Finance Minister proposal on GuySuCo Chair draws opposition at Cabinet
A surprise proposal from Finance Minister Winston Jordan that the head of the unit overseeing the divestment of sugar estates be the new Chairman of GuySuCo encountered opposition at Cabinet on Tuesday and the decision has been postponed.
Sources told Stabroek News that in a surprise move, during Tuesday’s Cabinet session, Jordan proposed that Head of the Special Purpose Unit (SPU) Colvin Heath-London be named GuySuCo Chairman, arguing that it was the soundest economic decision to instal one policy director if the two entities are to be aligned to achieve maximum output.
The matter of the appointing of a new GuySuCo Board was on Tuesday’s Cabinet’s agenda. The old Board, Chaired by Professor Clive Thomas, came to an end on February 14th of this year. A statement from the SPU last week informed of the Board’s dissolution saying it that it was a decision by government holding company, NICIL. In addition, NICIL instructed GuySuCo to freeze all hiring and not to renew any employee contracts.
“The life of the board of GuySuCo came to an end on February 14 after the Board of Directors of NICIL, in a Special Board Meeting, made the decision to instal a new board focused on the transformation of the corporation as envisioned by NICIL-SPU,” the statement said
“The NICIL board also instructed GuySuCo to freeze all hiring and to not renew any employee contracts that are expiring at this time. NICIL has begun working with the management team at the corporation to implement management changes, some of these changes are already being implemented and more are expected to follow in the coming weeks,” it added.
In his presentation on the way forward for GuySuCo, Stabroek News was told that Jordan told Cabinet that he had made a decision that Heath-London be the corporation’s Chairman.
But some Cabinet members argued that the industry was too important to have “rash and non-consultative decisions” just sprung on them and as such could not accept Jordan’s proposal.
According to sources, the objection was on the grounds that the decision seemed to be straying from plans already laid out in a white paper which was taken to the National Assembly.
Jordan reasoned, sources explained, that there would be no conflict of interest having HeathLondon head the SPU and Chair GuySuCo’s Board as it would eliminate the two sides “warring with each other as we had been seeing” and that he was familiar with the works of the SPU head.
The SPU was set up under NICIL to oversee privatisation of GuySuCo’s estates.
This newspaper understands that Heath-London did not ask to be named Chairman but was offered the position by Jordan and accepted because the two share similar views for the sugar industry here.
But sources say the Finance Minister’s reasoning did not sit well with Cabinet members who voiced their disapproval and a decision was taken to put off the naming of the Board until for further analysis.
The SPU had also announced that funding of $30 billion (US$150m) is being sought for the sugar industry over the next four years.
The funds, the statement said, will provide a much needed capital injection, support infrastructure maintenance and upgrades at the Albion, Blairmont, and Uitvlugt estates, which the state is keeping, and develop new cogeneration capacity to support estate operations and sell to the national power grid.
There had been tension between the SPU and GuySuCo over access to the estates and control over machinery among other areas.
But the SPU used the statement to announce that the two sides were working collaboratively for the overall good of the sugar industry here.
While they wait on a new Board, both entities said that they have pledged to work together with Heath-London saying, “The one thing that is paramount right now is that we work together. We must work together to ensure that we get the best deal from the process for the estates put up for privatization, and that GuySuCo is successful in turning a profit with the estates it has retained.”
For his part, acting Chief Executive Officer of GuySuCo, Paul Bhim, said that “the objective behind the closure of some estates was to make them available for privatisation and ensure that GuySuCo becomes profitable. The best way to achieve that today is for GuySuCo management and the SPU team to work together for the greater good.”
Among key collaborative works between the two sides
would be the restarting of the Enmore Estate to immediately cater for providing molasses for Demerara Distillers Limited, the statement said.
Enmore was one of the four estates closed by GuySuCo last year as part of their plan to downsize the corporation.
However, the SPU said that it was concerned that there is cane in the Enmore Estate fields that needs to be harvested and processed since it represents significant revenue potential.
It explained that while the SPU will provide the management for the restarted estate operations, GuySuCo will provide the technical support and talks were being had to explore advance payments from DDL for the molasses to be produced.
According to the SPU, PricewaterhouseCoopers (PwC), the international financial services provider working on the valuation of the GuySuCo assets now under the control of the SPU for privatisation, is concerned that in order to attract the best investors and secure the highest price for the estates, they need to be seen as fully functioning operations and facilities.
“Closed estates will not be attractive to potential investors. The deal with DDL, if approved by the boards of DDL and NICIL would allow the SPU to meet the PwC recommendations for a quality privatisation of the estate,” the statement said.