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MINISTRY PAPER 20/1 2.. 1.0 Purpose To inform Parliament about the outcome of the divestment of the Government-owned Sugar Estates and in particular, details related to the debts, expenses and proceeds related to the said divestment exercise. The essential feature of the fJIst objective of the Strategy entailed the transformation of the sugar industry to a sugar cane industry based on the production of multiple products, such as sugar, molasses, rum, ethanol and cogeneration. It 1
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MINISTRY PAPER 201 2
REPORT ON THE SUGAR DIVESTMENT EXERCISE OF THE GOVERNMENT OF JAMAICA
10 Purpose To inform Parliament about the outcome of the divestment of the Government-owned Sugar Estates and in particular details related to the debts expenses and proceeds related to the said divestment exercise
20 Background In 2003 Brazil Thailand and Australia submitted a complaint to the World Trade Organization (WTO) that challenged the legality of subsidies applied to European Community sugar Arising from the WTOs ruling in favour of the three countries the European Union agreed to a programme of reform to its sugar regime which was expected to reduce the price paid for sugar exported by ACP countries by a total of 3600 by the year 2009
Following a number of studies and a wide stakeholder consultation process in 2005 the Government developed The Jamaica Country Strategy for the Adaptation of the Sugar Industry 2006-2015 in order to deal with the impact of the reform The strategic objectives were to
bull Develop a Sustainable Private Sector-Led Sugar Cane Industry
bull Strengthen the Economic Diversification Social Resilience and Environmental Sustainability of SugarshyDependent Areas and
bull Maintain Progress toward Macro-Economic Goals
The essential feature of the fJIst objective of the Strategy entailed the transformation of the sugar industry to a sugar cane industry based on the production of multiple products such as sugar molasses rum ethanol and cogeneration It
1
was proposed that this transfonnation be driven essentially by private investment In this regard the Government took the decision to divest its sugar assets
30 The Divestment Process Consistent with its Sugar Adaptation Strategy the Government commenced the divestment of the five (5) Government owned sugar factories and estate lands in November 2005 The Sugar Divestment Exercise was completed in August 2011 after three (3) rounds as follows
bull Round (1) On 27 June 2008 following upon negotiations with the sole bidder InfInity Bio-Energy a Heads of Agreement was signed with the expectation that GOJ would hand over the sugar assets in October 2008 Mter extending the period for completion of the deal with Infinity Bio-Energy twice it emerged that the impact of the global financial crisis would prevent the company from closing the sugar divestment deal
bull Round (2) In June 2009 two agreements for Sale and Purchase of the assets of two (2) public sector estates St Thomas Sugar and Trelawny Sugar estates were finalized
The assets of St Thomas Sugar estate were sold to a consortium of Fred M Jones Estates Limited and Seprod Limited operating as Golden Grove Sugar Company Limited with possession on July 16 2009 The factory lands (105 Hectares) and the assets were purchased at a price of US$500000 while the sugar lands were leased for a period of fifty (50) years renewable for another twenty-five years at US$5300 per hectare per annum with provision for an annual increase of 4
The assets of Trelawny Sugar estate including the Hampden Distillery and Great Houses and the factory lands (338 hectares) were sold for a total of US$15 million to Everglades Farms Limited with possession on July 20 2009 The sugar lands were leased on the same
2
conditions as for St Thomas Sugar except that the annual lease is US$4000 per hectare
bull Round (3) On 30th July 2010 the agreements which initiated the divestment of the three remaining GOJ estates namely Frome Monymusk and Bernard Lodge to COMPLANT International Sugar Industry Company were signed The divestment agreement between GOJ and COMPLANT provided for the payment of US$9M for the factories and factory lands at Frome Monymusk and Bernard Lodge and US$35hayr to lease an estimated 30000 Hectares of land
40 Accumulated Debts of the Government-Owned Sugar Estates As at 31st January 2012 the total debt assumed by the Government of Jamaica for liabilities of Sugar Company of Jamaica Limited St Thomas Sugar Company Limited and Trelawny Sugar Company Limited (Hampden Long Pond) was J$3S58B
The debts in question were accumulated since 1999 when the Government of Jamaica assumed responsibility for Frome Monymusk and Bernard Lodge estates consequent on the failure of the previous sugar divestment to Wray amp Nephew Manufacturers Merchant Bank and Booker Tate Group in 1994 Subsequently the Government of Jamaica assumed responsibility for the operations of Tropicana Sugar Company in 2000 and Trelawny Sugar Company (HampdenLong Pond) in 2002
The nature of the debts assumed by the Government is as follows
(a) Subsequent settlement of outstanding liabilities for the three entities which existed at the at the time when they were taken over shyJ$44B
3
(b) Providing working capital and operational support to keep these entities going through various guarantees which the Government of Jamaica subsequently assumed These funding arrangements included loans from DBJ Petro-Caribe Fund NCB amp BNS shyJ$275B
(c) Assumption by the Government andor write off of statutory obligations due to the Government - J$31B
(d) HEART and property tax liabilities - J$058B
The $3558B referred to above relate to debts of the GOJ Sugar Estates all of which were incurred prior the sale of St Thomas Sugar and Trelawny Sugar Company in July 2009 and the takeover of the operations of Frome Monymusk and Bernard Lodge by the Sugar Company ofJamaica Holdings Limited (Sugar Divestment enterprise) in August 2009
