SPU’s promised molasses output in doubt
-as tensions with GuySuCo’s management persist
GuySuCo is concerned about the vesting order which has placed its assets under the control of the Special Purpose Unit (SPU) set up to oversee the divestment of four shuttered estates as tensions continue to rise between the two in a number of areas, including the claimed production of molasses.
Earlier this month, GuySuCo wrote to Minister of Agriculture Noel Holder lodging an official complaint about the activities of the SPU, which was established under the government holding company, the National Industrial and Commercial Investments Limited (NICIL).
Since that letter, sources say GuySuCo officials have expressed further concerns about the functioning of the SPU, which is headed by Colvin Heath-London, who had been based abroad before taking up an appointment here.
GuySuCo sources says that Vesting Order 45 of 2017 vested movable and immovable property with NICIL and this has led to the corporation having no head office. The GuySuCo source said that the SPU has taken over GuySuCo’s La Bonne Intention Head Office. The corporation had previously given up the Ogle estate to the government.
Corporation sources say that the SPU has also now taken over the GuySuCo Head Office staff club, which was mostly used for training and development. This means that the corporation’s head office staff have no facilities for training. In recent weeks, the SPU has not responded to Sunday Stabroek’s queries on a number of matters.
The GuySuCo sources say that the SPU head has moved into the main house in the GuySuCo LBI compound which was originally used by the regional director.
Molasses
According to the sources, the SPU has not delivered on what had been promised in relation to the production of molasses. The closure of four estates had seen Demerara Distillers Limited (DDL) expressing grave concern about preserving the supply of molasses for its rum production. As a result, DDL and the SPU had begun discussions on preserving the molasses supply.
The GuySuCo sources say that while the SPU set out to harvest 30,000 tonnes of cane and produce 6,000 tonnes of molasses for DDL from the Enmore factory, the Unit produced only 586 tonnes from 7,369 tonnes of cane. Further, the sources said that DDL has not yet collected the molasses and there are questions about its quality. The sources say that what has been produced is more like syrup as opposed to molasses as a byproduct from sugar production.
When Sunday Stabroek had asked earlier this month about ongoing work at the Enmore estate, an SPU source would only say that grinding had come to a halt and would resume in the last quarter of the year.
Further, the GuySuCo sources say that the SPU burnt canes at the shuttered Rose Hall estate, only to realise that they did not have the harvesters to continue the process.
The corporation sources say there are also questions about whether the SPU does have 70 expressions of interest for GuySuCo assets, as apart from DDL, there has been no significant interest shown by other investors.
The sources note that DDL, which submitted a bid for the Enmore estate, has already provided monies for the operating of the Enmore factory and this would give it an advantage over other bidders. Further, the sources say that the DDL money is also being utilized to rehabilitate the GuySuCo Head Office staff club and recreational facilities.
Sources say that the tension between the GuySuCo and the SPU is a further reflection of the disorder in the government over the sugar industry. To date, the government is still to name an official, new board of GuySuCo. What was purported to be a new board chaired by Heath-London had been signified by Minister of State Joseph Harmon. However, this board was not approved by the full Cabinet and the announcement had to be recalled. At last word, Minister of Agriculture Holder was still putting together a new board amid continuing attempts by other sections of the government to have the Heath-London board installed.
Complaints
On May 18th, 2018, Chief Executive Officer of GuySuCo, Paul Bhim wrote
Holder setting out a litany of complaints about the SPU.
According to the letter, Bhim said that on May 17th, 2018, he chaired an urgent meeting based on a request from Senior Managers who wanted to discuss their growing concerns about the relationship with the SPU in its current form and mode of operation.
“The Managers attending the meeting have indicated that based on the significance of the breaches and unprofessionalism experienced since the Special Purpose Unit was established, particularly since the vesting of the assets of [GuySuCo] in December, 2017, destabilization and demoralization within the Corporation have been accelerated.
“Senior Managers are of the view that the burdens on the Corporation have been more than the benefits from the collaboration with the SPU, thus far, and suggested that an evaluation be carried out to review and revise, where necessary, mechanisms for operating and collaboration in the future.
“Additionally, based on some of the information that appeared in the press, recently, and which were untruthful, the Senior Management felt that an urgent press release should have been distributed, this was done on 17 May, 2018, and further actions, as appropriate, will follow...”
The letter listed 13 areas for attention, including the need for clear policy positions on the roles and responsibilities of the SPU and GuySuCo, a clear business model and strategy for GuySuCo and the SPU as a partnership, and breach of confidentiality, including the provision of sensitive corporate information on GuySuCo, its employees and its corporate partners to the media and possibly other unauthorised sources.
The letter also cited the need for the refocusing of the SPU on creating greater value from GuySuCo’s assets, which have been vested and raised concerns about the competence of the SPU in supporting the sensitive restructuring of GuySuCo.
Amidst the feuding in the government over responsibility for GuySuCo, Holder had declared himself no longer responsible for the corporation. However, this position was reversed when it was made clear that the Heath-London-led board had been abrogated.