The much-touted Barbados Cane Industry Restructuring Project (BCIRP) tonight appears to be facing a serious threat.
The Inter-Sugar Partnership (ISP), which negotiated a $70 million sugar bond with Ansa Merchant Bank of Trinidad and Tobago for the project, is casting blame on Minister of Finance Chris Sinckler.
The problem reportedly stems from efforts by Sinckler to change a May 15, 2013 Cabinet decision which directed that the bond money be used to fund the field side of the BCIRP and also its advance financing requirements.
In addition to that, a letter from the Permanent Secretary in the Ministry of Agriculture, Esworth Reid, dated February 27, 2015, reminded the chairman of the Barbados Agricultural Management Company (BAMC) that “the funds borrowed are to be managed by the Barbados Cane Industry Corporation (BCIC), the Government entity charged with responsibility to implement the restructuring of the project.”
Speaking to Barbados TODAY from the United Kingdom, Edward Marston, an ISP director, was adamant that the island’s sugar industry would die if Sinckler succeeded in redirecting the proceeds of the bond to satisfy an outstanding debt by the BAMC.
“The effect of what would happen, if the Minister of Finance is successful, is that out of a bond proceeds of $31 million net, for which $12 million have been left with the BAMC to pay the farmers that the Prime Minister promised . . . approximately $19 million (remained) which was transferred to Barbados Cane Industry Corporation, because that is the entity that has been charged by Cabinet with responsibility to undertake this project,” Marston noted.
“My understanding is that the inter-financial arrangement that the Minister of Finance is seeking to rely on, which is that funds are due back to the Treasury (amounting to) $17 million. So out of $19 million that went to BCIC, the Minister of Finance is requesting that $17 million be sent back to the Treasury. That would leave the BCIC with roughly $2 million,” he added.
Marston pointed out that the BCIC cannot refund the $17 million because it has had to deduct four or five million from the $19 million to pay over to BAMC to start this year’s sugar crop. He said: “The only money left at BCIC now is $15 million for which the Minister of Finance is saying he is entitled to $17 million.”
Marston added: “If the Minister of Finance is successful in getting the Cabinet of Barbados or whoever else to agree to this new adoption, it in essence means that the Government’s BCIRP Project is dead by default.”
“Not a nickel (would be left) to advance the due diligence with the funders, no money to pay Bosh, the engineering constructors, no money to pay the demolition which is a precondition to the funding [nor] the environmental assessment.”
Ian Rogers, another ISP director who participated in the interview, cautioned that the “most fundamental fallout” would adversely affect farmers. “But more fundamentally,” he stressed, “(there would be) no money to pay the balance of payment that would be due to the farmers for the 2015 crop, contrary to promises made by the Prime Minister that this year’s crop would be paid for in full”.
Rogers noted that what the Minister of Finance was asking would also go against the basis on which Ansa Merchant Bank raised the $70 million loan in the first place.
In a letter written to the General Manager of BAMC, Leslie Parris, dated February 23, 2015, and signed by Gia Howell for the Permanent Secretary in the Ministry of Finance, Parris was instructed to settle a previous debt from the money received from Ansa Merchant Bank.
“I am directed to inform you that the Minister of Finance has advised that the advances related to salaries, wages, vacation pay and payments to SOL Barbados [Simpson Oil Limited] and the overseas supplier Czarnikov made to BAMC, will be reimbursed to the Treasury from the proceeds of the $32 million loan from Ansa Merchant Bank,” the letter read.
”Please have the necessary loan agreement between the BAMC and the Government of Barbados drawn up to facilitate the reimbursement to the Treasury from the proceeds of this loan,” it concluded.
In reply to the Minister of Finance’s request, Permanent Secretary in the Ministry of Agriculture, Esworth Reid, wrote on February 27, 2015 “the Minister of Agriculture, Food, Fisheries and Water Resource Management has instructed the Permanent Secretary to convey the…position to the principals of the Barbados Agricultural Management Company Limited for their guidance and compliance, because your request as instructed by the Minister of Finance, appears counter to the decision of the Cabinet.”
When contacted, Sinckler said he had no comment to make on the matter.