Consultant sought to shape strategic plan
25 September, 2023, 1:00 pm
The value of the accumulated loss of a $102 million loan taken by Fiji Sugar Corporation in 2005 from the EXIM Bank of India is currently estimated at $900 million, said Minister for Sugar, Charan Jeath Singh.
He said these losses have been calculated on the “seriously mismanaged investment” where the FSC management in 2005 outsourced all its rights and interests to an unknown person and company in India, giving him $100 million to spend, the way he wanted and largely without caveats or controls.
“The Fiji Sugar Industry suffered a loss of $550 million through its disastrous mill upgrade under the Sugar Technical Mission (STM) program of its four mills since its commencement in 2006,” said Mr Singh.
“And the losses continue to accumulate even today through interests on the borrowed money.
“This project was financed through an initial loan of $102 million from the EXIM Bank of India. It was contracted to the New Delhi-based Indian firm Sugar Technology Mission and dubbed the STM project.
“The present value of the accumulated loss of this seriously mismanaged investment misadventure and its real opportunity cost is almost double that amount now of $900 million plus.
“Yet despite these huge losses, FSC is still carrying an EXIM debt of nearly $75 million among its total debts and guarantees of nearly $500 million.”
Mr Singh said these consequential losses are summarised in the Final Impact Report of the corporation and attributed directly to the technical failures and lack of delivery of the STM upgrade project.
“The fault lay entirely in the poor planning, execution and management of the project, compounded by serious conflicts of interests, absence of basic internal controls, insufficient and inappropriate procedures for certification of work completed, authorisation of progress payments and general negligence surrounding oversight.”