Category: Letters to the editor

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Nandalall should direct his advice to Jagdeo, not Kissoon

In a letter appearing in Sunday Kaieteur News July 31 and captioned “Mr. Kissoon is treading on dangerous waters”, Mr. Anil Nandlall, signing as “MP and Attorney-at-Law for His Excellency, President Bharrat Jagdeo”, seeks to offer advice to Mr. Kissoon and threatens contempt of court proceedings over comments made by Mr. Kissoon in his Kaieteur News column.

Mr. Nandlall knows that Mr. Kissoon is represented in the relevant matter by two Attorneys-at-law, with a third soon to be added. As one of those attorneys I would respectfully suggest to Mr. Nandlall that he should spare himself and our client such gratuitous advice and instead direct it to his client, the President, who makes a habit of commenting, like Sir Oracle, on matters that are sub judice.

I wonder if Mr. Nandlall, as a regular attorney-at-law for the President, has cautioned his client of the impropriety of such interventions. If he has, it would be helpful to readers if Mr. Nandlall would comment on an article appearing in Stabroek News of July 30, in which the President makes loaded references to criminal charges against a person involved in a matter in which the President as Minister of Information is currently adjudicating.

Guyanese are aware of the numerous occasions on which Mr. Nandlall’s client has shown contempt for our courts as well as our constitution. His client now demonstrates in the complaint against CNS 6 unmistakable bias and rank abuse of Presidential power, a combination so egregious as to make any comment by Mr. Kissoon pale in comparison.

Finally while Mr. Nandlall seems unable to refer to Mr. Jagdeo without the title His Excellency, I would like to remind him that his instructions were to bring the action against Mr. Kissoon in the name Bharrat Jagdeo, which he did.

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SN letter did not contain any figure for the cost of the Enmore packaging plant

Mr M Maxwell is normally very careful with the underlying facts and assumptions in his letters and for that reason they are always worth reading. I am therefore surprised that in his letter to the editor in the Stabroek News of May 28, (‘Enmore’s packaging plant produces less than that of Kenya and costs more’) he would carelessly claim that “I provided an overall figure of US$12.5 million for the cost of only the Enmore packaging plant itself.”

I would appreciate if Mr Maxwell could indicate where in my letter in the Stabroek News of May 17, I made any such statement. Perhaps he is confusing the letter with a report carried in the Kaieteur News in which the journalist used some of the information contained in my Stabroek News letter. But clearly it could not be with respect to the price tag since that was not in my letter to the Stabroek News.

Mr Maxwell might recall that it was the Minister of Agriculture Mr Robert Persaud who following a January 2010 visit to the Enmore plant then under construction told the press that that government was investing $2.4 billion – roughly US$12 million – in the packaging plant.

This is not intended to be a criticism of Mr Maxwell since it is human to err.

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Acceptance of invitation from Agriculture Ministry and GuySuCo

I note in an article (Kaieteur News, Wednesday May 25, 2011) captioned “GuySuCo details US$12.5 expenditure on packaging plant”, statements emanating from Mr. Robert Persaud MBA, Minister of Agriculture and the Guyana Sugar Corporation. Both parties were reacting to a Kaieteur News article of the previous day, in which the newspaper raised questions about the cost of the plant.

I am sure that both the Minister and the Corporation are aware that my contribution to the discussion on the GuySuCo packaging plant was by way of a letter in the SN, of May 17, 2011.

In that letter I corrected President Jagdeo’s exaggerated pronouncement of sugar’s contribution to the GDP as 16% instead of approximately 6%. The focus of my letter was to caution that the packaging plant, welcome though it is, could not be a silver bullet for the serious financial problems of the Corporation.

In that connection I drew attention to the wave of packaging plants taking place across the world and specifically referred to a 300,000 tonnes capacity Plant by Mumias Sugar Company (MSC) with a daily capacity of 700 tonnes and a price tag of US$3M.

I challenge both GuySuCo and the Minister of Agriculture to show either in my letter or anywhere else where I referred to or questioned the cost of the Enmore Packaging Plant.

