LiveInGuyana

PNCR SELL OUT AND SHUTDOWN OF GUYSUCO

The PNCR’s suggestion that it would sell off the sugar corporation will have some tongues wagging, because quite a few powerful investors in Guyana would want nothing more than to get their hands on the assets of the Guyana Sugar Corporation (GuySuCo). The proposed sale of GuySuCo if the PNCR wins the next election is music to the ears of some individuals.

Whoever owns the Guyana Sugar Corporation, regardless of the price they pay, owns Guyana. When you think of GuySuCo, you cannot just think of the sugar factories or the offices. You cannot think about annual billion-dollar losses. You also must think about land.
GuySuCo has plenty of land. It is the largest landowner in Guyana. Its estates are extensive and anyone getting their hands on that can be said to virtually own Guyana.
But these estates are also linked to the drainage systems in many villages and it’s GuySuCo that provides drainage services in many areas. No private individual is going to provide these services free once they purchase these estates. What it means is that most of Guyanese living on the coast will have to pay user fees for drainage services to whoever takes over GuySuCo.

And do not believe for one moment that these fees are going to be anywhere near what is presently charged. Whoever buys GuySuCo is going to negotiate the rights to user fees for providing drainage services and these fees are going to be based on market costs. That will make the new owners richer from these fees alone, richer than the entire local government system.
The Skeldon factory cost some 200 million United States Dollars. Whoever makes a bid for GuySuCo is not going to buy that factory or any other factory for that matter.
They are not going to be interested in sugar cane cultivation. If the PNCR believes that it can simply privatise the sugar corporation and therefore simply transfer the running of the sugar estates and factories to the private sector, they are sadly ill-advised.
No private company paying billions of United States Dollars for GuySuCo is going to continue with a loss-making enterprise. They are going to close it down. Even if the sugar corporation is broken up and sold in lots, the new owners are still not going to be interested in sugar. The private sector has no interest in sugar and the US$200M factory is going to become a white elephant. Foreign investors, especially, are not going to be keen on sugar cultivation because there are low-cost producers of sugar elsewhere and therefore no incentive to continue with an ailing and unprofitable industry.
Hundreds of millions of assets are therefore going to be left in the hands of the government and there will be no uses for them. And do not believe that the investors are going to retain those thousands of workers in the employ of the sugar corporation. These persons are going to be put on the breadline.
As much as the PNCR may wish to tie the sale of the sugar company to continued operations of sugar, this will be a non-starter. No private investor is interested in investing in producing sugar on the scale of even the smallest of estates in Guyana. None.
The real interest in the sugar corporation is its land. Some of these lands have been released already for public purposes and for housing schemes. While the government itself often takes credit for the 80,000 house lots that have been built in Guyana, most of the housing schemes are on lands released or sold by the Guyana Sugar Corporation. It is not clear if in the early periods of the PPP administration whether GuySuCo was paid market rates for the lands released, but they certainly were recently. The sale of GuySuCo will mean the end of new government housing schemes, because any additional land for housing development will have to come from GuySuCo.
If the proposed sale of GuySuCo involves the sale of its lands, then those buying these lands will virtually own Guyana. And given the wealth these holdings provide for them, they would also be in a strong position to decide the future of Guyana in the same way that the present economic oligarchy is the controlling class at the moment. You place more power in the hands of this oligarchy and the working class will be seriously disadvantaged.
The local oligarchs are hungry for land. Almost every conceivable piece of state land that is in a prime location has either been gobbled up or is being eyed. The local oligarchy is spreading its wings and buying up property in Guyana.
GuySuCo will be their prized possession. If they get it, and they will if it is placed on the auction block, then they will have their fill.
It took the PPP, a former communist party, to bring capitalism to Guyana. If the PNCR wins the election and sells GuySuCo, then it would have moved from a party which brought socialism to Guyana and prided itself in owning the commanding heights of the economy, to a party that would have effectively allowed Guyana to fall into private hands.