Taxpayers could foot bill as “handpicked” investors reap profits – Jagdeo

Another corruption scandal looms

…not buying Gov’t’s weak financial arguments as fishing expedition conditions on sugar
…taxpayers will foot the bill while investors enjoy profitability benefits

By Samuel Sukhnandan

The Government of Guyana may use the 15-billion-dollar loan it is seeking from a leading commercial bank here to clear the multi-billion-dollar liabilities the Guyana Sugar Corporation has accrued over the past few days, in order to give its “handpicked” investors a clean slate and better opportunities to maximize their profitability when they purchase estates.
This is the position of Opposition Leader Bharrat Jagdeo, who on Thursday

warned the nation through the media that Guyanese taxpayers may ultimately foot the bill for the repayment of this loan while the “handpicked” investors would reap the gains and maximize their profitability.
Jagdeo has said he is not buying the economic and financial arguments put forward by the Ministry of Finance and the Government to justify this move.
He has said it defies logic that Government wants to borrow $15 billion to keep these estates open for a few months, when that sum could have assisted the reopening for close to one year.
Addressing journalists gathered for a press conference at the Opposition Peoples Progressive Party headquarters, Freedom House on Robb Street in Georgetown, Jagdeo declared: “…my worry is that they need the $10 to $15 billion to clear off liabilities for GuySuCo…maybe the short term liabilities; so that the people they already identified to take over these estates will come in with a clean slate, so they will have a big prize: they will take over these estates without any liability.”
He reasoned that once this happens, the new owners will have the option to cherry pick the top, take how many workers they want, refashion things, and even sell out some of the assets.
“So I think that is their idea here, because their explanation does not make financial sense,” he opined.
In response to the former president’s argument, the Government issued a statement late Thursday explaining that the money it plans to borrow would be used by the Special Purposes Unit (SPU), not only for the reopening of the estates, but to help to finance current and capital programmes.
The Opposition Leader also reiterated calls to investigate whether $32 billion were indeed given to GuySuCo. “So it’s very murky, the $32 billion; murky. And I suspect (that) if you start tracing it, you would see that maybe some of it was loans that were already taken by GuySuCo that they considered part of the transfer, and some of it came and might not have gone directly to GuySuCo, or (has) gone for other purposes apart from what they were intended; so we still have to go after the $32 billion,” he explained.
Finance Minister Winston Jordan said on Wednesday that the money Government hopes to acquire as a loan to fund the operations of these two estates should be acquired before mid-March.
He also declared that revenues generated from the sale of estates and other assets would be used to repay the loan.
The Government will be turning to commercials banks for this syndicated bond.
“These estates potentially are not going to be producing sugar per se, or the kind of volumes that you know. It’s going to do some molasses. There is an interesting model for Enmore prior to its complete diversification, and that will be involving, hopefully, DDL (Demerara Distillers Limited),” Jordan explained.
Jordan has again defended Government’s closing of the estates and its intention to temporarily reopen them. He said it would have been a difficult task to keep them opened because of the day-to-day expenses involved while still meeting other obligations, including a huge wage bill.
He explained that the reopened estate would operate on a smaller scale when compared to the previous years. According to him, this also sends a good signal to potential buyers.
It was reported in sections of the media last week that the Skeldon and Enmore sugar factories are expected to be reopened by the end of March to reap more than 300,000 tonnes of sugar cane.
The Special Purposes Unit (SPU) would also use the reopening of these estates as an opportunity to prove to potential investors that all of the estates are viable.
But Jagdeo has said this now proves that Government’s move to close the sugar estates was purely political.