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Jagdeo admits Skeldon Sugar Factory not yet fixed; touts other multi-million dollar investments in industry

Hoping to garner votes from its traditional stronghold in the sugar belt and particularly in East Berbice, the People’s Progressive Party (PPP) on Saturday assured that every effort is being made to fix the problem-plagued multi-million dollar Skeldon Sugar Factory and invest in other projects to rescue the industry.

“Clearly, we still have to fix some of them because the factory is not running the way it should run and it has potential to do much more but sugar’s problem is much more complex,”  Former President Bharrat Jagdeo told a news conference on Saturday.

The Guyana Sugar Corporation (Guysuco) had said that the Skeldon Project would have helped to reduce the cost of production, improve sugar quality, increase production to more than 450,000 tons, enhance sucrose recovery, reduce operational costs, improve perational efficiencies and attract carbon credits.

While acknowledging that fixing the Skeldon Sugar Factory is crucial to the recovery of the sugar industry, Jagdeo touted the need to build a refinery and a distillery to broaden the sources of income rather than depend only on the sale of the sweetener

He acknowledged that the US$185 million factory in the PPP stronghold has not yet been fixed six years after it was commissioned.  The opposition, which is seeking to capitalize on votes from the PPP stronghold, has repeatedly assailed government for wasting taxpayers’ money on a factory that is struggling to produce at its projected optimum. Back in July 2014, top officials of the state-run Guyana Sugar Corporation (Guysuco) had said that US$4 million more was need to finance the modification of punt-dumpers to load about 300 to 350 tons of sugar from the vessels into the factory instead of just about 200 tons.

The PPP is on recent record as saying that it was hoping to win back 11,000 votes it lost to the Alliance For Change (AFC) in Berbice at the November 2011 general and regional elections.

Official figues from Guysuco released earlier this week show that Skeldon Estate, in 2014, produced a total of 590,018 tons of cane at 56.23 Tons of Cane per Hectare (TCH), the highest production since the new factory commenced operation.

The corporation projects that Skeldon Estate will produce 657,372 tons of cane at 59.62 Tons of Cane per Hectare, this year, which will represent an 11% increase in cane production and a 6% increase in productivity.

With the industry still reeling from Europe’s 36 percent cut in the price it pays for sugar, Jagdeo said Guyana could not afford to follow in the footsteps of other Caribbean Community (Caricom) countries and scale back production or close the industry altogether because it is a major source of direct and indirect employment in Berbice.  “We don’t have a choice but we have to find a way to make sugar work,” he said.

“We are prepared to work to fix sugar because sugar is not just about Berbice. It’s about the economy,” he said.

Other plans include mechanization to address labour shortages, investment in improving other factories and the introduction of new varieties of cane because the fields are not that productive, said Jagdeo who is Chairman of the recently established National Economic Council.

Guysuco’s production of 187,000 tons in 2013 was the lowest in 20 years instead of the targeted 240,000 tons. Last year, the industry surpassed its lowered target of 216,000 tons to reach 216,147 tons. Industry experts hope that the industry will produce 240,000 tons in 2015.

The corporation owes its creditors, including suppliers and banks, more than GUY$10 billion. At the same time, its annual wage and salary bill is more than 60 percent of revenue.