PRIME Minister Bruce Golding says the country’s already overburdened taxpayers will be the ones to pick up an estimated $18-billion loss when the privatisation of the ailing sugar industry is completed by June next year.

Tuesday, in an early response to questions posed by former agriculture minister Roger Clarke at last week’s sitting of the House, ahead of the expiry of the 21-day timeframe within which he had been expected to reply, Golding said the government had been backed into a corner as far as the handling of the losses were concerned.

“The government has been left in a position where it has no discretion in the matter. The government is going to have to hug up over $18 billion of losses if the privatisation process is to be carried out and that’s a burden that the taxpayers of Jamaica are going to have to unwillingly bear,” the prime minister said.

In the meantime, Golding said the arrangements for the privatisation presented to the House by Agriculture Minister Chris Tufton recently “are substantially the same as was prepared by the previous administration but with one significant exception”.

According to Golding, the new Cabinet had been “advised that no valuation had been carried out or was intended to be carried out of the assets to be privatised”.

Classifying this as “highly irresponsible”, the prime minister said Cabinet has instructed that a proper valuation be carried out while bids are being invited and before negotiations commence.

“It would be highly irresponsible to privatise whether by sale or 50-year lease, six sugar factories and more than 30,000 hectares of prime agricultural land without having a proper valuation of these assets as a benchmark for evaluating the bids and conducting the negotiations,” Golding said.

However, Clarke on Tuesday said the information the government had relating to the valuation was ‘incorrect’.

According to Clarke, “they were in the process of valuing the assets of the Sugar Company of Jamaica and (are) still in the process”.

But Golding said his Cabinet was advised by the Enterprise Team which is overseeing the privatisation process that “the decision had been taken not to conduct a valuation because the cost of the valuation itself would have been $26 million”.

He, however, said Cabinet has since “instructed the team that a valuation must be done before negotiations began”.

In the meantime, Golding said Cabinet has directed the negotiating team to act expeditiously to enable the Cabinet to take a decision before March 31, 2008 and to institute the appropriate sale and lease arrangements so that the transfer of assets can be effected by June 2008.

In October of 2005, the then People’s National Party Government announced plans to privatise government-owned sugar factories and estates, the operation of which had been incurring losses which as at May 27, 2007 stood at $15.8 billion.

A formal invitation for expressions of interest was issued in May of 2006, but only four responses were received. This was followed by two more invitations for prospective bidders.

To date eight entities have pre-qualified. Cabinet on October 1, 2007 approved the establishment of a team to invite and evaluate detailed proposals from each of the pre-qualified entities.