Susan Gordon, Business Reporter

Aubyn Hill, chairman of the Sugar Cane Enterprise Team that is managing the divest-ment of Jamaica's sugar industry. - File

The Sugar Cane Enterprise Team (SET), the body handling the privatisation of the Sugar Company of Jamaica's assets, has withdrawn two of the sugar estates originally posted for divestment, reducing by half the 18,600 hectares in land assets to be leased to 9,329 hectares.

The estates both located in Trelawny - 2,956 hectares of Hampden Estates Limited and the 6,315 hectares of Long Pond Estates in Clarks' Town - were deleted from the new divestment proposal posted on the SET website www.sugarcane jamaica.com, replacing the initial document distributed in May.

The Financial Gleaner understands that in the case of the Hampden Estate, the assets were withdrawn because of a lawsuit filed by the private owners against the Financial Adjustment Company (FINSAC), government's bailout agency for flagging companies that crashed in the late 1990s with the fall of the financial sector.

Chairman of the SET team Aubyn Hill though reached for comment, said he could not speak to the issue immediately. At the time he was in a board meeting at the Development Bank of Jamaica, he said.

Still unclear

In September, the former National Investment Bank of Jamaica (NIBJ), for which Hill was chairman, was merged with DBJ. Hill was named as a director to the merged entity, which is now chaired by Cabinet Secretary Dr. Carlton Davis.

It remains unclear why Long Pond was pulled from the original listings, which included six estates, the other four being Monymusk in Clarendon, Bernard Lodge in St. Catherine, Frome Estate in Westmoreland, the island's largest estate, and Ducken-field in St. Thomas. The Long Pond Estate, however, does have a minority private interest, which might have complicated attempts to sell its assests.

The estates were said to be up for leasing to private bidders while non-land assets, including raw sugar factories, an ethanol fermentary, distilleries and machinery, were to be sold.

Government, through its agency for privatisation, NIBJ, was forced to extend the bid period citing lack of interest by investors, though it had got expressions of interest from Appleton Estates, which is owned by distillers Wray and Nephew Limited, as well as two Brazilian companies, the Aracatu Group and Coimex, and Indian sugar company Damphur.

Minister of Land and Agriculture Roger Clarke subsequently announced a relaunch of the divestment process and a revamping of the proposal to potential investors, which also set a new deadline for pre-qualification bids at December 22, 2006.

DBJ indicated this week, however, that the process has generated no new interest.

"We are not in a position to respond definitively to this question given that the deadline date has not yet arrived," said the DBJ, through its communications officer Claudette White.

SET has only in recent weeks started to do a formal valuation of the assets, which according to White should be completed by March 2007.

"The valuating exercise does not impede the process they are moving on concurrently," said Donovan Stanbury, permanent secretary for the Ministry of Land and Agriculture, told the Financial Gleaner, adding that the description listed on the website was simply to attract expressions of interest.

"It took us quite a while to get a comprehensive listing of the assets. We need to know what it is to gauge the bidding process," said Stanbury.

Land and Agriculture estimates it will take no less than 18 months to wrap up the divestment. In the meantime, government has made provisions, said Stanbury, the run of the next crop year which covers December 2006 to September 2007.

susan.smith@gleanerjm.com