GuySuCo unable to pay wages; $1.6B needed to keep the industry afloat

The Guyana Sugar Corporation (GuySuCo) will not be in a position to pay wages to sugar workers from August 21, Minister of Agriculture Zulfikar Mustapha revealed during a virtual press conference on Tuesday. It was found that the sugar company needs $1.6B from now until the end of the year to stay afloat.

The Minister said after assessing the state of affairs of GuySuCo it was found to be in an extremely depressing state.

The three remaining sugar estates are currently suffering from lack of capital funding and this has negatively affected production. Sugar production had a shortfall of 9461 tonnes in the first crop and it is likely that in 2021 the production will continue to be weak due to low achievement this year.

“The cooperation will not be in a position to pay wages from the 21 August. Under the previous administration, a request was made to [National Industrial and Commercial Investments Limited] (NICIL) for an amount of $1B but only $550M was received to date,” the Minister said.

The additional $1.6B is required as revenue sales from sugar and molasses will not be sufficient to cover expenditure for this period.

“Achieving consistent and adequate cane supply is a problem across the industry; there is a shortage of essential inputs like fertilizer and chemical which are vital to canes in the second crop and unless they are procured cane growth will be adversely affected and directly impact on future production,” the Agriculture Minister said.

It was also noted that NICIL is still to pay an outstanding $9.5B to GuySuCo from the $30B loan secured in 2018. The previous APNU+AFC government took the loan through NICIL to assist GuySuCo however, only $10.2B was made available to date.

“It seems that this entire scenario was shredded in secrecy; NICIL has been disbursing money to GuySuCo but they are not telling them how much they are collecting or drawdown from the loan of $30B, they are not telling GuySuCo the terms of repayment,” the Minister stated.

The Minister further reiterated the PPP’s government promise to reopen the four closed sugar estates but could not provide a timeframe or how much money will be needed to reopen these estates.

He said a conditional survey of the various estates needs to be done along with an assessment of the assets with NICIL.

The former Government closed the Rose Hall, Skeldon, Wales and Enmore sugar estates in a grand plan to restructure the sugar industry. As a result, thousands of sugar workers were fired in what was deemed the largest retrenchment in the local public and private sector.