President David Granger Friday said that that the government would ensure that the thousands of sugars being sent home at the end of the year get their severance pay.
“As far as retrenchment benefits or the termination benefits are concerned, the government is responsible for ensuring that the Sugar Corporation fulfils its obligation to sugar workers,” Granger said at a press conference at the Ministry of the Presidency.
The Guyana Sugar Corporation (GuySuCo) will send home an estimated 3, 500 workers by the end of the year as part of plans to restructure the sugar industry. The decision represents the largest retrenchment by any corporation, public or private, in recent history.
The government had pledged to unveil a diversification plan to ensure continued employment for workers being sent home, but no major effort has materialised.
By the end of the year, estates at Rose Hall, Skeldon, Wales and Enmore would cease operations. Only three estates are being kept in operation – at Albion in East Berbice, Blairmont in West Berbice and Uitvlugt on the West Coast of Demerara.
The government has budgeted a subsidy of $6 billion for GuySuCo next year to run the operations of the estates being kept in operation. GuySuCo needs an estimated $5 billion to cover the severance package for workers.
The government has set up a Special Purpose Unit (SPU) to manage the divestment of GuySuCo. The SPU has chosen the firm, PricewaterhouseCoopers to evaluate the assets of the Corporation. The assets of all of the estates being closed will be placed under the control of the SPU.
“As far as the plan is concerned there needs to be a lot more work by the SPU – which comes under the Ministry of Finance and that is the agency that will be responsible for the smooth transition of those parts of the industry which would not be remaining in production under the Guyana Sugar Corporation,” Granger stated.
He said the SPU is in negotiation with foreign investors.
“And I am confident before too long we would have a plan which would explain in greater detail how the lands would be disposed of,” the President stated.
Granger said that the government was concerned about protecting workers’ livelihoods and that is why $31 billion was poured into the industry over the last three years.
“We understand the plight of workers and we did not want to take any rash decisions which would jeapordise their quality of life,” he stated. The President said the government needed to arrest the haemorrhaging of the sugar industry.
“The sugar industry is not being shut down, it is being consolidated and we hope to have three mega estates – one in East Berbice, one in East Berbice and one in West Demerara; and we want to make those mega estates viable and profitable,” Granger stated.
He said the government was appreciative of the impact the closure of the other estates will have on the rural economy and the rural population.
Overall, sugar production is projected to decline to 152,000 tonnes by the end of the year, a 17.2 percent reduction compared to 2016‘s output.
By 2020, GuySuCo aims to reduce sugar production to just three factories and with 10, 000 workers, which would be 6,000 less workers than it currently has.
The Corporation sees itself being able to produce 150, 000 tonnes of sugar annually in the next three years from the estates that would be kept in operation.
