Sugar divestment legacy debt burdens SCJ
The asset-rich Sugar Company of Jamaica (SCJ) Holdings Limited is struggling with a US$11-million (J$1.62-billion) post-divestment debt.
SCJ manages 200,000 acres of land islandwide worth billions of Jamaican dollars.
Managing director of SCJ, Joseph Shoucair, told Parliament’s Public Administration and Appropriations Committee (PAAC) yesterday that the debt was owed to the PetroCaribe Fund.
He explained that expenses were incurred during the divestment of government sugar factories that were financed by the Petrocaribe Fund.
“The legacy problems of this agency are innumerable, and it is those legacy issues that have held the agency back for years,” a blunt Shoucair told the committee.
The debt remains up to this point, said Shoucair, noting that most of the divested estates have been non-performing.
A Financial Gleaner report last week indicated that a decade after the Government divested its sugar assets to private ownership, many of the companies have largely failed, with some closing down production altogether.
“The understanding was that the lands were leased to the new operators of the sugar factories, and those lease rentals would service the PetroCaribe debt.”
Chairman of the PAAC, Wykeham McNeill, expressed surprise that such a large sum had been incurred in the divestment process. He suggested that the Auditor General’s Department be asked to investigate the debt.
McNeill requested that Shoucair supply the committee with details of how the debt was racked up, including professional fees and commissions paid.
In another debt-related issue, Shoucair divulged that the SCJ has some $1 billion in receivables, half of which could not be recovered.
“We have instituted lawsuits where necessary, we have evicted tenants who have not paid,” he told the committee when asked what action had been taken against the company’s debtors.
“A number of the receivables are unpaid lease rentals which are irrecoverable,” he insisted.
Shoucair said that steps were now being made to write off those sums.
“We have huge assets, but a lot of them are non-performing. We now have to make them perform,” he added.
At yesterday’s meeting, the SCJ also disclosed that the company paid out $339 million in compensation to settlers and farmers who lived on the Bernard Lodge property in St Catherine.