Govt mulling GuySuco bailout to avoid sugar industry’s shutdown

Last Updated on Wednesday, 27 May 2015, 18:43 by GxMedia

by Zena Henry

The ailing Guyana Sugar Corporation (GuySuCo) will soon know whether it will get a government bail-out to avert a total shutdown of the sugar industry, according to Finance Minister Winston Jordan.

With the new Administration now settling in following their win at the 2015 General and Regional Elections, it is unclear how that “significant” sum can come to the rescue, especially when there is no budget to work with.

Finance Minister Winston Jordan said the government “is currently examining all options to assist GuySuCo.” He explained that without a budget, the government is reviewing possibilities of getting money to the industry before Sunday.

He did not say whether the government was in receipt of the actual amount needed to reverse the current situation, but advised that as soon as a decision is taken the public will be notified.

Guyana Agricultural and General Workers’ Union (GAWU) President Komal Chand is already on record as having told Demerara Wave, that should the industry not receive the bailout cash by this coming Sunday, there is likely to be a shut down.

This would have been the information related to the worker’s union by GuySuCo’s Chief Executive Officer (CEO) Dr Rajendra Singh on Monday May 25. Chand said that the union tried to ascertain from the CEO the amount of cash that would be needed to aid the failing sugar industry, “but he gave no figure.”

The union President said he suspects that a “significant” amount of cash is required since, “it is not only wages we are talking about, but expenses to the supply of material and spare parts, among other things.”

He said, “If this problem is not rectified by Sunday, GuySuCo will be unable to give out work.” In the meantime, Chand said he has not approached the government to see how they are moving ahead with addressing the situation.  He said he is looking forward however to the government’s intervention, “since it is some 16,000 workers we are talking about here.”  

The sugar industry was a big topic on the political campaign trail in the last few weeks. All contenders knew that patting the head of the industry meant a significant number of votes coming from this massive sector, even if it meant continued financial assistance to a dying sector.  Both main political parties promised large amounts of cash to brace the industry. A major crisis at this early stage for the new government has raised some amount of suspicion that something might be amidst.

GuySuCo’s CEO was a political candidate on the People’s progressive Party (PPP) list and Agriculture Minister Noel Holder already told reporters that Singh is “dishonest.”

Holder claimed that spoke with the sugar CEO a week prior and there was no mention of the company being strapped for cash, by Sunday. He however pledged government’s support of the industry which is also scheduled to have a forensic audit under the new government.

The PPP had promised a GUY$20 billion rescue package for the industry had it been re-elected to office.

Heavily indebted to local and foreign banks, the state-owned sugar corporation’s wage and salary bill is almost 70 percent of revenue.