Gov’t to absorb billions of losses from sugar industry

The government is getting ready to absorb a further $4 billion in losses that has dragged down the sugar industry.

This comes even as the Jamaica Labour Party (JLP) administration prepares to test new divestment strategies.

The Cabinet met Monday to examine the fresh divestment plans.

The Cabinet sat down after Prime Minister Bruce Golding told the country on Friday that talks with Infinity Bio-Energy were scrapped because of their inability to come up with the required cash to buy out the government's sugar assets.

With preliminary numbers being assessed, the industry's main holding company, the Sugar Company of Jamaica (SCJ) has racked up losses in excess of $4.2 billion heading into the current crop.

Agriculture Minister, Dr. Christopher Tufton disclosed on Monday afternoon, that the cabinet has mandated the sugar divestment team to aggressively explore new options.

While steering clear of giving specific details Dr. Tufton, told RJR News that extensive due diligence will be undertaken.

This he said is to ensure that the sugar divestment process relieves the government of the financial burden in the shortest time.

"Myself and the team presented a proposal some specifics as to options and also very importantly a process that would see us advancing over the short term more concrete decisions as to exploring the critical options as to the divestment of the assets,"

Dr. Tufton said the Ministry is reinforcing its plans as it prepares for the retrenchment of some members of the sugar industry.

He said the government is prepared to exercise the six month window that allows for the completion of the redundancy exercise.

"The other challenge that we are going to face is for fall out for the re-engagement of only a part of the workforce based on those that were there last time. Frome is operating at approximately 50% of the labour force and based on the numbers coming in they are doing fairly well,"

"We anticipate that in terms of the other estates we are not going to have a full scale re-engagement of the entire workforce, it will be anywhere between 40% and 60%," said Dr. Tufton.