50 Divestment-Related Expenses The expenditure incurred by the Government to support sugar divestment-related activities was as follows
a Notice pay and Severance to redundant sugar workers J$250B
b Compensation to Mr Aubyn Hill for privatisation services in Round 3 J$ 1618081250 (US$19036250) In addition some J$2825587801 was paid by the Ministry of Agriculture and Fisheries for Round 2
b Legal Fees J$10611972800 c Titling-related J$1461 7 28600 d Transfers to SCJ Holdings for operations
J$68330801150 e Sundry J$20999708600
4
f Total J$356B
60 Operational Expenses of SCJ Holdings Limited Prior to Divestment In addition to the assumed debt of J$3558B and the privatisation expenses of J$356B the Government of Jamaica provided some $328B to SCJH for the operations of Frome Monymusk and Bernard Lodge between 2009 and August 2011 when these Estates were handed over to new owners These included transfers from the Sugar Transformation Unit and the proceeds from privatisation as well as J$992M in loans from the PetroCaribe Fund The funds from PetroCaribe will be repaid from the anticipated lease payments from the sugar lands for 12 years Some J$6650M of the transfers to SCJH covered social services such as water electricity operations of Estate schools and clinics
70 Proceeds of the Divestment The Government has so far realized a total of J$I03046691000 (US $1212314012) from the sugar divestment process This includes
bull St Thomas Sugar Estate Total J$6706576670 (US $78900902) This includes J$4250000000 (US $50000000) for the factory and J$2456576670 (US $28900902) in lease payments
bull Trelawny Sugar Estate Total J$12750000000 (US $1 50000000) This J$12750000000 represents the proceeds from the sale of the factory as lease payments have been deferred until July 2012
bull Frome lonymusk and Bernard Lodge Total J$83590114350 (US $983413110) This includes J$76500000000 (US $900000000) for the factory and J$7090114350 (US $834 13110) in lease payments
5
8 Post-Divestment Operations The total expenditure so far by the new owners of the five (5) former GOJ Sugar Estates is estimated at J$107B The breakout of this amount is as follows
- Golden Grove Sugar Company - J$16B - Everglades Farms Limited - J$28B - Pan -Caribbean Sugar Company - J$63B
In respect of lands planted to sugar cane by the new owners the figures are as follows
- Golden Grove Sugar Company- 284 Hectares - Everglades Farms Limited - 426 Hectares and - Pan-Caribbean Sugar Company - 949 Hectares
The following are the current numbers of full-time and seasonal employees of the former GOJ Sugar Estates
- Golden Grove Sugar Company - 580 persons - Everglades Farms Limited -783 persons - Pan-Caribbean Sugar Company - 1850 persons
The Sugar Privatisation Exercise is showing encouraging results given the to-date performance of the divested Estates
Golden Grove St Thomas Since divestment of St Thomas Sugar Estate to Golden Grove Sugar Company Limited in 2009 cane production has increased by 1085 percent from 163000 tonnes to 181000 tonnes Sugar production has increased by 281 percent from 12587 tonnes to 16123 tonnes
Everglades Although there was an unfortunate mishap that caused the factory to be closed for rehabilitation in the 2010 11 crop 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 that area
6
COMPLANT
Having handed over the factories to COMPLANT in August 2011 the Government is satisfied with the level of investment by their operating subsidiary Pan-Caribbean Sugar Company in Frome Monymusk and Bernard Lodge Sugar Estates PanshyCaribbean has procured over fifty (50) pieces of new equipment for use on the Estates 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 J$109B (US $1270M)
Cane Farmers Having seen the level of investments in field and factory by the new owners of the divested estates cane farmers have planted and replanted close to 2000 hectares of cane using concessionary loans from the Cane Expansion Fund To date J$8580M has been injected by the Ministry into the Fund
90 An Enabling Policy Environment tor the Sugar Cane Sector Although the Government is no longer participating in the commercial operations of the industry it continues to play an important role in policy and regulation Pan-Caribbean Sugar for instance has requested a license from the Sugar Industry Authority (SIA) to market their own sugar in accordance with the Sugar Industry Control Act and the terms of their Sale and Purchase Agreement This is being facilitated The Government of Jamaica will continue in the new dispensation to insist on the adherence by all manufacturers to the Cane Payment System which guarantees transparency and provides confidence to farmers that they are getting their fair share of proceeds
This Government accepts the fmdings of the Wint Commission in respect of the restructuring of the institutional and regulatory framework and the Cane Payment System to take into account our new realities The Government of Jamaica will not abandon its social responsibilities to the many workers and farmers displaced in the privatization process
7
In this regard in the fmancial year 20122013 the Government of Jamaica with support from the European Unions Accompanying Measures for Sugar Programme will spend over J$10B in relocating residents of the Sugar Barracks upgrading sporting facilities and the execution of critical small community infrastructur~ projects Additionally in order to ensure that our cane farmers continue to maintain a stake in the sugar sector the Government of Jamaica will increase the capital of the Cane Expansion Fund to J$17B fast track rehabilitation of critical cane roads and establish a number of~ugar Dependent Areas
~~l Honourable Roger Clarke Minister of Agriculture and Fisheries March 5 2012
8
was proposed that this transfonnation be driven essentially by private investment In this regard the Government took the decision to divest its sugar assets