I note that Mr. Robert Persaud has challenged Kaieteur News and me “to conduct a forensic audit of GuySuCo and the Packaging Plant.” I herby accept this challenge to undertake a professional audit, the cost of which will be borne by Kaieteur News.

I hope this is not just bluff on Mr. Persaud’s part and that he has both the authority and the courage to carry through with his challenge. I now await word from him.

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A packaging plant will not be a magic bullet to salvage Jagdeo’s sugar decision

In making his case for an increased financial contribution to the state-owned Guyana Sugar Corporation President Jagdeo is quoted as saying that “government’s commitment to sugar has nothing to do with the workers being ‘a party support base,’ but rather with the development of the sector which contributes some 16 per cent of the country’s Gross Domestic Product.” One is never sure whether the President’s loose use of facts and data is politically driven or is evidence of his unfamiliarity with up-to-date national income statistics. In normal circumstances, he can be dismissed but not when, as in the case of the building of the packaging plant, what he mistakenly thinks forms the basis of major spending decisions.

This is what the most recent official figures published by the government show in relation to sugar’s contribution to the economy measured by GDP:

It is perhaps not without some significance but with considerable irony that GuySuCo Director Keith Burrowes used the occasion to announce his assessment of Mr Jagdeo as Guyana’s best president ever, which obviously includes Cheddi Jagan who waged a life-long struggle for sugar workers. Mr Jagdeo of course, led GuySuCo into the inadequately conceived and poorly executed US$200 million Skeldon modernization project which drove the corporation to the brink of insolvency from which its survival requires a combination of:

1. sales of a depleting quantity of sugar lands. Before a substantial sale of lands at Diamond in 2009, only 28% of the lands used to derive economic benefits to the corporation were actually owned by it;

2. the indefinite continuation of subsidised peppercorn rent of G$1,000 per acre per year;

3. the assumption/payment by the government of the corporation’s debts; and

4. various other forms of subsidy including the deferral of taxes of $2.3 billion over a five-year period without penalties.

Director Donald Ramotar has sought to distance himself and fellow directors including Mr Burrowes and Ms Gita Singh-Knight from responsibility for the plight of the corporation. This is not only legally flawed, it is also totally unfair. The political and corporate directorate has practically imposed on the management not only an unbearable debt burden, but some $1,900 million of capitalised interest at December 2009. This is a huge non-productive cost to bear and the executive management deserves the nation’s sympathy.

The problem for the corporation and for the country as a whole which Mr David Granger’s “privatization” comment did not reflect is that in its present form and with its existing liabilities it would be impossible to find a buyer for GuySuCo. A buyer would almost certainly insist on an asset purchase in which the cost of the Skeldon factory would have to be heavily discounted. That would leave the country to meet the lion’s share of tens of billions of liabilities at December 31, 2009, the last year for which the corporation’s financial statements are available.

While Mr Jagdeo will soon be enjoying a gigantic retirement package which he signed into law and under which he pays no taxes, the debts he continues to amass for the corporation and the country will have to be paid by the workers in sugar and other sectors and the taxpayers and consumers of this country. Mr Burrowes may have cause to rejoice and exult, but not those groups.

The packaging plant will certainly add value but will not be a magic bullet to salvage Jagdeo’s and the board’s stand-out sugar decision. Packaging plants are the wave of the sugar industry as several countries in Africa, Australia and here in South America expand into sugar packaging in a bid to remain competitive. Kenya’s largest sugar miller, Mumias Sugar Company (MSC) recently built, at a cost of US$3 million, a new eleven-machine, state-of-the-art packaging plant with a daily capacity of 700t, enabling the company’s packaging production capacity to increase to 300,000t per annum. Incidentally, the packaging machines for MSC were supplied by Brazilian companies Brazafric and Raumak while we trekked to India to source our plant!

With the continuing trend towards more and sophisticated packaging by the industry internationally, GuySuCo’s only hope of survival without further and more costly and unaffordable state support is to drastically cut its cost of production in line with the rest of the world. That imperative was conveniently ignored at the launch of the packaging plant.

