GuySuCo being stymied by NICIL under Heath-London’s control
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Relations between the Guyana Sugar Corporation (GuySuCo) and the National Industrial and Commercial Investments Limited’s (NICIL) Special Purpose Unit (SPU) have deteriorated further following the death of NICIL’s head Horace James in January as Colvin Heath-London is acting as head for both NICIL and the SPU and GuySuCo’s management believes he is stymieing their work.
“SPU and NICIL is holding us to ransom…we are not getting monies for our programmes as we should and a lot of work is held up,” a senior executive of GuySuCo told this newspaper last week.
“Mr James was bringing us to a headway and with our new Chairman and we believed that this year things would have kicked off excellent for us. Sadly, as you know, he passed and his successor was… the very person we had problems with. I don’t have to say more…,” another executive of the corporation said.
This newspaper has reached out several times to Heath-London but all attempts have been futile. He heads the SPU and is currently acting as head of NICIL.
Minister of Finance Winston Jordan, who is responsible for both entities, told this newspaper when contacted, that Heath-London said that he will not speak with this newspaper as “he don’t like” the reporter but will issue a press statement. However, Jordan said he could not say when the statement would be issued. Jordan was asked for an update on the $30 billion bond that the SPU had obtained for GuySuCo and which it controls, and the latest developments as it pertains to the divestment of the shuttered estates. He said that Heath-London will address those.
The discord between GuySuCo and NICIL is seen as deeply embarrassing to the government and this newspaper was reliably informed that at one stage, it saw President David Granger himself calling to find out “what was truly happening”.
GuySuCo’s executives asked to speak on condition of anonymity, as they bemoaned the state the entity is currently in. The executives said that the entity’s performance last year could have been better and while they did not give the corporation’s financial standing as at 2018, they all said that the performance was due to the SPU not giving GuySuCo funding to kick start enhancement projects.
Nonetheless, they said that they achieved the production target for the year 2018, although it was significantly low at 103, 000 tonnes of sugar, and workers were able to get a bonus.
Trickle
They believe that this year, if money continues to trickle in as happened last year, their situation would be worse as they have no subvention from the 2019 national budget.
“Mr London is now acting as head of NICIL. Mr James brought some professionalism to the process but now we have gone back to a holdback of the funds. Because of the holding up of the funds, we were not able to do our tillage and planting programme. At Blairmont, we could not achieve much. You have to remember we are not getting any subvention from government now which means we have to get all our money from sales or divestment profits. What we want is a professional system with NICIL-SPU where they can understand our operations and importance of the timely disbursements,” one official said.
“This year’s first crop is a reflection of the investments from last year. It is not going to be as good as it could have been. That is because we could not have done the tillage and planting. The procurement process for machinery for the tillage and planting, so we can get to the stage where we improve our yield, is also on hold, so us not getting the input funding we need has affected our procurement process. We have had to extend our strategic plan. If this continues we will have to extend to 2022 or 2023. On the face, people are seeing it as GuySuCo but they do not know what we are dealing with. After 28 months, the SPU has not delivered anything it said it would do for us, except for the completion of the valuation of our assets. We can only say as much now because we don’t even get an update or know what is going on with our own assets,” the senior official added.
Over the last two years, four sugar estates: Wales, Enmore, Skeldon and Rose Hall have been taken out of operation and thousands of workers laid off.
PricewaterhouseCoopers (PwC) has been contracted by the SPU to undertake valuations of GuySuCo’s assets in order to secure prospective investors while the SPU secured, through local financing arranged by Republic Bank Limited, a $30 billion bond.
The valuations were completed and prospective investors were identified through a process. Bidders were narrowed down to three and a report and recommendation on the way forward was submitted to the steering committee of NICIL, including the preferred bidder or bidders.
James had told this newspaper that it will be Cabinet that will make a final decision and he had hoped that process would have been completed by the end of February. “PwC would give the score, because they will use a scoring system for the business plans as they evaluate them in terms of technical and financial aspects and that sort of thing. They will look at the bids, score, make their evaluation and recommendations but we still have to submit to Cabinet,” James had said while noting that Cabinet will make a decision on the information that PwC and the steering committee submits.
“I hope we are talking early next year. Yes, I hope by then [the end of February] that we would see them sold off,” he had added.
Triggered
Given the passage of the December 21st no-confidence motion which has triggered early elections, it is unclear if government will go ahead with the sale of the estates.
And as it pertains to the bond, NICIL had boasted that “A full GYD $30B has been secured” and they had requested $17 billion in the first tranche and “will receive the remainder on request.”
GuySuCo’s executives said that they have to date received “a little over $3 billion” from the money and it came in tranches. One executive remarked that “it was nothing to talk about because we are not getting the machinery and other requisitions needed to see the transformation promised”.
“We achieved our targets which means that from sales we have gotten X amount but if you ask about capital investment, it is another matter. I really believe that the SPU wanted us to fail. We have had machinery laid up since the estates are closed and you know what happens. We need all of that again in addition to other tractors and vehicles. We have to now find billions to purchase new equipment. If you have somebody who really understands divestment, that would not have happened,” one source said.
Raising questions for GuySuCo also is why the SPU brought in one person to collect over $3 billion in what it termed “scrap metal.”
“We understand that one person is supposed to get the contract for over $3 billion in scrap metal from here. We are not even being told who the person is and how it is they came to get that contract,” one executive said.
Other red flags were raised when a person who was only identified as a “Larry Singh” brought in kitchen equipment to begin running GuySuCo’s club, pool and lounge.
Clashes over the use of the club is just one of the many complaints made by the GuySuCo managers, who say their staffers have been subjected to disrespect by the SPU, which they have accused of authoritarian behaviour and unprofessionalism.
In November of last year, the SPU reportedly organised a Bar-B-Q to which members of the public were invited. However, GuySuCo’s security personnel at the premises were given instructions not to allow members of the public into the compound. It then also recommended that the SPU be evicted from GuySuCo’s LBI compound, unless it agrees to comply with the policies under which the sugar company operates.
“This situation has reached a highly unacceptable stage and therefore requires immediate intervention from all relevant authorities,” an extract of a letter from Managers of the estate to CEO Harold Davis Jr had stated.
“We would like to state that since the establishment of the Special Purpose Unit in August, 2017, the relationship with GuySuCo has been one of much turbulence, disrespect, unprofessionalism and some activities have even bordered on illegality. We are of the strong view that the situation has deteriorated to a state where the Ministry of Finance, as the principal agency for NICIL/SPU now has to take the necessary actions to ensure that the NICIL/ SPU operates in a manner in keeping with accepted professional norms and practices…,” it added.
Managers say that Heath-London has moved into Regional Executive’s residence and is using that as a medium for persons to enter the compound. “There are events at the lounge and persons that come, tells the security that they are a guest of Mr London. They have to be let through and that compromises security here. We have chemicals here and other sensitive material,” one executive said.
“This situation needs urgent government intervention. No one is hearing about what is happening here and they believe that it is just incompetent GuySuCo staff here. They do not know the daily trials. We have had to work hard to maintain…ensure we met our target and not let the destabilization get to the estates themselves. We know we can do so much more because we have a plan. We are just not getting the support to execute that plan. Nothing has changed since our last letter. We should be working together for the betterment of this industry but there is unprofessional behaviour. Someone has to step in, someone has to step in soon,” the official added.