30 The Divestment Process Consistent with its Sugar Adaptation Strategy the Government commenced the divestment of the five (5) Government owned sugar factories and estate lands in November 2005 The Sugar Divestment Exercise was completed in August 2011 after three (3) rounds as follows
bull Round (1) On 27 June 2008 following upon negotiations with the sole bidder InfInity Bio-Energy a Heads of Agreement was signed with the expectation that GOJ would hand over the sugar assets in October 2008 Mter extending the period for completion of the deal with Infinity Bio-Energy twice it emerged that the impact of the global financial crisis would prevent the company from closing the sugar divestment deal
bull Round (2) In June 2009 two agreements for Sale and Purchase of the assets of two (2) public sector estates St Thomas Sugar and Trelawny Sugar estates were finalized
The assets of St Thomas Sugar estate were sold to a consortium of Fred M Jones Estates Limited and Seprod Limited operating as Golden Grove Sugar Company Limited with possession on July 16 2009 The factory lands (105 Hectares) and the assets were purchased at a price of US$500000 while the sugar lands were leased for a period of fifty (50) years renewable for another twenty-five years at US$5300 per hectare per annum with provision for an annual increase of 4
The assets of Trelawny Sugar estate including the Hampden Distillery and Great Houses and the factory lands (338 hectares) were sold for a total of US$15 million to Everglades Farms Limited with possession on July 20 2009 The sugar lands were leased on the same
2
conditions as for St Thomas Sugar except that the annual lease is US$4000 per hectare
bull Round (3) On 30th July 2010 the agreements which initiated the divestment of the three remaining GOJ estates namely Frome Monymusk and Bernard Lodge to COMPLANT International Sugar Industry Company were signed The divestment agreement between GOJ and COMPLANT provided for the payment of US$9M for the factories and factory lands at Frome Monymusk and Bernard Lodge and US$35hayr to lease an estimated 30000 Hectares of land
40 Accumulated Debts of the Government-Owned Sugar Estates As at 31st January 2012 the total debt assumed by the Government of Jamaica for liabilities of Sugar Company of Jamaica Limited St Thomas Sugar Company Limited and Trelawny Sugar Company Limited (Hampden Long Pond) was J$3S58B
The debts in question were accumulated since 1999 when the Government of Jamaica assumed responsibility for Frome Monymusk and Bernard Lodge estates consequent on the failure of the previous sugar divestment to Wray amp Nephew Manufacturers Merchant Bank and Booker Tate Group in 1994 Subsequently the Government of Jamaica assumed responsibility for the operations of Tropicana Sugar Company in 2000 and Trelawny Sugar Company (HampdenLong Pond) in 2002
The nature of the debts assumed by the Government is as follows
(a) Subsequent settlement of outstanding liabilities for the three entities which existed at the at the time when they were taken over shyJ$44B
3
(b) Providing working capital and operational support to keep these entities going through various guarantees which the Government of Jamaica subsequently assumed These funding arrangements included loans from DBJ Petro-Caribe Fund NCB amp BNS shyJ$275B
(c) Assumption by the Government andor write off of statutory obligations due to the Government - J$31B
(d) HEART and property tax liabilities - J$058B
The $3558B referred to above relate to debts of the GOJ Sugar Estates all of which were incurred prior the sale of St Thomas Sugar and Trelawny Sugar Company in July 2009 and the takeover of the operations of Frome Monymusk and Bernard Lodge by the Sugar Company ofJamaica Holdings Limited (Sugar Divestment enterprise) in August 2009
50 Divestment-Related Expenses The expenditure incurred by the Government to support sugar divestment-related activities was as follows
a Notice pay and Severance to redundant sugar workers J$250B
b Compensation to Mr Aubyn Hill for privatisation services in Round 3 J$ 1618081250 (US$19036250) In addition some J$2825587801 was paid by the Ministry of Agriculture and Fisheries for Round 2
b Legal Fees J$10611972800 c Titling-related J$1461 7 28600 d Transfers to SCJ Holdings for operations
J$68330801150 e Sundry J$20999708600
4
f Total J$356B
60 Operational Expenses of SCJ Holdings Limited Prior to Divestment In addition to the assumed debt of J$3558B and the privatisation expenses of J$356B the Government of Jamaica provided some $328B to SCJH for the operations of Frome Monymusk and Bernard Lodge between 2009 and August 2011 when these Estates were handed over to new owners These included transfers from the Sugar Transformation Unit and the proceeds from privatisation as well as J$992M in loans from the PetroCaribe Fund The funds from PetroCaribe will be repaid from the anticipated lease payments from the sugar lands for 12 years Some J$6650M of the transfers to SCJH covered social services such as water electricity operations of Estate schools and clinics
70 Proceeds of the Divestment The Government has so far realized a total of J$I03046691000 (US $1212314012) from the sugar divestment process This includes
bull St Thomas Sugar Estate Total J$6706576670 (US $78900902) This includes J$4250000000 (US $50000000) for the factory and J$2456576670 (US $28900902) in lease payments
bull Trelawny Sugar Estate Total J$12750000000 (US $1 50000000) This J$12750000000 represents the proceeds from the sale of the factory as lease payments have been deferred until July 2012
bull Frome lonymusk and Bernard Lodge Total J$83590114350 (US $983413110) This includes J$76500000000 (US $900000000) for the factory and J$7090114350 (US $834 13110) in lease payments
5
8 Post-Divestment Operations The total expenditure so far by the new owners of the five (5) former GOJ Sugar Estates is estimated at J$107B The breakout of this amount is as follows
- Golden Grove Sugar Company - J$16B - Everglades Farms Limited - J$28B - Pan -Caribbean Sugar Company - J$63B