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In discussing Vaitarna, Messrs Persaud and Singh failed to distinguish the State Forest Exploratory Permit from the TSA

When Agriculture Minister Mr. Robert Persaud held his press conference on April 12, 2011 to defend the permit/agreement over 1.82 million acres granted to the Indian company Vaitarna Holdings Private Inc., there had been very few letters and questions about the manner in which the two parcels of the land had been allocated to the company owned by Mr. Siddhartha, the coffee magnate of India. Mr. Persaud’s accusation of a “misinformation” and “sleazeball” campaign seemed therefore both inappropriate and disproportionate particularly since Mr. James Singh, Commissioner of Forests had spoken two days earlier on the matter.

In seeking to dispel concerns about Vaitarna, Mr. Singh had raised in my mind some interesting questions which I had hoped to put to him in some form. I withheld those after the Minister had said that he was “ready to debate and discuss the sector’s management stewardship, the policies and whatever is being done within the GFC, at anytime, at any place and with anyone.” It is now close to two weeks since I invited Mr. Persaud to do exactly that on Plain Talk but he has not responded to my written invitation or taken my follow-up telephone calls.

In my view, both Mr. Singh and Mr. Persaud failed to distinguish between the State Forest Exploratory Permit (SFEP), like the one previously granted to Simon and Shock International Logging Inc. (SSI) and the Timber Sales Agreement (TSA) previously granted to Caribbean Resources Limited (CRL). SFEPs and TSAs are issued and revoked under different sections and authority under the 1953 Forest Act.

SFEPs do not confer exclusive rights while TSAs do. SFEP’s are issued by the GFC under the authorisation of the Minister but only if the GFC is satisfied that the applicant, which must be a Guyana incorporated company, has adequate experience to carry on effective exploratory operations. Where there is a breach, the GFC can suspend the permit, subject to review by the President. A TSA on the other hand, permits the sale of produce and is issued by or under the authority of the President. In the case of a non-fulfilment of any of its terms, the TSA may be suspended by the Minister, also subject to review by the President.

It would be interesting to learn of any precedent of a new entrant in the sector being granted almost simultaneously an SFEP and a TSA. The intent of the Forest Act seems clear – an entity must demonstrate its capacity to deliver under an SFEP before being entitled to a TSA. Neither the Minister nor the Commissioner offered any indication that would remotely suggest that Vaitarna has demonstrated any capacity other than a keenness to get control of pristine forests covering 5% of Guyana’s forests. Instead, there is a lot to suggest that the decision was based not on any objective technical criteria but on Vaitarna’s willingness to pay $600 million, an indeterminate portion of which was for debts of CRL, a CLICO subsidiary. With such an outlay, Mr. Siddhartha, a shrewd businessman in India’s competitive and notoriously corrupt business environment will expect to recover his investment at or above his company’s cut-off rate of return, which will only come from fairly intensive operations.

With regard to the actual sums collected, both the US$254,000 and the $600 million should have been paid into the GFC from which, subject to the Act, surpluses could be paid into the Consolidated Fund. Both Mr. Singh and the Minister confirmed that the lesser amount was paid to the GFC but were ambivalent with respect to the $600 million. From a review of the Commission’s records it appears that the $600 million was paid straight into the CLICO fund, in a liquidation process that defies many laws but which the public is silent about for reasons of convenience.

It is interesting to note that the President has not assented to the new Forests Act passed in the National Assembly in February 2009, as a consequence of which it is impossible for the new Guyana Forestry Commission Act 2007 to come into operation, making the Commission more independent and autonomous. It is regrettable that even as we enter into international agreements for the conservation of our forests, we seem determined to retain legislation that is sixty years old rather than operationalise modern legislation that eliminates policy confusion, emphasises sustainable management of the forests, grants the regulator more autonomy and gives the public access to information.

If these recent Acts had been in place, it would have been harder for the Government to enter into the kind of transactions it has with Vaitarna and easier for the public to access information. This failure may have nothing to do with Vaitarna. But it may be hard to convince any informed person otherwise.