Bermine has not been profitable since l980
Stabroek News
May 24, 2002

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Dear Editor,

I am amazed to read and listen to Lincoln Lewis's na´ve explosion about the lie that - `Exclusive loading rights, not production, hurting Bermine'.

Further, it is sad to listen and follow Mr Desmond Hoyte's present day position on the bauxite industry. I would like to remind Mr Hoyte about his party manifesto explanation and prescription on the Bauxite Industry in 1992.

Quote: The manifesto of the People's National Congress 1992 General Elections, page 22, paragraph 8:

"Bauxite is Guyana's Major Mining Industry and main Industrial Activity. After nationalisation, Guyana benefited from being able to command very high prices for it Bauxite products. However, World Market prices fell in the 1980s, leading to a substantial reduction in revenues. As a result, conditions in the Industry deteriorated sharply."

Line 5 from the bottom of page 22:

`It will move speedily to divest the Berbice Operations'.

In 1989/90, when Viceroy came to Guyana, it was a reputable and well-recommended company owned by a Greek family, incorporated in New York, and engaged in International Shipping. It still is.

Viceroy came to Guyana as an independent International Shipping Contractor to the Aroaima Bauxite Company (ABC), which was a joint venture established between the government of Guyana (the PNC was at that time the party in government) and Reynolds International (a subsidiary of Reynolds Metals Company) of Richmond, Virginia in the USA. Aroaima would not have been viable without such a capability, which incidentally, neither the government of Guyana (even if it had wanted to) nor any Guyanese contractor or group of contractors possessed.

And in order for Viceroy to do a good job in shipping Guyana Bauxite (which, in the circumstances of Guyana, has to include transshipment) for the benefit of ABC, and indeed the Guyana economy as a whole, it would have been senseless for any government, in all the circumstances, not to ensure that Viceroy provided itself with all the transshipment facilities which it definitely needed - and which any shipping company would need in all the circumstances. Inevitably, exclusive management and control of such transshipment facilities was a vital requirement - and would be for any such shipping company. Viceroy therefore paid for and established essential transshipment facilities first in the Demerara river and then in the Berbice river. As an example of this requirement for exclusive management and control of the ABC transshipment facilities, it is to be noted that at the same time as Viceroy started its transshipping operations in Guyana - initially in the Demerara river - Guybulk, a joint venture shipping company between AS Bulkhandling of Norway and Bidco was, as contractor to Bidco, operating in the same way. Like Viceroy, Guybulk also had exclusive management and control of its own transshipment facilities in the Demerara river - albeit at a different location.

Mr Haslyn Parris, who was then the appropriate Deputy Prime Minister of the government of Guyana signed the necessary documents according to Viceroy exclusive management and control over the ABC transshipment facilities which Viceroy required in order to be a good, efficient and effective contractor to ABC and which Viceroy itself had paid for and established.

After some time, ABC found it more feasible to transship its Bauxite in the Berbice river. And there would have been no problem today if Bidco had been able to retain the Guybulk Exclusive Transshipment facilities in the Demerara river (or even elsewhere) or if Bidco had been able to establish a transshipment facility of their own, without Guybulk (and, of course, without ABC/Viceroy).

What then happened was that, Guybulk having departed, and Bidco being unable and/or unwilling to establish a transshipment facility of their own, Bidco had to rely on the ABC/Viceroy transshipment facility for transshipment of Bidco/Bermine Bauxite. Which meant that Viceroy, while always willing to help, could not be expected to do so to the detriment of their own transshipment obligations to ABC and ABC while also being willing to help, could not be expected to do so to the detriment of ABC's own obligations to its own bauxite customers.

And as Bermine's Production difficulties (including delays in meeting shipments) increased, it inevitably became increasingly burdensome for ABC/Viceroy to assist in the transshipment of Bermine Bauxite.

The present position

The situation has now changed adversely for ABC. Bauxite can at present be bought cheap from many sources around the world. ABC now has a much smaller market for its Bauxite. The maintenance of the silo vessel which was an important part of the ABC transshipment facility, is no longer feasible. It is purely a matter of viability. The silo vessel has therefore departed. In those circumstances ABC's loading rate has been cut and ABC will not itself survive unless the management of the ABC Transshipment Facility - without the silo vessel, the MV `Bulk Venturer' is very tightly organised and controlled by a single controller, i.e. Viceroy.

Exclusivity does not at all mean that Bermine cargoes are necessarily or automatically excluded. What it does mean is that, difficult as it may be for some to understand and appreciate, it really would be in no one's interest to bring about, or to encourage, a sort of `free-for-all' state of affairs in the operation of the ABC Transshipment Facility. Even in this much more difficult situation where scheduling is key, ABC/Viceroy is still willing to help, provided, however, Viceroy remains in control and is accountable for the timely and efficient operation of the transshipment facility.

Any other scenario cannot really be serious or practicable.

Buyer's market

Today Bauxite is presently under the dictatorship of the buyers.

Mr Hoyte and Mr Lincoln Lewis are fully aware that at Bidco/Bermine there is a type of incestuous link among the key officials.

Lincoln Lewis, John Lewis, Julian Archer, Carmichael and we can continue the names of people who are running things at Bidco/Bermine.

Bidco is the shipping agent of Viceroy and Julian Archer is the Shipping Czar for Bidco/Bermine and the Chief Executive Officer of Bidco.

Lincoln Lewis is a member of Bidco and the present chairman of Bermine, while John Lewis is the Chief Executive Officer of Bermine for the last decade.

On Monday 8th April, 2002 a formal meeting was held at Bidco boardroom with Ron Webster, Julian Archer, Claude Saul and John Lewis all for Bidco along with Neil Kumar, Winston Brassington and Bernard Crawford from ABC.

The Viceroy issue was fully discussed and in principle we all agreed that ALCOA is looking to drop Bermine but ABC must help Bermine.

Julian assured the meeting that the shipment in question was on stream. However, Neil Kumar requested the shipping schedules for the next three shipments and he promised that ABC will be most helpful to facilitate same.

ALCOA is offering the Bermine Bauxite to the Russians. The crux of the matter is that the Russians have in-country, if not in-house shipping arrangements at their disposal which is far cheaper. To make the story short ALCOA has no more interest in Bermine Bauxite.

Let us remind Desmond Hoyte that he put up the Bauxite Industry to be privatised before the 1992 General elections.

This PPP/C government encouraged privatisation ALCOA, ALCAN; Reynolds did the necessary `due diligence on Bermine'.

Mr P.Q. DeFreitas, Mr Hoyte's nominee as a Bauxite specialist was hired to do a study on Bermine. All the studies clearly indicate that Bermine was not profitable and was declining since 1980.

All the shouts about what is happening at Kwakwani and Everton were well known long before now. The management of Bidco/Bermine are fully aware of the millions of dollars debt that have been incurred. It is disgraceful to know that those who did the `due diligence' were not given the audited statements. What happened to the 1999, 2000 and 2001 Auditor General Audit?

Today, it is imperative that the PNC/R along with Unions and others who are interested in helping the Bauxite communities accept the reality and come forward and have genuine discussions with government, which is the government elected by the people for all the people to find a solution for the communities.

Yours faithfully,

Neil Kumar