In respect of lands planted to sugar cane by the new owners the figures are as follows
- Golden Grove Sugar Company- 284 Hectares - Everglades Farms Limited - 426 Hectares and - Pan-Caribbean Sugar Company - 949 Hectares
The following are the current numbers of full-time and seasonal employees of the former GOJ Sugar Estates
- Golden Grove Sugar Company - 580 persons - Everglades Farms Limited -783 persons - Pan-Caribbean Sugar Company - 1850 persons
The Sugar Privatisation Exercise is showing encouraging results given the to-date performance of the divested Estates
Golden Grove St Thomas Since divestment of St Thomas Sugar Estate to Golden Grove Sugar Company Limited in 2009 cane production has increased by 1085 percent from 163000 tonnes to 181000 tonnes Sugar production has increased by 281 percent from 12587 tonnes to 16123 tonnes
Everglades Although there was an unfortunate mishap that caused the factory to be closed for rehabilitation in the 2010 11 crop 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 that area
6
COMPLANT
Having handed over the factories to COMPLANT in August 2011 the Government is satisfied with the level of investment by their operating subsidiary Pan-Caribbean Sugar Company in Frome Monymusk and Bernard Lodge Sugar Estates PanshyCaribbean has procured over fifty (50) pieces of new equipment for use on the Estates 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 J$109B (US $1270M)
Cane Farmers Having seen the level of investments in field and factory by the new owners of the divested estates cane farmers have planted and replanted close to 2000 hectares of cane using concessionary loans from the Cane Expansion Fund To date J$8580M has been injected by the Ministry into the Fund
90 An Enabling Policy Environment tor the Sugar Cane Sector Although the Government is no longer participating in the commercial operations of the industry it continues to play an important role in policy and regulation Pan-Caribbean Sugar for instance has requested a license from the Sugar Industry Authority (SIA) to market their own sugar in accordance with the Sugar Industry Control Act and the terms of their Sale and Purchase Agreement This is being facilitated The Government of Jamaica will continue in the new dispensation to insist on the adherence by all manufacturers to the Cane Payment System which guarantees transparency and provides confidence to farmers that they are getting their fair share of proceeds
This Government accepts the fmdings of the Wint Commission in respect of the restructuring of the institutional and regulatory framework and the Cane Payment System to take into account our new realities The Government of Jamaica will not abandon its social responsibilities to the many workers and farmers displaced in the privatization process
7
In this regard in the fmancial year 20122013 the Government of Jamaica with support from the European Unions Accompanying Measures for Sugar Programme will spend over J$10B in relocating residents of the Sugar Barracks upgrading sporting facilities and the execution of critical small community infrastructur~ projects Additionally in order to ensure that our cane farmers continue to maintain a stake in the sugar sector the Government of Jamaica will increase the capital of the Cane Expansion Fund to J$17B fast track rehabilitation of critical cane roads and establish a number of~ugar Dependent Areas
~~l Honourable Roger Clarke Minister of Agriculture and Fisheries March 5 2012
8
conditions as for St Thomas Sugar except that the annual lease is US$4000 per hectare
bull Round (3) On 30th July 2010 the agreements which initiated the divestment of the three remaining GOJ estates namely Frome Monymusk and Bernard Lodge to COMPLANT International Sugar Industry Company were signed The divestment agreement between GOJ and COMPLANT provided for the payment of US$9M for the factories and factory lands at Frome Monymusk and Bernard Lodge and US$35hayr to lease an estimated 30000 Hectares of land
40 Accumulated Debts of the Government-Owned Sugar Estates As at 31st January 2012 the total debt assumed by the Government of Jamaica for liabilities of Sugar Company of Jamaica Limited St Thomas Sugar Company Limited and Trelawny Sugar Company Limited (Hampden Long Pond) was J$3S58B
The debts in question were accumulated since 1999 when the Government of Jamaica assumed responsibility for Frome Monymusk and Bernard Lodge estates consequent on the failure of the previous sugar divestment to Wray amp Nephew Manufacturers Merchant Bank and Booker Tate Group in 1994 Subsequently the Government of Jamaica assumed responsibility for the operations of Tropicana Sugar Company in 2000 and Trelawny Sugar Company (HampdenLong Pond) in 2002
The nature of the debts assumed by the Government is as follows
(a) Subsequent settlement of outstanding liabilities for the three entities which existed at the at the time when they were taken over shyJ$44B
3
(b) Providing working capital and operational support to keep these entities going through various guarantees which the Government of Jamaica subsequently assumed These funding arrangements included loans from DBJ Petro-Caribe Fund NCB amp BNS shyJ$275B
(c) Assumption by the Government andor write off of statutory obligations due to the Government - J$31B
(d) HEART and property tax liabilities - J$058B
The $3558B referred to above relate to debts of the GOJ Sugar Estates all of which were incurred prior the sale of St Thomas Sugar and Trelawny Sugar Company in July 2009 and the takeover of the operations of Frome Monymusk and Bernard Lodge by the Sugar Company ofJamaica Holdings Limited (Sugar Divestment enterprise) in August 2009
50 Divestment-Related Expenses The expenditure incurred by the Government to support sugar divestment-related activities was as follows
a Notice pay and Severance to redundant sugar workers J$250B
b Compensation to Mr Aubyn Hill for privatisation services in Round 3 J$ 1618081250 (US$19036250) In addition some J$2825587801 was paid by the Ministry of Agriculture and Fisheries for Round 2
