After months of trial and error, Cabinet yesterday signed off on the divestment of two of five state-owned sugar estates to two local entities.

Making the disclosure in Parliament yesterday, Agriculture Minister Dr Christopher Tufton said approval had been given for the divestment of the St Thomas Sugar Company to a consortium between Fred M Jones Limited and Seprod, and for the Trelawny Sugar Company to go to Everglades Farms.

Tufton said that in both instances the sugar factories and the attendant facilities, as well as the sugar cane lands are being leased for 50 years with a provision to renew the arrangement for another 25 years.

He said the proposed purchase price for the Trelawny Sugar Company factory was put at US$1.5 million with a US$40 per hectare per annum lease for the first 10 years. He said the purchase price for the St Thomas Sugar Company was US$500,000 with the lease price being US$54 per hectare yearly.

Tufton, who said both entities will commit to carrying out critical capital expenditure to modernise and improve the factories, explained that in the case of Trelawny, the commitment was for a US$6.2-million expansion and modernisation over five years, while for St Thomas it was US$2.74 million over two years.

He said negotiations with the other shortlisted entities with respect to the Frome, Monymusk and Bernard Lodge packages are continuing.

“I expect to seek Cabinet approval and report back to this House in less than two weeks,” Dr Tufton said.

In the meantime, he said the Government had kept true to its promise to pay over redundancy payments totalling $1.83 billion to 5,573 displaced sugar company employees on June 16.

The former People’s National Party Government in December 2005 presented a Sugar Adaptation Strategy outlining a number of reforms for the industry.

Eight pre-qualified bidders were shortlisted, of which only Brazilian company Infinity Bio submitted a bid in February 2008.

Expectations that the estates would have been handed over to the entity later that year fell through after it became clear that the entity could not finance the venture with the onset of the global financial meltdown.

The divestment process was reopened early in 2009 and a new deadline of March 13, 2009 set for submission of proposals. Fourteen were received, of which four proposals were shortlisted.