Government blamed for Penang Mill closure

Prem Singh – 

March 2017 marks the 100th anniversary of the official end of the indenture system.

For Fiji, this is symbolic as more than 60,000 Indian indentured labourers were brought to our shores between May 14, 1879 and November 11, 1916 to work on the cane fields by the British Colonial Government.

A historical reminder of our indenture period is the Penang Sugar Mill in Rakiraki.

Built in 1878, statistics reveal it was the smallest, oldest but for the better part of its 137 years of continuous operation, it was the most efficient Mill in terms of extracting the maximum sugar from its cane crop until the Fiji Sugar Corporation started neglecting it and from mid-1990s, made continuous rumbling to shut it down, but failed.

Sugar Mill write-off

Until Severe TC Winston destroyed it and the government and FSC decided not to repair it.

In Parliament on Thursday, March 23, 2017 the Prime Minister and Minister for Sugar Industry Josiah Voreqe Bainimarama, effectively crushed the last flickering hopes

of cane growers of Rakiraki by declaring the Mill was a ‘write-off’ and stating that I was politicising the issue.

The PM also said the issues raised by growers were being addressed through the Reform of the Sugar Cane Industry and Sugar Cane Growers Fund (Amendment) Bills (Bills 19 & 20), which have been overwhelmingly and emphatically rejected by all growers.

The growers were seeking Parliament’s intervention in agreeing to refer their petition to the Parliamentary Standing Committee on Economic Affairs so that objective solutions could be found to their grievances.

However, based on the PM’s response, Government defeated the motion by 26 votes to 16. This resulted in the petition not getting 40% approval of Parliament for the petition to be referred to the standing committee for scrutiny.

About 303 cane growers from the total number of growers in four sectors in Penang Mill area signed the petition for the Penang Mill to be repaired and reopened.

Thirteen months after STC Winston wreaked havoc, the Penang Mill, the lifeblood of the economy of Rakiraki, is now a relic, cannibalised by its owners, the Fiji Sugar Corporation.

Rakiraki economy down

The Prime Minister visited Ra and met the growers over the past 13 months.

But Penang, established in 1878, continues to remain in a state of disrepair, and a daily reminder of the tragedy being faced by growers of Ra and the sugar industry.

As a result, the economy of Rakiraki has taken a battering, even 13 months after Severe TC Winston’s destructive winds passed over Ra, exacerbated by seven floods since December 2016, with growers being kicked from pillar to post.

After STC Winston, Government and FSC decided not to repair and reopen the Mill with grand plans announced for a syrup Mill.

Mr Bainimarama said in July 2016: “As the growers stated in their petition, last year the Prime Minister also held consultations with growers, two weeks following the 2016-2017 Budget debate after we pointed out that FSC was stripping the Mill, taking parts away to other mills and had even shipped locomotives to Labasa.”

Assessing the future

He said at Penang Sangam School on July 23, 2016 that apart from allocating $2 million for the transportation of cane to the Rarawai Mill in Ba, the government was assessing the future of the Mill.

“We are currently assessing whether Penang Mill should be rebuilt as a syrup mill or the full sugar mill that it was before the cyclone. Many sugar-producing countries have smaller mills that produce only syrup. It reduces the time it takes for crushing and the syrup is taken to a bigger mill where it is crystalised into sugar.

“We have been given some assistance by the Indian government to assess the best course of action and we will be making a decision on Penang in the next two months. But whichever way we go, a full mill or a syrup mill, it will not affect your ability to supply cane. And the work will commence immediately when the assessment is completed.”

Government silent

Until now, there has been no word from the government on what is the future of the Mill. The growers wanted to know whether any assessment was done.

If yes, what was the outcome? If no, why not? And what happened to the assistance provided by the Indian Government?

Was it financial assistance or technical expertise? And if it has not been used for Penang, then where has it been channelled?

I believe that the Prime Minister failed to answer this in Parliament.

I believe that he, for all intents and purposes, sidestepped the issue.

In the absence of any clarification, it is safe to assume that no assessment was done.

I believe this only confirms that both Government and FSC decided as early as last year that Penang Mill was now history.