b Legal Fees J$10611972800 c Titling-related J$1461 7 28600 d Transfers to SCJ Holdings for operations
J$68330801150 e Sundry J$20999708600
4
f Total J$356B
60 Operational Expenses of SCJ Holdings Limited Prior to Divestment In addition to the assumed debt of J$3558B and the privatisation expenses of J$356B the Government of Jamaica provided some $328B to SCJH for the operations of Frome Monymusk and Bernard Lodge between 2009 and August 2011 when these Estates were handed over to new owners These included transfers from the Sugar Transformation Unit and the proceeds from privatisation as well as J$992M in loans from the PetroCaribe Fund The funds from PetroCaribe will be repaid from the anticipated lease payments from the sugar lands for 12 years Some J$6650M of the transfers to SCJH covered social services such as water electricity operations of Estate schools and clinics
70 Proceeds of the Divestment The Government has so far realized a total of J$I03046691000 (US $1212314012) from the sugar divestment process This includes
bull St Thomas Sugar Estate Total J$6706576670 (US $78900902) This includes J$4250000000 (US $50000000) for the factory and J$2456576670 (US $28900902) in lease payments
bull Trelawny Sugar Estate Total J$12750000000 (US $1 50000000) This J$12750000000 represents the proceeds from the sale of the factory as lease payments have been deferred until July 2012
bull Frome lonymusk and Bernard Lodge Total J$83590114350 (US $983413110) This includes J$76500000000 (US $900000000) for the factory and J$7090114350 (US $834 13110) in lease payments
5
8 Post-Divestment Operations The total expenditure so far by the new owners of the five (5) former GOJ Sugar Estates is estimated at J$107B The breakout of this amount is as follows
- Golden Grove Sugar Company - J$16B - Everglades Farms Limited - J$28B - Pan -Caribbean Sugar Company - J$63B
In respect of lands planted to sugar cane by the new owners the figures are as follows
- Golden Grove Sugar Company- 284 Hectares - Everglades Farms Limited - 426 Hectares and - Pan-Caribbean Sugar Company - 949 Hectares
The following are the current numbers of full-time and seasonal employees of the former GOJ Sugar Estates
- Golden Grove Sugar Company - 580 persons - Everglades Farms Limited -783 persons - Pan-Caribbean Sugar Company - 1850 persons
The Sugar Privatisation Exercise is showing encouraging results given the to-date performance of the divested Estates
Golden Grove St Thomas Since divestment of St Thomas Sugar Estate to Golden Grove Sugar Company Limited in 2009 cane production has increased by 1085 percent from 163000 tonnes to 181000 tonnes Sugar production has increased by 281 percent from 12587 tonnes to 16123 tonnes
Everglades Although there was an unfortunate mishap that caused the factory to be closed for rehabilitation in the 2010 11 crop 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 that area
6
COMPLANT
Having handed over the factories to COMPLANT in August 2011 the Government is satisfied with the level of investment by their operating subsidiary Pan-Caribbean Sugar Company in Frome Monymusk and Bernard Lodge Sugar Estates PanshyCaribbean has procured over fifty (50) pieces of new equipment for use on the Estates 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 J$109B (US $1270M)
Cane Farmers Having seen the level of investments in field and factory by the new owners of the divested estates cane farmers have planted and replanted close to 2000 hectares of cane using concessionary loans from the Cane Expansion Fund To date J$8580M has been injected by the Ministry into the Fund
90 An Enabling Policy Environment tor the Sugar Cane Sector Although the Government is no longer participating in the commercial operations of the industry it continues to play an important role in policy and regulation Pan-Caribbean Sugar for instance has requested a license from the Sugar Industry Authority (SIA) to market their own sugar in accordance with the Sugar Industry Control Act and the terms of their Sale and Purchase Agreement This is being facilitated The Government of Jamaica will continue in the new dispensation to insist on the adherence by all manufacturers to the Cane Payment System which guarantees transparency and provides confidence to farmers that they are getting their fair share of proceeds
This Government accepts the fmdings of the Wint Commission in respect of the restructuring of the institutional and regulatory framework and the Cane Payment System to take into account our new realities The Government of Jamaica will not abandon its social responsibilities to the many workers and farmers displaced in the privatization process
7
In this regard in the fmancial year 20122013 the Government of Jamaica with support from the European Unions Accompanying Measures for Sugar Programme will spend over J$10B in relocating residents of the Sugar Barracks upgrading sporting facilities and the execution of critical small community infrastructur~ projects Additionally in order to ensure that our cane farmers continue to maintain a stake in the sugar sector the Government of Jamaica will increase the capital of the Cane Expansion Fund to J$17B fast track rehabilitation of critical cane roads and establish a number of~ugar Dependent Areas
~~l Honourable Roger Clarke Minister of Agriculture and Fisheries March 5 2012
8
(b) Providing working capital and operational support to keep these entities going through various guarantees which the Government of Jamaica subsequently assumed These funding arrangements included loans from DBJ Petro-Caribe Fund NCB amp BNS shyJ$275B
(c) Assumption by the Government andor write off of statutory obligations due to the Government - J$31B
(d) HEART and property tax liabilities - J$058B
The $3558B referred to above relate to debts of the GOJ Sugar Estates all of which were incurred prior the sale of St Thomas Sugar and Trelawny Sugar Company in July 2009 and the takeover of the operations of Frome Monymusk and Bernard Lodge by the Sugar Company ofJamaica Holdings Limited (Sugar Divestment enterprise) in August 2009
