…thousands of acres of prime land earmarked to be sold to cover bond
By Michael Younge
Guyana will have to pay approximately 4.75 per cent interest on the whopping $30 billion bond it secured recently to revitalise the operations of the three estates which fall under the management of the Guyana Sugar Corporation (GuySuCo) or all of the assets and companies owned by the National Industrial, Commercial and Investment Limited (NICIL) could be lost.
A source close to the Finance Ministry told Guyana Times on Sunday that while the interest rates secured would appear to be very favourable, the implications of failing to consistently repay the bond and related interest rates would be dire.
“This is a very serious undertaking and Guyanese must watch closely at the consequences for [Special Purpose Unit] SPU/NICIL, GuySuCo and the country if Guyana defaults on its payments to those local and regional commercial entities that granted the $30 billion bond,” the source emphasised.
When questioned during an exclusive interview on the repayment of the bond by GuySuCo, Board Chairman Colvis Heath-London insisted that the SPU and GuySuCo were committed to ensuring that all the necessary repayments were made and strict adherence to financial best practices were followed within GuySuCo to ensure that there was no wastage of revenues secured by the sugar company from its ongoing operations.
Heath-London declined to reveal the actual rate at which the bond was given to Guyana, but reassured stakeholders that a plan was in place for repaying the monies.
But the source close to the SPU revealed that GuySuCo, with the financial advice of NICIL and the SPU, would embark on a process that could see the company selling some $3 billion worth of spare parts that were currently lying in its storage bond.
Also, a proposal has been made to secure another $10 million by selling scrap metal sourced from around the company’s East Demerara Estates.
This publication was told that over the next few months, GuySuCo would embark on the process of selling prime real estate which were not being utilised. Some 4600 acres would be up for grabs. From that alone, the SPU and GuySuCo hoped to garner a whopping $50 billion if sold at different intervals.
Further, the Unit could seek to secure some $265 million by selling the lands in and around the Wales Estate owned by GuySuCo.
Efforts by this newspaper on Sunday to confirm whether or not, GuySuCo and the SPU were seriously considering taking the aforementioned measures in order to pay back the bond were futile, as calls and texts to the GuySuCo Chairman’s mobile phone went unanswered.
Heath-London had recently confirmed that over the next few months, special emphasis would be placed on transforming GuySuCo’s economic misfortune into a situation where it was a fully self-sufficient, viable and competitive enterprise.
He had disclosed that the Ministries of Finance and Agriculture and all of the related industry partners were fully on board with the new Board of Directors’ vision for a new value-added industry and modernised company.
Heath-London, who is also NICIL’s Chief Executive Officer, explained that when the restructuring plans were at a mature stage, then the real benefits would be realised to ensure GuySuCo’s modernisation and return to profitability.
He spoke about the sale of prime GuySuCo lands around the country and the new approaches that were being employed by his technical officers.
Since his announcement of the bond, concerns have been raised about Government’s vision for the industry and the genuineness of its actions thus far since that very $30 billion could have gone into restructuring the industry while keeping all of the estates open and GuySuCo’s workforce employed and engaged.
On Saturday, Opposition Leader Bharrat Jagdeo expressed much concern over this development and the decision by the Government to borrow some US$900 million from the Islamic Development Bank (IsDB).
The trained economist and former President referred to the plan as a failed approach to national economic management, and pointed out that the sum was almost equivalent to Guyana’s total external debt of $236 billion by 2015.
“The shocking revelation … is serious cause for concern,” he stated. “We had, however, predicted this. The massive growth in the size of the national budgets, primarily on consumption, could not be financed by the hefty increase in taxation; so this hopelessly misguided [A Partnership for National Unity] APNU Government had to resort to large-scale borrowing.”
He added that this failed approach to national economic management was tried in the past and it led to a bankrupt country and resulted in devastating consequences for Guyanese.
“I am sure everyone would recall that the external debt was over 900 per cent of [Gross Domestic Product] GDP in 1992, which was reduced to 36 per cent of GDP in 2015. They plan to double it again within five years.”
According to Jagdeo, borrowing monies without feasibility studies, vision or plans will not solve Guyana’s economic woes. He expressed fears that this would have a long-term effect on the wellbeing of current and future generations of Guyanese.
It was announced that the IsDB has, for the period 2018 to 2020, committed to providing Guyana with financial and technical assistance to the tune of US$900 million. This, it was made known, would be directed into the country’s key development areas to assist with its plans for continued social and economic development.
This disclosure was made by Finance Minister Winston Jordan during his address at the 43rd Annual Meeting of the IsDB Group in Tunisia. According to the Minister, this money will aid Government’s plans in a meaningful way, as it would give direct support to several Government programmes in many developmental areas.