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04
Jun 19

Government is nearer to a deal with a consortium for the iconic Rose Hall estate in Berbice with stakeholders hopeful for a mid-year announcement.

However, the current political climate and delay in information from the Guyana Sugar Corporation (GuySuCo), under whose remit the closed estates (Skeldon, Rose Hall, Enmore and Wales) fall, has delayed the process with the two other estates.

The matter of the delays of information has been taken to Cabinet with Wilfred Baghaloo, partner of consultant, PricewaterhouseCoopers, which has been hired to ensure the privatization process is above board, yesterday saying he has written to the ministers a number of times for information.

With regards to the Rose Hall estate, it was disclosed that the investors are a consortium of Indian, Ghanian and Guyanese.

They are interested in sugar cane and sugar-related cosmetics.

Currently, the negotiations have advanced to a stage where draft agreements are being exchanged before a deal could be brought to Cabinet by this month end.

Also present with Baghaloo at the press conference on the privatization process was acting head of the National Industrial and Commercial Investments Limited (NICIL), Colvin Heath-London.

Baghaloo explained that last year, there were advertisements for Expressions of Interest (EoI) with three fixed proposals coming in.

However, local and overseas political events, including the no confidence vote, left a number of investors nervous.
It is the intention to re-engage the investors whose interest had waned, it was disclosed.

The officials declined to name the company citing confidentiality clauses and the delicate nature of the negotiations as reasons.

Heath-London insisted that the four closed estates were always treated as going concerns, with over 300 staffers retained permanently for maintenance, among other things.

At Wales, almost 1,000 acres have been placed under rice with local and overseas farmers involved. There are options for dairy farming with two big beverage companies here likely to come on board.

According to Baghaloo, PwC was hired to work with NICIL’s Special Purpose Unit (SPU) to privatize three estates to have them remain in the sugar cane industry. This may not necessarily be in sugar alone.

Baghaloo admitted that there were significant challenges, including a major fact that the transactions will amount for being the biggest sale and transfer of state assets to private sector.

In addition, there were difficulties in determining the assets of each estate.
There were also concerns by investors over the fact that three government-run estates would be competing for scarce resources, including labour.

Perhaps the biggest challenge was getting financials from GuySuCo.

Heath-London said there were some differences in opinion between stakeholders.

He would be referring to GuySuCo and the Ministry of Agriculture which have both been critical about some aspects of the privatization process.

The intensity of the differences was especially evident last year when the assets of GuySuCo were transferred to NICIL, raising objections of the ministry and GuySuCo.

According to Baghaloo, key information like age of equipment, suppliers and other financials were not submitted despite requests to Cabinet and instructions to GuySuCo issued by ministers.

As recent as May 14, the PwC official wrote Cabinet.

With regards to challenges of Enmore, he said that their concerns over the moisture at the facilities with little information forthcoming of the co-generation area at Skeldon.

According to the officials, it was understood for some time now that the privatization and divestment process would never be overnight.

It would not happen in six months, neither within a year.

It was stressed that there are billions of dollars in assets involved and transparency is a must.

It was also pointed that similar processes to privatize sugar estates in Trinidad, Barbados and Jamaica have been going on for years.
In total between the four closed estates there are about 20,000 hectares of lands.

GuySuCo is a major battleground for the political parties with more than 16,000 workers up to 2015.

However, the industry has been producing less and less, demanding billions of dollars annually in bailouts from Government.
Its new factory at Skeldon has never fired and has been sucking GuySuCo’s cash.

In 2015, Wales was closed; the other three estates followed a year later.

More than 5,000 persons lost their jobs.

The privatization and diversification process is to raise cash for the smaller-sized GuySuCo to become more viable.

Source: Kaieteur News

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