50 Divestment-Related Expenses The expenditure incurred by the Government to support sugar divestment-related activities was as follows
a Notice pay and Severance to redundant sugar workers J$250B
b Compensation to Mr Aubyn Hill for privatisation services in Round 3 J$ 1618081250 (US$19036250) In addition some J$2825587801 was paid by the Ministry of Agriculture and Fisheries for Round 2
b Legal Fees J$10611972800 c Titling-related J$1461 7 28600 d Transfers to SCJ Holdings for operations
J$68330801150 e Sundry J$20999708600
4
f Total J$356B
60 Operational Expenses of SCJ Holdings Limited Prior to Divestment In addition to the assumed debt of J$3558B and the privatisation expenses of J$356B the Government of Jamaica provided some $328B to SCJH for the operations of Frome Monymusk and Bernard Lodge between 2009 and August 2011 when these Estates were handed over to new owners These included transfers from the Sugar Transformation Unit and the proceeds from privatisation as well as J$992M in loans from the PetroCaribe Fund The funds from PetroCaribe will be repaid from the anticipated lease payments from the sugar lands for 12 years Some J$6650M of the transfers to SCJH covered social services such as water electricity operations of Estate schools and clinics
70 Proceeds of the Divestment The Government has so far realized a total of J$I03046691000 (US $1212314012) from the sugar divestment process This includes
bull St Thomas Sugar Estate Total J$6706576670 (US $78900902) This includes J$4250000000 (US $50000000) for the factory and J$2456576670 (US $28900902) in lease payments
bull Trelawny Sugar Estate Total J$12750000000 (US $1 50000000) This J$12750000000 represents the proceeds from the sale of the factory as lease payments have been deferred until July 2012
bull Frome lonymusk and Bernard Lodge Total J$83590114350 (US $983413110) This includes J$76500000000 (US $900000000) for the factory and J$7090114350 (US $834 13110) in lease payments
5
8 Post-Divestment Operations The total expenditure so far by the new owners of the five (5) former GOJ Sugar Estates is estimated at J$107B The breakout of this amount is as follows
- Golden Grove Sugar Company - J$16B - Everglades Farms Limited - J$28B - Pan -Caribbean Sugar Company - J$63B
In respect of lands planted to sugar cane by the new owners the figures are as follows
- Golden Grove Sugar Company- 284 Hectares - Everglades Farms Limited - 426 Hectares and - Pan-Caribbean Sugar Company - 949 Hectares
The following are the current numbers of full-time and seasonal employees of the former GOJ Sugar Estates
- Golden Grove Sugar Company - 580 persons - Everglades Farms Limited -783 persons - Pan-Caribbean Sugar Company - 1850 persons
The Sugar Privatisation Exercise is showing encouraging results given the to-date performance of the divested Estates
Golden Grove St Thomas Since divestment of St Thomas Sugar Estate to Golden Grove Sugar Company Limited in 2009 cane production has increased by 1085 percent from 163000 tonnes to 181000 tonnes Sugar production has increased by 281 percent from 12587 tonnes to 16123 tonnes
Everglades Although there was an unfortunate mishap that caused the factory to be closed for rehabilitation in the 2010 11 crop 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 that area
6
COMPLANT
Having handed over the factories to COMPLANT in August 2011 the Government is satisfied with the level of investment by their operating subsidiary Pan-Caribbean Sugar Company in Frome Monymusk and Bernard Lodge Sugar Estates PanshyCaribbean has procured over fifty (50) pieces of new equipment for use on the Estates 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 J$109B (US $1270M)
Cane Farmers Having seen the level of investments in field and factory by the new owners of the divested estates cane farmers have planted and replanted close to 2000 hectares of cane using concessionary loans from the Cane Expansion Fund To date J$8580M has been injected by the Ministry into the Fund
90 An Enabling Policy Environment tor the Sugar Cane Sector Although the Government is no longer participating in the commercial operations of the industry it continues to play an important role in policy and regulation Pan-Caribbean Sugar for instance has requested a license from the Sugar Industry Authority (SIA) to market their own sugar in accordance with the Sugar Industry Control Act and the terms of their Sale and Purchase Agreement This is being facilitated The Government of Jamaica will continue in the new dispensation to insist on the adherence by all manufacturers to the Cane Payment System which guarantees transparency and provides confidence to farmers that they are getting their fair share of proceeds
This Government accepts the fmdings of the Wint Commission in respect of the restructuring of the institutional and regulatory framework and the Cane Payment System to take into account our new realities The Government of Jamaica will not abandon its social responsibilities to the many workers and farmers displaced in the privatization process
7
In this regard in the fmancial year 20122013 the Government of Jamaica with support from the European Unions Accompanying Measures for Sugar Programme will spend over J$10B in relocating residents of the Sugar Barracks upgrading sporting facilities and the execution of critical small community infrastructur~ projects Additionally in order to ensure that our cane farmers continue to maintain a stake in the sugar sector the Government of Jamaica will increase the capital of the Cane Expansion Fund to J$17B fast track rehabilitation of critical cane roads and establish a number of~ugar Dependent Areas
~~l Honourable Roger Clarke Minister of Agriculture and Fisheries March 5 2012
8
f Total J$356B
