Jagdeo blasts Govt’s secret deal with T&T firm

Skeldon Estate takeover

Government is facing severe criticism over its secretive deal with a Trinidadian company for a possible takeover of the lucrative Skeldon Estate, which belongs to the State and is currently under the management of the Guyana Sugar Corporation (GuySuCo).
Opposition Leader Dr Bharrat Jagdeo strongly criticised the Government for entering into this deal without any consultations with stakeholders beforehand.

“They claim that this is without prejudice to privatisation. But if you have a secret Memorandum of Understanding (MoU) with someone to assess the entity, then you are already giving one person an advantage over any person who may be interested if you decide to privatise.  So they are busy working these quiet deals and one day we may wake up and find that one of the prized estates in Guyana is gone to a group that knows nothing about sugar or is on middle land without any public valuation of the land, no public tendering but has acquired a deal by the Government,” he told media operatives on Wednesday. The Skeldon Sugar Factory, which is located on the Estate, alone is worth US$200 million, so the total value of the Estate would amount to billions.
Jagdeo contended that this was one of the many actions of the Government which he considered “totally reprehensible”.
“You do not speak with the parliamentary Opposition. You know, just recently, they called us in December, after everything else and told us they want to talk to us about it, but the secret MoU was already signed, now the story is in the news,” he outlined.
The Guyana Times newspaper broke the story on Tuesday that Trinidadian company D Rampersad and Company Limited (DRCL) was likely to rake in major benefits from the Guyana Government, including favourable tax incentives for the development of an integrated sugarcane processing facility at the Skeldon Sugar Estate, after the MoU was inked in December for the undertaking of a feasibility study.
The MoU was signed without full disclosure to the Guyanese public and without any public notice or public tender. The company has no experience with any agricultural enterprise, and provides engineering services to the automotive and oil industries in T&T.
Notably, however, as witness to the signing was Noel Rupie Shewjattan, the owner of Auto Fashion Store on Garnett Street, Campbellville, Georgetown. Auto Fashion Store also has no experience in the agricultural sector.

Government denial

Contacted on the matter, however, Agriculture Minister Noel Holder contends that there is no secret arrangement.
“There was a meeting when we met with the Opposition and the unions …to try to get them on board for the way forward for GuySuCo. At that meeting, the question of the MoU came up and it was provided to the Opposition to look at. The Opposition is well aware of it because it was given to them by the Government. So I don’t know what is the secret deal, they have the MoU,” Holder explained.
The Minister conceded that the company was currently assessing the Skeldon Estate lands to determine if it would be favourable for it to make a proposal to Government for the diversification of the estate, including the production of ethanol.
“There is no commitment on either side, (they will) come down here to take a look and if (they) want to make a suggestion to us, then fine, we’ll take a look at it…They are just coming to look, the best I can call it is a familiarisation, They will look to see what Skeldon has to see if it make sense for them to even do a feasibility study,” Holder explained.

Massive concessions

However, the MoU – seen by this media house – outlines that the company will be conducting a feasibility study, which is proposed to commence on April 3.
DRCL is slated to benefit tremendously if its project proposal is approved by the current coalition Administration. From the size of DRCL’s operations in Trinidad, it appears doubtful it would be able to finance a project of the magnitude proposed.
According to the MoU, some expectations in the event a definitive agreement is entered into would include access to key infrastructure, favourable combination of tax incentives, and land for sugarcane cultivation and infrastructure.
The company is also set to receive reasonable approval cycles, guarantees on minimum product take-off by the Government with respect to electric power and fuel ethanol, guaranteed pricing formulae and power export provisions.
This means that while the company will convert sugar cane into ethanol and electricity from bagasse, the Government will assume the responsibility of purchasing the products at some yet undisclosed price. For ethanol to be used as fuel by motor vehicles, their engines would have to be modified. It was not disclosed if the Guyana Government or DRCL would bear the cost of the engine modification.
The integrated sugarcane processing facility will include developing an integrated sugar-to-ethanol and electric power project. While sugar will not be produced, the Skeldon factory will still have to process the sugar cane all the way to the molasses stage, but the diffuser for extracting the sugar will become redundant.
Basically, the feasibility study will examine the cultivation and harvesting of sugar cane and sugarcane processing.
It will also look at the production of fuel-grade ethanol, and the production of bulk rum for local, regional and international markets.
The feasibility study will also focus on power production from bagasse, production of high-test molasses, the construction of a liquid bulk terminal and the development of a solar power generation facility. The findings of the feasibility study will provide critical information and set the platform to make a definitive project proposal to the Government of Guyana.
The Agriculture Minister said the Guyana Office for Investment (GO-Invest) would deal with the matter if the company makes such a proposal.