John Myers Jr., Business Reporter

Prequalified bidders for the assets of the Sugar Company of Jamaica (SCJ) must wait another month or more to submit final bids while Cabinet mulls the terms under which the industry will operate under private ownership.

"We have signed off on the privatisation framework," Permanent Secretary in the Ministry of Agriculture and Lands, Donovan Stanberry told the Financial Gleaner.

"All the policy issues that we would have had to address before we can negotiate with those people have been signed off at the Ministry level and is on its way to Cabinet."

Stanberry said some of the policy issues included in the framework document relates to whether the winning bidder will be mandated to fulfil Jamaica's export quotas before producing ethanol as a condition of the sale; sugar cane lands will be sold as part of the assets or leased; and if social housing facilities for sugar workers would be included as part of the package.

Concrete bid

"I fully expect that in another month or so, once Cabinet has signed off, then we (will be) in a position to say to the pre-qualified bidders 'give us your concrete bid and let us start negotiating'," Stanberry said.

Nine companies have been shortlisted to bid, including the Coimex Group and Infinity Bio Energy out of Brazil, Damphur Sugar Mills out of India, J. Wray and Nephew, owners of the privately owned sugar business Appleton Estate and Energen Development Limited from Jamaica.

Five factories are up for grabs: Bernard Lodge, Hampden, Monymusk, St. Thomas and Frome.

The assets of the SCJ are still under evaluation by the Sugar Transformation Unit, which is overseeing the divestment process. The unit is also responsible for developing a sustainable private sector-led sugar industry, setting out a diversification strategy, and developing socially and environmentally sustainable programmes in the sugar-dependent areas.

Stanberry said the evaluation should be completed shortly.

The government began accepting prequalifying bids in May 2006, but later extended the period to the end of June this year to accommodate new investors.

The divestment was proposed as a means of rescuing the over 300-year-old ailing sugar industry, whose debts were last reported at more than $14 billion.

Capital needs

The Government last lent the company $2.3 billion at 3.0 per cent interest repayable over 15 years from the PetroCaribe fund to assist the SCJ with its capital needs and preparation for divestment.

The SCJ, which supplies about 65 per cent of the island's total sugar output, is one of the largest employers of low-skilled labour.