60 Operational Expenses of SCJ Holdings Limited Prior to Divestment In addition to the assumed debt of J$3558B and the privatisation expenses of J$356B the Government of Jamaica provided some $328B to SCJH for the operations of Frome Monymusk and Bernard Lodge between 2009 and August 2011 when these Estates were handed over to new owners These included transfers from the Sugar Transformation Unit and the proceeds from privatisation as well as J$992M in loans from the PetroCaribe Fund The funds from PetroCaribe will be repaid from the anticipated lease payments from the sugar lands for 12 years Some J$6650M of the transfers to SCJH covered social services such as water electricity operations of Estate schools and clinics
70 Proceeds of the Divestment The Government has so far realized a total of J$I03046691000 (US $1212314012) from the sugar divestment process This includes
bull St Thomas Sugar Estate Total J$6706576670 (US $78900902) This includes J$4250000000 (US $50000000) for the factory and J$2456576670 (US $28900902) in lease payments
bull Trelawny Sugar Estate Total J$12750000000 (US $1 50000000) This J$12750000000 represents the proceeds from the sale of the factory as lease payments have been deferred until July 2012
bull Frome lonymusk and Bernard Lodge Total J$83590114350 (US $983413110) This includes J$76500000000 (US $900000000) for the factory and J$7090114350 (US $834 13110) in lease payments
5
8 Post-Divestment Operations The total expenditure so far by the new owners of the five (5) former GOJ Sugar Estates is estimated at J$107B The breakout of this amount is as follows
- Golden Grove Sugar Company - J$16B - Everglades Farms Limited - J$28B - Pan -Caribbean Sugar Company - J$63B
In respect of lands planted to sugar cane by the new owners the figures are as follows
- Golden Grove Sugar Company- 284 Hectares - Everglades Farms Limited - 426 Hectares and - Pan-Caribbean Sugar Company - 949 Hectares
The following are the current numbers of full-time and seasonal employees of the former GOJ Sugar Estates
- Golden Grove Sugar Company - 580 persons - Everglades Farms Limited -783 persons - Pan-Caribbean Sugar Company - 1850 persons
The Sugar Privatisation Exercise is showing encouraging results given the to-date performance of the divested Estates
Golden Grove St Thomas Since divestment of St Thomas Sugar Estate to Golden Grove Sugar Company Limited in 2009 cane production has increased by 1085 percent from 163000 tonnes to 181000 tonnes Sugar production has increased by 281 percent from 12587 tonnes to 16123 tonnes
Everglades Although there was an unfortunate mishap that caused the factory to be closed for rehabilitation in the 2010 11 crop 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 that area
6
COMPLANT
Having handed over the factories to COMPLANT in August 2011 the Government is satisfied with the level of investment by their operating subsidiary Pan-Caribbean Sugar Company in Frome Monymusk and Bernard Lodge Sugar Estates PanshyCaribbean has procured over fifty (50) pieces of new equipment for use on the Estates 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 J$109B (US $1270M)
Cane Farmers Having seen the level of investments in field and factory by the new owners of the divested estates cane farmers have planted and replanted close to 2000 hectares of cane using concessionary loans from the Cane Expansion Fund To date J$8580M has been injected by the Ministry into the Fund
90 An Enabling Policy Environment tor the Sugar Cane Sector Although the Government is no longer participating in the commercial operations of the industry it continues to play an important role in policy and regulation Pan-Caribbean Sugar for instance has requested a license from the Sugar Industry Authority (SIA) to market their own sugar in accordance with the Sugar Industry Control Act and the terms of their Sale and Purchase Agreement This is being facilitated The Government of Jamaica will continue in the new dispensation to insist on the adherence by all manufacturers to the Cane Payment System which guarantees transparency and provides confidence to farmers that they are getting their fair share of proceeds
This Government accepts the fmdings of the Wint Commission in respect of the restructuring of the institutional and regulatory framework and the Cane Payment System to take into account our new realities The Government of Jamaica will not abandon its social responsibilities to the many workers and farmers displaced in the privatization process
7
In this regard in the fmancial year 20122013 the Government of Jamaica with support from the European Unions Accompanying Measures for Sugar Programme will spend over J$10B in relocating residents of the Sugar Barracks upgrading sporting facilities and the execution of critical small community infrastructur~ projects Additionally in order to ensure that our cane farmers continue to maintain a stake in the sugar sector the Government of Jamaica will increase the capital of the Cane Expansion Fund to J$17B fast track rehabilitation of critical cane roads and establish a number of~ugar Dependent Areas
~~l Honourable Roger Clarke Minister of Agriculture and Fisheries March 5 2012
8
8 Post-Divestment Operations The total expenditure so far by the new owners of the five (5) former GOJ Sugar Estates is estimated at J$107B The breakout of this amount is as follows
- Golden Grove Sugar Company - J$16B - Everglades Farms Limited - J$28B - Pan -Caribbean Sugar Company - J$63B
In respect of lands planted to sugar cane by the new owners the figures are as follows
- Golden Grove Sugar Company- 284 Hectares - Everglades Farms Limited - 426 Hectares and - Pan-Caribbean Sugar Company - 949 Hectares
The following are the current numbers of full-time and seasonal employees of the former GOJ Sugar Estates
- Golden Grove Sugar Company - 580 persons - Everglades Farms Limited -783 persons - Pan-Caribbean Sugar Company - 1850 persons
The Sugar Privatisation Exercise is showing encouraging results given the to-date performance of the divested Estates
