Gov’t under-budgeted $3.5B in severance pay for sugar workers

-  But Harmon says workers will get their “entitlement”


By Neil Marks


With thousands of sugar workers jobless and unsure about when their severance pay will be given, Minister of State Joseph Harmon today indicated that the government underestimated the cost by some $3.5 billion but said workers will get their “entitlement under the law.”

He said that the severance pay was catered for in the $6.3 billion subvention for the Guyana Sugar Corporation (GuySuCo) this year, but of that amount, just over $500 million, was designated for severance pay.

On Wednesday, January 10, 2018, President David Granger indicated that the severance pay would cost $4 billion and half of that will be paid by the end of this month and the other half will be paid within six months.

Minister of State, Joseph Harmon

“In December/January, the exact figures began to emerge and that is why we had to make additional amounts available,” Harmon said at the weekly post-Cabinet news briefing.

In fact, sugar workers at the Rose Hall estate in Berbice began receiving their severance letters at the end of November 2017 and those on the other estates began receiving theirs shortly after.  

To meet the payout to sugar workers, President Granger said Wednesday that programme budgets of the various ministries will have to be scaled back.

“The impact that that has on the rest of society is something we have to address as a nation,” Harmon stated.

Sources at the helm of GuySuCo say the management team have estimated that the severance pay of $4 billion currently catered for would be woefully short than what would actually be required. 

Apart from Rose Hall, operations at the Skeldon factory in Berbice, the one at Enmore, East Coast Demerara and the Wales Estate on the West Bank of Demerara ceased as of December 29, 2017, and all assets, movable and immovable, have been handed over to NICIL, the government’s asset holding and investment arm.

A Special Purpose Unit (SPU) within NICIL has been tasked with the divestment of the assets of the four estates.

Harmon said, according to the SPU, “there is significant enthusiasm by foreign and local companies, for the divestment of the assets of GuySuCo.”

He alluded to “a serious expression of interest” by a local company in one if the estates; Demerara Distillers Limited (DDL) has expressed an interest in owning the Enmore factory. 

Harmon said the interest in the estates causes the government to see the restructuring plan for the industry as an “opportunity” and not a “crisis.”

“We recognize the importance of the sugar workers, we recognise the importance of their families and we will continue to do what is in the best interest of the peoples of the country,” Harmon stated.

The government estimates that the three estates that will be left in operation will produce the 147, 000 tonnes of sugar needed to meet local and overseas markets.

The government decided to close the sugar estates, saying it could not continue to bail out the industry; they have been subsidising the industry with $1 billion every month for the past two and half years.

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