Georgetown : Measures will be taken to support the sugar industry, which according to Finance Minister, Dr Ashni Singh, has been plagued with problems. He made this revelation even as he presented this year’s budget earlier today. Dr Singh, during his presentation announced a $6B transfer from Central Government which the opposition immediately condemned as a bail out for the Guyana Sugar Corporation.
Dr Singh, as he addressed the National Assembly which was televised live on the State owned television station and radio, noted that “much is known and has already been said about both the importance of the sugar industry to national life, and about the challenges being confronted by the industry.”
He warned that the Government will spare no effort to ensure that the sugar industry is transformed to a viable and competitive one and to that end announced that while significant resources have already been injected by Government into the industry to enable it to recapitalise, and expand into value added products, $4B more will be provided this year.
He said that this subsidy is “in order to ensure that the sugar industry is financially able to meet its operating and investment requirements.”
The Finance Minister told the nation that the local sugar industry has the potential to reach some 400,000 tonnes of cane in the medium term.
He did say that production for 2011 did grow by 7.1 per cent to some 236,506 tonnes in 2011. He did point out that while the first crop production of 106,871 tonnes was 30.5 per cent above the corresponding performance in 2010, the second crop contracted by 6.7 per cent to 129,635 tonnes reflecting unhelpful weather and industrial relations conditions.
He did say that output in the sugar industry continues to lag the production trajectory anticipated by the industry's long term business plans, and industry finances are being adversely affected.
The next recipient of a large bailout/subsidy is that of the Guyana and Power and Light Company.
The Finance Minister told the House that electricity tariffs were last adjusted in December 2007, at a time when heavy and light fuel oils were relatively cheaper that the current and projected prices.
He said that during the trying times as it relates to oil purchases GPL had to fund the escalated costs without any adjustment to their tariffs.
“Recognising the importance of cushioning as far as possible the impact of imported oil price movements on domestic consumers, Budget 2012 includes a transfer of $6B from the Central Government to GPL.”
Even as he announced what would be more than welcome news for the Power company, the fate of Lindeners will be much different. According to Dr Singh since the privatisation of the bauxite operations in Linden and the Berbice River, Government has been subsidising electricity rates in these communities.
“Currently, in Linden, electricity costs between $5 and $15 per kWh, while on the GPL grid customers pay an average of $64 per kWh.”
He said that the total cost of this electricity subsidy was $2.9B last year, the equivalent of 10 per cent of GPL's total revenues.
As such the finance Minister announced that starting from “2012, reforms will be initiated to the tariff subsidy with the aim of giving effect to a progressive alignment of the subsidised rates with the national rates that are applicable on the GPL grid.”
This means that the electricity bill that Lindeners have been accustomed to paying for several years now will dramatically skyrocket and has already drawn an angry reaction from members in the opposition circles.
The Minister did announce several large sums for a range of projects that are being undertaken all of which were initiated by former President Bharrat Jagdeo with no new project linked directly to Head of State Donald Ramotar.
One such project is the now controversial One Lap Top Per Family (OLPF) Program which will see another $3.7B being pumped into the project initiated by Jagdeo and according to Dr Singh the remaining computers will be distributed this year bringing the total to some 90,000.
In the much touted and shrouded in mystery Information Communication and Technology (ICT) spearheaded by Jagdeo and for which several billion dollars have already been extended the Minister said that another 3.1B will be spent.
“Government has been following the twin tracks of installing infrastructure that will see high speed delivery of e-Governrnent content along with ensuring that no household will be left without access to that content,” said Dr Singh
He continued saying that to these ends, “amounts totalling $2.6B were allocated to install some 580 kilometres of high speed fibre optic network spanning from Lethem to Providence with drop-off sites at Lethem, Annai, Kurupukari, Mabura and Linden, and commencing a high speed fibre optic backhaul network connecting Moleson Creek to Anna Regina, with a data centre at Providence for the development of e-Government with high speed wireless access using a 4G network.”
A total of $3.1B is budgeted to be spent in 2012 for the continuation of these networks.
