Sudan eyes privatising sugar factories: minister
June 9, 2013 (KHARTOUM) – Sudan’s minister of industry, Abdel Wahab Mohamed Osman, declared this week that the government has no option but to privatise several sugar factories in order to obtain financial resources allowing it to expand and increase productivity.
The minister defended the decision to privatise sugar factories through partnership before the national assembly pointing out that the state-owned sugar companies has for two years sought 120 million euros to finance renovation of sugar factories but that the government failed to secure even “one pound”.
He also acknowledged the difficulty of obtaining any external financing and suggested that revenues of sugar factories are not utilised to support the industry but deposited with the ministry of finance to be used according to its priorities.
Osman stressed that the proposed partnership will be based upon strict conditions and regulations, notably the government’s full ownership of its fixed assets in the sugar factories which were identified through joint houses of expertise including the advisory board at the University of Khartoum and another European house.
He further pointed out that the relationship between the farmers and the companies will not be affected and stressed that the companies aims to increase production capacity from 350,000 tonnes to 700,000 tonnes, as well as produce 170 megawatts of electricity from sugar residues.
The minister praised privatisation experiences in Sudan and mentioned the success of the Atbara cement plant, saying that private investors usually make more profits than the government.
The head of the parliamentary subcommittee on Energy, Mining and Industry, Omer Adam Rahma, for his part, demanded that partnership ratios 70% and 30% should not be applied before determining the value of the government’s fixed assets.
He acknowledged the government’s inability to offer $800 million for sugar factories’ renovation, saying that the finance ministry’s treasury is devoid of “a single penny”.
The lawmakers stressed that any decision regarding privatisation should involve all stakeholders and demanded the new investors provide guarantees for the continuity and stability of sugar prices.
The minister of industry had earlier said that the main motive for privatisation is increasing efficiency and improving workers’ conditions.
He denied that privatisation would lead to workers layoffs, saying, instead, it will increase their numbers and skills through training.
Some sugar experts in Khartoum say, however, it is better to renovate the four factories instead of planning to construct three new factories, adding the privatisation may also destroy the social fabric and the towns that emerged around it.
(ST)