Growers’ losses

Last year, growers suffered losses because of cartage of their harvested sugarcane to Rarawai Mill in Ba. Last week, the new CEO of FSC, Graham Clarke, revealed that 35 per cent of crop was lost during transfer from the Penang Mill yard to Rarawai.

The Fiji Times reported Mr Clarke on Thursday, March 16, saying handling of cane firstly at Penang, where it as stockpiled, and re-handling of cane at Rarawai resulted in the loss in tonnage.

A total of 92,000 tonnes of cane were harvested in the Penang Mill area last year.

If 35 per cent was lost in transfer then this was equivalent to 32,200 tonnes.

In monetary terms with three cane payments so far totalling $61.84, this amounts to a loss of about $2 million.

This is directly a result of the non-operation of the Penang Mill. It is a direct loss suffered not only by cane growers but the economy of Rakiraki.

A bleak future

The growers clearly say in the petition that if the Mill is not operational this year, then many growers will exit the industry from next year.

We cannot afford this and 2016 will be yet another season of poor cane price. Growers were expecting more than $13 per tonne as the third cane payment but their expectations have been dashed with the announcement and payment of $9.28 per tonne.

About $61.84 has been paid so far and growers will be highly fortunate if they receive $10-$12 more in the fourth and final payments this year for 2016. The price of a tonne of cane for last year will definitely not exceed $73.

And tragically, deductions from the proceeds of the third cane payment for fertiliser and other expenses have left many growers, particularly those producing an average of 150 tonnes of cane with no income at all.

How are they expected to survive until the next payment towards the end of May, without getting into further debt because they must borrow to sustain their livelihood?

The plight of growers, particularly in Ra has been worsened by the fact that no special payment was advanced this year.

Last month, the Prime Minister told Parliament that no request was made to him but FSC

and the permanent secretary for the Ministry of Sugar are reported by both daily newspapers as telling growers in Ra that FSC did not have any money to advance a special payment because the Corporation had made a huge loss.

I know that a request was made on January 6 for a special payment. I believe this fact is well known to growers in Ra.

The depletion of income of growers means a loss to the economy as a whole because every single cent paid and earned from the industry circulates in our local economy in the cane belts.

The closure of the Mill and the fact that it will remain closed, the effects of STC (Severe Tropical Cyclone) Winston and flooding has broken their backs.

I believe they are disenchanted and the last thing they needed is for us legislators to ignore their plight. We have seen that transfer of their crop to Rarawai has resulted in major losses.

Repairable Mill

I believe the Penang Mill, before it was cannibalised and stripped by the FSC, would have been definitely repaired at a far cheaper cost than what was spent to transport cane and the value of losses incurred in doing so, which was at least $4 million.

In addition growers who used their lorries were also paid cartage but at a rate $3 less than what operators hired by FSC received.

And this rate was only implemented after the intervention of the permanent secretary for the Ministry of Sugar as earlier growers were offered a rate more than $12 less than what FSC hired operators were getting.

Furthermore, payments were made for machinery hired at a cost of $120 per hour to load cane into trucks at the Penang Mill.

Therefore, I believe, we are altogether looking at $5m spent and lost last year, which would have been more than sufficient to fix the Mill.

I believe the closure of the Penang Mill was either simply a case of bad economics or a deliberate decision by Government and the FSC.

The final nail

It was still not too late to salvage the situation. On behalf of growers, I pleaded with Government to view the plight of growers from at least a humanitarian point of view.

I pleaded that the petition be referred to the relevant standing committee, which could then formulate outcomes from the work of the committee for the betterment of growers and Ra as a whole.

I urged Parliament to strive towards positively impacting growers’ lives and  the local economy of Ra.

But I believe the PM demolished the hopes of growers by ensuring that the Penang Mill will remain a relic and not salvaged just like the wreckage of Syria rotting away on Nasilai reef for the past 133 years.

Penang Mill is no more, thanks to the Government.

Prem Singh is a Member of the Fijian Parliament representing the National Federation Party. The above article, which appeared in the Fiji Times on March 25, 2017 was sent to us by Mr Singh.

About The Author

Related posts

Leave a Reply