One International Firm Among Bidders
GEORGETOWN, Guyana – The move to privatise some of the sugar estates in Guyana gained momentum after several bids were received and opened after the bidding closed on Thursday.
The consultants hired to oversee the privatisation of the Enmore, Skeldon and Rose Hall estates, PricewaterhouseCoopers (PwC) said 10 envelopes had been publicly opened.
PwC managing director, Wilfred Baghaloo said that evaluation of the bids will seek to ensure they comply with the evaluation criteria set out in the Information Memorandums (IM).
According to the Stabroek News, the lower than expected number has been attributed to uncertainty over the functionality of the estates and concerns about competition from the state-owned GuySuCo.
“The major concerns of potential bidders related to regulations that are needed to ensure fair competition [with] government, that is, the legacy, GuySuCo,” Baghaloo was reported as telling reporters at a press conference on Thursday.
“Part of the concern was that lot of people were worried—‘What are we really buying? Are we buying scrap metal or going concerns?’ There was also concern about the regulatory environment…‘How do we compete with government?’” he added.
PwC was hired by the Special Purpose Unit (SPU) under the National Industrial and Commercial Investments Limited (NICIL) to oversee the process. The SPU is tasked with divesting the assets of the cash-strapped Guyana Sugar Corporation (GUYSUCO).
“We expect from them a development plan and they need to tell us that development plan and how fast they will implement it,” Baghaloo said regarding the bids.
He said that the primary objective of the privatisation of the three sugar estates is to ensure they are operated by qualified, experienced, and well-structured companies.
However, he noted that the prospective company is mandated to keep the lands in the cane industry. “Not necessarily the sugar industry. We can use the cane for many things … That’s for the bidders to decide what they want to do,” Baghaloo noted.
PwC was hired in March of this year and began extensive advertising of the estates in July. Bids for the three estates were advertised in Jamaica, Barbados, Belize, Guyana, international sugar journals and PwC’s international network among other avenues.
A total of 12 IMs was sold during the marketing process at the cost of US$1,000. A pre-bid meeting was held with potential investors in September. Bidders raised concerns relating to regulations needed to ensure fair competition, the functionality of the factories and access to markets served by GUYSUCO, Baghaloo said.
He said that while at the close of the bids 10 envelopes were opened, however, this does not necessarily mean that there were 10 bidders.
He noted the government is not bound to accept any of the bids and the process can be reopened. “We’re pleased with the level of response that we’ve received,” he said, but was not prepared to disclose who the bidders were indicating that there was one international bidder.
PwC will take maximum 30 days to evaluate the bids after which it will make recommendations to the SPU’s Steering Committee and NICIL who will then make the necessary recommendations to Cabinet.
The government moved to downsize the sugar industry to make GUYSUCO more efficient. The downsizing saw the amalgamation of some estates and factories and the divestment of others.
The end result saw GUYSUCO consisting of three estates and sugar factories. The estates, complete with factories, are Blairmount in the West Bank Berbice, Albion-Rose Hall in East Berbice and the Uitvlugt-Wales estate in West Demerara.
The exercise also led to several sugar workers being retrenched.
A government statement said that it is hoped that several of the sugar workers would gain employment in the new privatised estates. – CMC