Golden Grove St Thomas Since divestment of St Thomas Sugar Estate to Golden Grove Sugar Company Limited in 2009 cane production has increased by 1085 percent from 163000 tonnes to 181000 tonnes Sugar production has increased by 281 percent from 12587 tonnes to 16123 tonnes
Everglades Although there was an unfortunate mishap that caused the factory to be closed for rehabilitation in the 2010 11 crop 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 that area
6
COMPLANT
Having handed over the factories to COMPLANT in August 2011 the Government is satisfied with the level of investment by their operating subsidiary Pan-Caribbean Sugar Company in Frome Monymusk and Bernard Lodge Sugar Estates PanshyCaribbean has procured over fifty (50) pieces of new equipment for use on the Estates 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 J$109B (US $1270M)
Cane Farmers Having seen the level of investments in field and factory by the new owners of the divested estates cane farmers have planted and replanted close to 2000 hectares of cane using concessionary loans from the Cane Expansion Fund To date J$8580M has been injected by the Ministry into the Fund
90 An Enabling Policy Environment tor the Sugar Cane Sector Although the Government is no longer participating in the commercial operations of the industry it continues to play an important role in policy and regulation Pan-Caribbean Sugar for instance has requested a license from the Sugar Industry Authority (SIA) to market their own sugar in accordance with the Sugar Industry Control Act and the terms of their Sale and Purchase Agreement This is being facilitated The Government of Jamaica will continue in the new dispensation to insist on the adherence by all manufacturers to the Cane Payment System which guarantees transparency and provides confidence to farmers that they are getting their fair share of proceeds
This Government accepts the fmdings of the Wint Commission in respect of the restructuring of the institutional and regulatory framework and the Cane Payment System to take into account our new realities The Government of Jamaica will not abandon its social responsibilities to the many workers and farmers displaced in the privatization process
7
In this regard in the fmancial year 20122013 the Government of Jamaica with support from the European Unions Accompanying Measures for Sugar Programme will spend over J$10B in relocating residents of the Sugar Barracks upgrading sporting facilities and the execution of critical small community infrastructur~ projects Additionally in order to ensure that our cane farmers continue to maintain a stake in the sugar sector the Government of Jamaica will increase the capital of the Cane Expansion Fund to J$17B fast track rehabilitation of critical cane roads and establish a number of~ugar Dependent Areas
~~l Honourable Roger Clarke Minister of Agriculture and Fisheries March 5 2012
8
COMPLANT
Having handed over the factories to COMPLANT in August 2011 the Government is satisfied with the level of investment by their operating subsidiary Pan-Caribbean Sugar Company in Frome Monymusk and Bernard Lodge Sugar Estates PanshyCaribbean has procured over fifty (50) pieces of new equipment for use on the Estates 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 J$109B (US $1270M)
Cane Farmers Having seen the level of investments in field and factory by the new owners of the divested estates cane farmers have planted and replanted close to 2000 hectares of cane using concessionary loans from the Cane Expansion Fund To date J$8580M has been injected by the Ministry into the Fund
90 An Enabling Policy Environment tor the Sugar Cane Sector Although the Government is no longer participating in the commercial operations of the industry it continues to play an important role in policy and regulation Pan-Caribbean Sugar for instance has requested a license from the Sugar Industry Authority (SIA) to market their own sugar in accordance with the Sugar Industry Control Act and the terms of their Sale and Purchase Agreement This is being facilitated The Government of Jamaica will continue in the new dispensation to insist on the adherence by all manufacturers to the Cane Payment System which guarantees transparency and provides confidence to farmers that they are getting their fair share of proceeds
This Government accepts the fmdings of the Wint Commission in respect of the restructuring of the institutional and regulatory framework and the Cane Payment System to take into account our new realities The Government of Jamaica will not abandon its social responsibilities to the many workers and farmers displaced in the privatization process
7
In this regard in the fmancial year 20122013 the Government of Jamaica with support from the European Unions Accompanying Measures for Sugar Programme will spend over J$10B in relocating residents of the Sugar Barracks upgrading sporting facilities and the execution of critical small community infrastructur~ projects Additionally in order to ensure that our cane farmers continue to maintain a stake in the sugar sector the Government of Jamaica will increase the capital of the Cane Expansion Fund to J$17B fast track rehabilitation of critical cane roads and establish a number of~ugar Dependent Areas
~~l Honourable Roger Clarke Minister of Agriculture and Fisheries March 5 2012
8
In this regard in the fmancial year 20122013 the Government of Jamaica with support from the European Unions Accompanying Measures for Sugar Programme will spend over J$10B in relocating residents of the Sugar Barracks upgrading sporting facilities and the execution of critical small community infrastructur~ projects Additionally in order to ensure that our cane farmers continue to maintain a stake in the sugar sector the Government of Jamaica will increase the capital of the Cane Expansion Fund to J$17B fast track rehabilitation of critical cane roads and establish a number of~ugar Dependent Areas
~~l Honourable Roger Clarke Minister of Agriculture and Fisheries March 5 2012
8
