Tuesday, September 16, 2008

New Skeldon plant commissioning pushed back

New Skeldon plant commissioning pushed back
Stabroek News, September 16, 2008 @ 5:06 am In News | No Comments
– contractor correcting technical issues

Technical problems, which arose earlier this month, have seen the commissioning of the $181 million Skeldon sugar factory pushed back, possibly to early October, GuySuCo Chief Executive Nick Jackson said yesterday.

At a press conference at Herdmanston House yesterday, Jackson, the Chairman of GuySuCo’s Board of Directors Ronald Alli and construction contractor Andrew Jin of CNTIC of China sought to assure the media that the problems at Skeldon, which were brought to the public’s attention by the AFC on Friday, did not involve major technical component failures or structural deficiencies.

Last week the AFC had said that the sugar industry was in danger of collapse; that component failures and structural problems were found during the commissioning of the plant.

Asked when the commissioning would resume, Jackson said: “It is very difficult to anticipate at this stage but we assume that we could restart the commissioning in early October.”

Explaining the technical problems, Jin said that during the second part of the commissioning exercise, earlier this month, involving a 72-hour test run, the plant experienced some difficulties.

These involved problems of the interface between the punt dumper and the conveyor belt and problems with the shredder bearings among other technical difficulties. The contracting company, he said was conducting assessments and remedial work and was working collaboratively with the engineers and employers to move the project to the next stage of the commissioning.

He said CNTIC has invited specialists from reputable suppliers of machinery and equipment for the plant, from South Africa, England, Australia and Sweden among other places, to take part in the commissioning.

“I want to clarify that we do not have any major component failure or structural problems during the commissioning,” Jin said adding that from the design and the supply of equipment, the project was a very advanced one.

He said major construction was completed in May and the commissioning began on August 26 with three dry runs. From September 9 to 11 the factory crushed a total of 2,000 tonnes of sugar cane when it ran into technical difficulties.

He said an engineer from Australia who has worked on a similar project on that continent was working along with CNTIC to recommence commissioning as soon as possible.

Asked about losses resulting from the delay of the commissioning of the new plant, Ally said the major issue was to get the sugar cane off the ground. “That is why we have said that we are mitigating those risks by starting the old factory and commencing the extraction of sugar from the sugar cane that is in the ground from Skeldon,” he said.

By the time the tests are completed, he said, he hoped there would still be enough cane to process in the new factory in preparation for the first crop next year.

According to Jackson, with the close of the first crop in May 2008 and the completion of the factory, GuySuCo had to wait for the commencement of the second crop to carry out two important tests prior to the handing over of the factory – a 24-hour test and a 72-hour test.

He said after those two tests, which would allow for the handing over of the project to GuySuCo, there would be three other 72-hour tests over the next year and the contractor would still be liable for defects arising from those tests. However, the factory would be in commercial use during that period.

In response to how GuySuCo was dealing with the loss of working days owing to inclement weather recently, Jackson said that because land preparation and planting were greatly affected, the corporation had increased its machinery fleet and contracted out some of the work to ensure it was completed in time.

Alli said that in addition to augmenting the fleet, GuySuCo was also looking at new and improved techniques to reduce the volume of work so that tillage, normally one day for 2.2 hectares, could be reduced during the uncertain weather patterns.

Jackson said that it was never anticipated that the factory would be fully utilized for the first year, but that it would be at full production by 2010.

He said that during the aborted commissioning phase, GuySuCo put into operation its mechanised harvesters for the first time on a commercial basis to provide cane to the factory. “I must admit that for the first couple of days, the guys who had never driven them before did a fantastic job at harvesting cane, collecting and putting them into the punt,” he said.

In addition, he said that as a part of the modernising of the factory, GuySuCo has been providing 10 megawatts of power to the national grid, which is fed to the Berbice area since December 2007.

On July 11, Minister of Agriculture, Robert Persaud had told the parliamentary Economic Services Committee that the Skeldon factory was set to roll on August 2.

He had said that GuySuCo was “contractually obliged to supply cane to the new factory from August 2, with a date of takeover of August 8, 2008.”

CNTIC, he said, would then have 28 days from the date of takeover to achieve full operation.
If the takeover process was not completed during this period, liquidated damages would apply.

While he admitted that the Skeldon project was behind its scheduled start up time, he said that contrary to an assumption, there was never any agreement to deliver the factory in 2006. He noted that the project was conceived in 1998/1999 but Guyana’s classification as a Highly Indebted Poor Country delayed the start until 2004. The contracts were not signed until late January 2005, owing to the floods that affected the country’s coastland.

The original date of completion was October 2007 but because of increased piling and other delays, including weather and the Chinese contractors’ visa issues, completion was set for August 2 this year.

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