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Privatisation Of Sugar Factories Yields $1 Billion

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Minister of Agriculture and Fisheries, Hon. Roger Clarke, has informed that the Government has so far realised a total of $1.0304 billion from the privatisation of government owned sugar factories.

Speaking  in the House of Representatives, today (February 14),  Mr. Clarke said the  St. Thomas Sugar Estate was sold for $67.067 million ($42.5 million for the factory and $24.56 million in lease payments).

He also informed that the Trelawny Sugar Estate was sold for $127.5 million and this represents the proceeds from the sale of the factory, as lease payments have been deferred until July 2012.

The Frome, Monymusk and Bernard Lodge sugar factories were sold for $835.9 million, including  $765 million for the factories and $70.9 million in lease payments.

“In the interest of transparency, I am constrained to inform that these receipts were against valuations of $14.844 billion and the Government will have to absorb the Sugar Company of Jamaica’s total debt of $35.03 billion, as at January 31, 2012,” Mr. Clarke said.

The Minister further told the House that over $43 million was paid to Mr. Aubyn Hill for compensation for his services during the privatisation process.

“Compensation for Mr. Hill for privatisation payments in round three was $18.18 million. In addition some $28.25 million was paid by the Ministry for round two,” Mr. Clarke said.

Meanwhile, Mr. Clarke informed that the privatisation of the sugar factories is already showing encouraging results.

“Since the divestment of the St. Thomas Sugar Estates to Golden Grove Sugar Company Limited in 2009, cane production has increased by 10.85 per cent from 163 tonnes to 181,000 tonnes. Sugar production has increased by 28.1 per cent from 12,587 tonnes to 16,123 tonnes since the divestment to Golden Grove Sugar Company,” the Minister stated.

“Although there was an unfortunate mishap that caused the factory (Trelawny Sugar Estate) to be closed for rehabilitation in the 2010/11 crop, I am happy to report that the new owners have spent significant funds and the factory will re-open for this crop. This will stimulate expansion of cane production by farmers in the area,” he added.

 Mr. Clarke  said that having handed over the factories to COMPLANT (from China) in August, 2011,  he was satisfied with the level of investment by Pan Caribbean in Frome, Monymusk and Bernard Lodge Sugar Estates.

He informed that Pan Caribbean has procured over 50 pieces of equipment for use on the Estates they have acquired and they have committed themselves to putting up a new factory at Monymusk by 2016.

“The total investment contemplated by Pan Caribbean Sugar is about $1.1 billion,” Mr. Clarke said.

In the meantime, in the financial year 2012/13, the Government will spend over $1 billion in relocating residents of the sugar barracks, upgrading sporting facilities and executing critical small community infrastructure projects.

Additionally, in order to ensure that cane farmers continue to maintain a stake in the sugar sector, the government will increase the capital of the cane expansion fund to $1.7 billion, fast track rehabilitation of critical cane roads and establish a number of Agro-Parks in sugar dependent areas.

“I am constrained to point out that the expenditure on these projects in the next financial year is contingent on the government finalising an agreement with the International Monetary Fund,” Mr. Clarke said.

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