Opposition MP, Speaker, Agriculture Minister clash over GUYSUCO’s cost of sugar production

Last Updated on Tuesday, 22 September 2020, 16:56 by Denis Chabrol

Despite intense pressure from opposition coalition parliamentarian Jermaine Figueira to disclose the cost of producing one ton of sugar to justify the spending of GYD$3 billion on reopening several sugar estates that had been shuttered by the David Granger-led administration, Agriculture Minister Zulficar Mustapha on Tuesday maintained that the the question was irrelevant to the consideration of budget estimates for that project.

The A Partnership for National Unity+Alliance For Change (APNU+AFC) parliamentarian insisted that if the House is to approve GYD$3 billion for GUYSUCO, the House needed to know whether the State-owned Guyana Sugar Corporation (GUYSUCO) was profitable.

The Agriculture Minister said the Committee of Supply was dealing with a line-item in the 2020 estimates expenditure.

House Speaker Manzoor Nadir said Mr. Figueira’s specific question would be answered “comprehensively” by the Agriculture Minister on October 5, 2020.

Mr. Figueira: Could the Honourable Minister state what is the cost in US for Guysuco to produce one ton of sugar compared to its selling price?

Mr. Mustapha: Mr. Chair, I don’t think that is in the estimate but the main objective of this government is to ensure we come at a break-even price, we reemploy people and at at the same time we make a profit when we are here

Responding to an opposition heckler, the Agriculture Minister responded “That’s why you break it. That’s why you over there. You”ll never come back here.”

But Mr. Figueira did not relent, asking the Minister to inform the House whether GUYSUCO is a government business or it a benevolent fund.

That question resulted in a clash of words between the opposition parliamentarian and the House Speaker. “Honourable Member… Everyone knows what GUYSUCO is. Reports, reports on GUYSUCO have been tabled annually in this House. Honourable Member Mr. Figueira, please continue.

Mr. Figueira: Sir, that is an assumption.

House Speaker: It is not an assumption. The annual reports have been tabled for a going concern in this House.

Mr. Figueira: Sir, we are here to provide answers to  the Guyanese population, not the members in this House.

House Speaker: Thank you very much Honourable Member. If you don’t have a further question

Mr. Figueira: I do, I do. My question still remains. Could the Honourable Minister… 3 billion dollars being allocated to GUYSUCO and the public needs to know what is the production cost for GUYSUCO to produce one ton, only one ton of sugar in US dollars. We need to know. You are selling it on the world market. We need to know the comparative price

Opposition A Partnership for National Unity+Alliance For Change (APNU+AFC) frontbencher Khemraj Ramjattan’s  question on whether there was any specific study done to determine how much it would cost to reopen the estates and factories also did not yield a specific answer. “We have done, and there are a number of studies that have been done by economic organisations, trade unions and I don’t want to call the name of an international organisation that did a study not so long ago and the feasibility and results of those studies (are) that we have to ensure that we put 3 to 5 billion dollars at least to start up these estates,” he said.

Mr. Mustapha did not rule out more money being required.

Responding initially to questions about the reopening of the Guyana Sugar Corporation’s estates, Mr. Mustapha said the GYD$3 billion would be spent on reopening thee Rose Hall, Skeldon and Enmore Estates, as well as recapitalising the Albion, Blairmont and Uitvlugt Estates that are currently grinding. He explained that GUYSUCO has informed him that the National Industrial and Commercial  Investments Limited (NICIL) has refused to disburse funds from a GYD$30 billion loan for recapitalisation. “As a result of that, we have found it and we have said that we will revitalise sugar and we will reemploy Guyanese who were dismissed by this previous government,” he said.

Mr. Ramjattan upbraided the Agriculture Minister for failing to include a project profile for such a large project before asking for a breakdown of the costs for reopening and recapitalisation. “You just don’t put 3 billion blanket like that and no project profile. That is against the FMAA (Fiscal Management and Accountability Act),” Mr. Ramjattan said. “We have a technical team at these estates right now looking at the needs of these estates and see what we can do to  get them opened as early as possible. We have to do a lot of work because a number of equipment and a number of other things, assets were sold out at cheap prices to friends and family at Rose Hall Estate,” he said.

Mr. Mustapha listed the GYD$2.2 billion reopening costs as GYD$778 million so far for Enmore Estate, GYD$710 million for Rose Hall and Skeldon GYD$711 million. He said the remaining GYD$800 million would be spent on the other estates that account for 40 to 60 percent grinding capacity “because of neglect over the past five years.” The Agriculture Minister could not give specific dates for the actual reopening of those estates because technical work was continuing and the cultivation was destroyed. Cautiously optimistic, he added “I am hoping that first crop, second crop next year we should have sugar coming out of these factories.