divestment moves by the Administration.
Former Junior Finance Minister, Bishop Juan Edghill questioned why Government would want to transfer money to NICIL, itself not a budget agency that has over the years generated billions in revenue.
Minister Jordan told the House, that the money is not being transferred to NICIL per say but rather for the Unit.
He told the House that NICIL simply did not have the money to fund the operation since any money it holds is being turned over to the Consolidated Fund.
The Minister did point out that the outfit will expand its scope as a unit within NICIL when it has completed its GuySuCo related transactions.
Chairperson of the Public Accounts Committee, Irfaan Ali, in his contribution to the Committee of Supply scrutinising the expenditure sought to query whether there was any social or economic impact assessments undertaken before any such decisions was taken.
Jordan was further queried on what will obtain with the proceeds Government will raise by selling off GuySuCo assets.
The Finance Minister insisted that all transactions will be above board and in fact will be subjected to a public tendering process. The Minister reminded that Government is unable at this time to speak specifically to the level of revenues to be raised since the valuations are yet to be completed.
He assured however that the proceeds emanating from the sale of GuySuCo’s assets will be pumped back into the industry.
According to the Finance Minister, the revenues emanating from the sale of these assets will go to GuySuCo towards defraying its debts, financing the costs of divestments as well as to be used in the operations of the entity.