PPP will not honour privatisation of estates – Jagdeo
…maintains $30B bond could have sustained industry
Now that PricewaterhouseCoopers (PwC) has submitted its report and recommendations on the three closed sugar estates, Opposition Leader Bharrat Jagdeo has warned against privatisation during this period, noting that once the People’s Progressive Party (PPP) gets back into Government, it will not recognise any such deal, since the Government has fallen following the December 21, 2018 no-confidence resolution.
Jagdeo made the statement at his weekly press conference on Thursday.
In 2017, Government announced plans to minimise the local sugar industry with only three estates in operation, and divest the Guyana Sugar Corporation’s remaining assets. Since then, several entities have expressed interest in acquiring the assets.
On Tuesday, it was reported that PwC has submitted its report and recommendation on three bids made for the privatisation of the Enmore, East Coast Demerara; Skeldon, Berbice and Rose Hall, Berbice estates to the National Industrial and Commercial Investments Limited (NICIL).
However, the Opposition Leader pointed out that instead of selling off, steps should be taken to resuscitate the industry in full capacity so that the workers can start earning an income again.
“We are not recognising any deals. That is not the routine. When I spoke about the routine functioning of Government, it does not involve privatisation now. Any privatisation done in this period with a Government that has fallen, with a Government that should had resigned, with a Government that is on a caretaker capacity would be seen as an illegal arrangement,” the former President added.
Jagdeo told reporters that the only investor that would enter into a deal with a fallen Government is one that is into underhand businesses and with the intention of getting a lucrative deal before a new government gets into office.
In the report submitted to NICIL, PwC offered its recommendations with regard to three qualified entities as well as the way forward. Additionally, PwC said that the information would be forwarded to Cabinet which has the option of accepting the recommendations or rejecting them and restarting the process.
Initially, the latest information prior to the report suggested that some five companies were interested in the three estates; however, in the final report PwC said that it narrowed those companies to the chosen three based on a number of criteria. Additionally, the two rejected companies did not raise an objection when they were informed according to the PwC’s Wilfred Baghaloo, who spoke to the State media on Monday.
However, on Thursday, Jagdeo said what was revealing about the report is the fact that it spoke nothing to the valuation of the closed estates.
“We are worried about the Pricewaterhouse report and you notice that one thing has not come out the valuation of the sugar estates. Part of their TORs [Terms of Reference] is to place a value to the sugar estate and we have not seen the Government releasing their figures of what they have valued these estates at. So we will continue to be very vigilant in this regard,” he told the media.
Since coming into power, the A Partnership for National Unity/Alliance For Change (APNU/AFC) coalition Government embarked on a mission to downsize the sugar industry claiming that it was a sinking ship. To date it has closed the estates at Wales, Enmore, Skeldon, and Rose Hall leaving more than 7000 persons without a job. The closures began in 2016 and to date Government is yet to come up with a plan to cushion the ripple effect the massive loss of jobs has had on the social development of the country.
Meanwhile, as part of efforts to sustain the minimised GuySuCo and bring it into a state of profitability and financial stability, NICIL set up a Special Purposes Unit (SPU) and secured $30 billion, being sought in the form of a syndicated bond, to support the industry.
Since this announcement, 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.
Ever since Jagdeo has maintained that the $30 billion should have been used to maintain the industry without closing any estates. He reiterated this position at his press conference, adding that if re-elected, the PPP would reopen the closed estates while outlining the plan for doing so.
He noted that the PPP would have to subsidise the industry for a period while he aims for profitability, but noted that the multifunctional; benefits are too many to ignore. Pointing to those benefits, he explained that drainage and irrigation was top class in those communities, benefitting not only cane farmers but others as well. Additionally, the contribution to the National Insurance Scheme and the Guyana Revenue Authority are far too large to ignore.
“The bottom line is it would not be profitable immediately, but it is about keeping people in jobs. It is doable and we have to look at the multifunctional benefits. We can finance the sugar industry…we did that before and kept the economy going,” Jagdeo said.