Potential investors for sugar estates want level playing field

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Bids for the privatization of the Enmore, Skeldon and Rose Hall sugar estates closed on Wednesday at 16:00hrs.

According to Managing Director of PricewaterhouseCoopers, Wilfred Bhagaloo, a total of ten envelopes were received.

While he could not state the exact number of bids contained in those envelopes [catering for companies bidding for more than one estates], Bhagaloo disclosed that the majority of the companies are from the region and one company is registered in Florida.

Following a meeting held with the potential investors on September 25, 2018, one of the major concerns raised is ensuring a level playing field as the Government still owns and operates three estates.

“The private sector’s natural concern is ‘how am I going to compete with Government?

‘How am I going to compete in terms of access to markets…access to cane variety, access to the nursery, access to logistics, access to shipping,’” Bhagaoo explained at a news conference held on Thursday at NICIL’s office on Camp Street, Georgetown.

Managing Director of PricewaterhouseCoopers, Wilfred Bhagaloo

Other concerns include the functionality of the factories, which were closed at the end of 2016 and 2017, and access to markets currently enjoyed by the Guyana Sugar Corporation (GuySuCo).

The Government has since reopened the Enmore and Skeldon estates to upkeep the infrastructure.

While the Government has made it clear in an Information Memorandum sold to bidders that their plan for the estates needs to entail cane cultivation, it does not require them to produce sugar.

“You can use the cane for anything; cosmetics, molasses, liquid sugar, bagasse, energy, to drive cogeneration plants, it can be used for many things,” Bhagaloo pointed out.

Privatization specialist of the Government’s Special Purpose Unit (SPU), Shawn Persaud, explained that the Government chose this path since the lands and infrastructure at the three estates are more suited for sugarcane cultivation.

“Someone buying (for rice for example) will not want to give us the price we will expect for the infrastructure there,” he explained.

Persaud added that this route also ensures that sugar workers will regain employment at the estates.

“We made very clear that there would be some importation of labour but that will be technical people if they can’t find it here but our casual workers have to be employed,” he told the media.

Privatization specialist of the Government’s Special Purpose Unit (SPU), Shawn Persaud

The Government laid off over 5,000 sugar workers with the closure of the Rose Hall, Enmore, Skeldon and Wales sugar estates in 2016 and 2017.

The company has begun analyzing the bids and has promised to release the names of the bidders on Friday.

Some of the areas that will be examined include the financial capacity of the bidder, experience in the sugar industry, quality of governance, quality of management, extension programme available for cane farmers and their development plan outlining how long it will take to implement the project.

According to the Information Memorandum sold to the bidders, the Government at this stage does not have to accept the bids and can opt to reopen the process.

The company is expected to take seven days to complete its initial evaluation.

The Government had previously announced that 70 companies expressed an interest in the estates but those companies, when contacted by PricewaterhouseCoopers, did not respond.

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