Tufton defends stewardship of sugar privatisation

BY ALICIA DUNKLEY Observer senior reporter dunkleya@jamaicaobserver.com

Thursday, February 16, 2012

FORMER Agriculture Minister Dr Christopher Tufton has defended his stewardship of the privatisation of the five State-owned sugar factories, arguing that the majority of the over $35-billion debt which current Agriculture and Fisheries Minister Roger Clarke says was wracked up under his watch was, in fact, inherited.

Clarke, in a statement to Parliament on Tuesday, said the now government will have to absorb the Sugar Company of Jamaica's (SCJ) total debt of $35.034 billion as at January 31 this year after the former Jamaica Labour Party government pumped $1.835 billion into it. The divestment process for the five estates began under the current government when it was in power in 2005, but was brought to completion under the Jamaica Labour Party government, now in Opposition, after it won the polls in 2007.

However, Dr Tufton said Clarke had not been fair in his pronouncements.

"The total debt that is being quoted, of that amount $20 billion was incurred under Minister Clarke and the PNP's (People's National Party) administration," Dr Tufton told the Observer yesterday.

"When I went there as minister in 2007 we inherited approximately $20 billion, and in fact more, because during the course of my tenure there were entities that were placing forward IOUs for services rendered that were incurred during their time and so that amount was a moving target which I can't tell you exactly now... which means that a good amount of that actually took place before my time," he added.

While declaring that he was not in a position to verify the exact figure, Dr Tufton pointed out that "the debt incurred by the Sugar Company under State ownership is a debt that is primarily incurred from the operations of the estate, not the divestment process".

"It's a very important distinction, because the impression is being created that the divestment process created this mountain of debt. It's only a fraction and a small fraction of the overall cost that is linked to divestment, the overwhelming amount is linked to the operations of the estates," he explained.

He said his party had been hard-pressed to come up with a viable option, but had, in the end, made the best decision.

"You had an option to either shut down the estates, in which case you would pay the worker's redundancy, or continue to operate them while you tried to get them sold to the private sector. Clearly there would be implications for shutting them down in terms of jobs and so on," he explained.

Dr Tufton said up to the time his party took office, between $4 and $5 billion in debt, was incurred on the operations of the estates.

"The balance of that debt, incurred over the four years, has to be viewed in the context of a government just taking over and cannot, in the medium term, adjust the operations of the industry to cauterise or stop that debt. It would have taken some time," he argued.

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COMMENTS (10)

Ramon Castro
2/16/2012

I say to the PNP, fix what the JLP mash up. That was the mandate given by the people of Jamaica. Instead of JUST pointing the failures of the past government, how about telling the country what you are doing to do in order to put the country in "sound footing." Seems like the PNP has no answer. By the way, didn't the heard the same LP played when the JLP came into power in 2007? Get rid of the scratch LP -- donate it to the museum.

Born Yah Jamaica
2/16/2012

@raslondon. Dont be confused. Economic 101: Apart from the profit/loss on the assets divested you also have to include in the equation the perennial loss from the operation of the assets. Yes you might loose on the disposal, but you also rid yourself of the burden of future losses. You only have the current debt to worry about knowing that it will not continue to grow. That is a benefit and it has a cost too. Are you near Cambridge University by the way ? Just asking.

rohan thompson
2/16/2012

Red Ants suffering didn't start under JLP gov. case in point, of all those people wid a cyar and two cell phones fi call dem gal. How many had to turn to cash plus, olint etc to get a down payemnt and then tun di cyar inna taxi to make the future payments? Tufton dont pay roger no mind, his legacy after all those years in agriculture was the ultimate divestment of the factories and imported foods costing less than domestic produce.

0o k
2/16/2012

Another reason why the JLP filed last time around. Failure to disclosed what was the true picture after the admitted 18 years spent running Jamaica into the ground by the Comrade Leadership.
Even now Mr. Tufton cannot icall what was the true debt as receipts were still coming in after the fact and he just did not bother tallying them up.
Politics is not dolly house, don't expect Comrades to play nice!

ras london
2/16/2012

I'm a little confused here. I thought when we sold an entity we were supposed to break even or make a profit. In this case we sold the sugar companies and still owe money. Who broker these deals?

D T
2/16/2012

Roger Clarke made a mistake when he tried to compare notes with Tufton. Look at the facts and it is clear that Clarke rack up the debt and started the divestment process. I would love to hear his reply on this. @ Red Ants for once in you life forget about the JLPNP and focus on Ja, try to make a coment based on facts and not the love for party. @FIWI LAND Very good points I couldn't say it better, leave the Ants alone he can only see Orange I wish he could see JAMAICA for a change.

Tajai Grant
2/16/2012

Over to Roger, sounds like dishonesty, but maybe you genuinely erred.

FIWI LAND
2/16/2012

@RED ANTS The jamaican sugar industry is a crippled and defeated product due to the 18 year PNP rule which ignored agriculture to the point where it seemed non existent. This was consistently pointed out by the late Motty Perkins.The Chinese didn't get any modern machinery so arguably tufton got the best deal possible considering the more viable alternatives in south america. In two years tufton put roger clark to shame with his surplus production. The problem was that there was too much produce

Adam Godson
2/16/2012

So,the majority of the debt was acquired under the previous pnp administration,under the stewardship of roger clarke?
Can't wait to hear roger clarke's reply.
Will he come with spin,or pace?
It seems fast bowling is the rage these days.

RED ANTS
2/16/2012

Listen to the fat cats making their case,while the people suffers.As i always tell people nothing is wrong with divesting because everything our gov't touches get F.... while at the same time J'cans in general like to abuse gov't system.The way how our government leave the taxpayers to pay for what they sold instead of the private man baring the cost is bad .I still believe the gov't could ask for more on the sale but CT was incline on giving them away.

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Tufton defends stewardship of sugar privatisation