FIJI SUGAR CORPORATION IS BASICALLY INSOLVENT UNDER FFP
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FSC's posted profit, not a profit: Mahendra Chaudhry
The National Farmers Union has questioned the $22m profit posted by the Fiji Sugar Corporation in its 2020 annual report.
In fact, the Corporation actually incurred a loss of $54m in its 2020 financial year, says NFU general secretary Mahendra Chaudhry.
He raised this at the Corporation’s annual general meeting in Lautoka.
Mr Chaudhry said the profit shown was arrived at by classifying a $50m government grant and the $26m gained from property sale as operating revenue.
"The $50m grant was given to support the minimum guaranteed price of $85 per tonne for the 2019 season, as promised by the Fiji First government just before the 2018 general elections.
“This money was not accrued to FSC. The Corporation’s role was simply to pass it onto cane farmers as a top up to the payments made under the sugar industry master award.
“It was money held in trust on behalf of the cane farmers and should not have been classified as operating revenue,” Mr Chaudhry said.
"Likewise, the net gain on property sale of $26m should not have been recognised as operating revenue as the land sale was initiated to pay off the sums owed to a lender- a land swap was done with the lender (FNPF) to pay off a loan," said Mr Chaudhry .
A more realistic presentation of the profit or loss statement would have shown these two items below the Profit (loss) from Operation line.
“Had this been done the Corporation's accounts would have shown an operating loss of $54m for 2020,” Mr Chaudhry said.
In fact, the Corporation actually incurred a loss of $54m in its 2020 financial year, says NFU general secretary Mahendra Chaudhry.
He raised this at the Corporation’s annual general meeting in Lautoka.
Mr Chaudhry said the profit shown was arrived at by classifying a $50m government grant and the $26m gained from property sale as operating revenue.
"The $50m grant was given to support the minimum guaranteed price of $85 per tonne for the 2019 season, as promised by the Fiji First government just before the 2018 general elections.
“This money was not accrued to FSC. The Corporation’s role was simply to pass it onto cane farmers as a top up to the payments made under the sugar industry master award.
“It was money held in trust on behalf of the cane farmers and should not have been classified as operating revenue,” Mr Chaudhry said.
"Likewise, the net gain on property sale of $26m should not have been recognised as operating revenue as the land sale was initiated to pay off the sums owed to a lender- a land swap was done with the lender (FNPF) to pay off a loan," said Mr Chaudhry .
A more realistic presentation of the profit or loss statement would have shown these two items below the Profit (loss) from Operation line.
“Had this been done the Corporation's accounts would have shown an operating loss of $54m for 2020,” Mr Chaudhry said.
RUNNING FSC FROM CANADA: Vishnu Mohan is FSC Chairman, directing Fiji's sugar affairs from Canada, and one of the Board Directors is FFP Masi Polo and Donor Ratu Williame Katonivere
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DIGGING SUGAR INDUSTRY TO ITS GRAVEYARD: PENANG SUGAR MILL
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FFP DRIVING FIJI DOWN WRONG ROAD: Just like this wrong road sign!
What went wrong at Queen Elizabeth Drive?
“It is obviously yet another scam. FRA owes the country an explanation. It cannot just abandon the work having wasted $3m on the project." - Fiji Labour Party
Fiji Labour Party condemns the millions of dollars of taxpayers funds wasted on an ambitious Fiji Roads Authority project to upgrade Queen Elizabeth Drive into a four lane carriageway, that has now been abandoned.
FRA had embarked on the $25m, two year project, late in 2019 and expected it to be completed by December 2022.
The design required reclamation works along the sea front to accommodate the new roading system, the construction of a new Nasese Bridge and the raising of the road level by at least a metre from the existing level.
Suddenly, around mid last year, work on the site stopped following some initial works carried on reclamation of the sea near the Nasese Bridge, plus work on the new road.
FRA’s acting chief executive Kamal Prasad said this week the Authority would have spent $3m on the project so far but added it could be more depending on the new plans.
He said the plans were being “re-designed to work within the existing space available” but would include reconstruction of the Nasese Bridge. He gave no reason for abandoning the earlier project.
The work was to be funded under the Suva Arterial Road Upgrading Project but ADB and the World Bank had terminated funding in late 2019 because of the failure to comply with tender requirements.
“They haven’t got the funds to continue,” says Labour Leader Mahendra Chaudhry. He had been critical of the ambitious project all along, He had questioned why funds were being diverted to such fancy schemes when most of Suva’s roads were disintegrating, littered with pot holes and needed urgent maintenance.
“It is obviously yet another scam. FRA owes the country an explanation. It cannot just abandon the work having wasted $3m on the project.
“We need to know who had conceived this pie in the sky dream in the first place? Who should be held responsible now that the project has been abandoned? Why was it given priority when so many of our roads urgently need attention?” Mr Chaudhry asked.
The scheme had been announced by the former chief executive Jonathan Moore. The contract had been awarded to China Railway Group 5. It is not known whether expressions of interest had been called.
Also questionable was the decision to award the construction to China Railway Group 5 considering the shoddy record of performance by the China Railway group of companies ie the section on Kings Road between Wailotua and Nayavu and the stretch from Nakasi to the Rewa Bridge. Contract on the latter was terminated by FRA for non performance.
There has been a questionable lack of transparency and accountability on the project from the beginning. As far as we are aware, the media came to know of the scheme when the residents in the area were called to a meeting with FRA. Some complained they had not been given enough notice of the meeting to prepare for it.
Jonathan Moore had not bothered to explain how the scheme had come into existence or why it was necessary to construct a four-lane carriageway on a road used mostly by Suva residents for a leisurely scenic drive and recreational activity.
Interestingly, work on the project halted around late July, about the same time as it was announced that Moore was leaving at the expiry of his contract in late September.
FRA had embarked on the $25m, two year project, late in 2019 and expected it to be completed by December 2022.
The design required reclamation works along the sea front to accommodate the new roading system, the construction of a new Nasese Bridge and the raising of the road level by at least a metre from the existing level.
Suddenly, around mid last year, work on the site stopped following some initial works carried on reclamation of the sea near the Nasese Bridge, plus work on the new road.
FRA’s acting chief executive Kamal Prasad said this week the Authority would have spent $3m on the project so far but added it could be more depending on the new plans.
He said the plans were being “re-designed to work within the existing space available” but would include reconstruction of the Nasese Bridge. He gave no reason for abandoning the earlier project.
The work was to be funded under the Suva Arterial Road Upgrading Project but ADB and the World Bank had terminated funding in late 2019 because of the failure to comply with tender requirements.
“They haven’t got the funds to continue,” says Labour Leader Mahendra Chaudhry. He had been critical of the ambitious project all along, He had questioned why funds were being diverted to such fancy schemes when most of Suva’s roads were disintegrating, littered with pot holes and needed urgent maintenance.
“It is obviously yet another scam. FRA owes the country an explanation. It cannot just abandon the work having wasted $3m on the project.
“We need to know who had conceived this pie in the sky dream in the first place? Who should be held responsible now that the project has been abandoned? Why was it given priority when so many of our roads urgently need attention?” Mr Chaudhry asked.
The scheme had been announced by the former chief executive Jonathan Moore. The contract had been awarded to China Railway Group 5. It is not known whether expressions of interest had been called.
Also questionable was the decision to award the construction to China Railway Group 5 considering the shoddy record of performance by the China Railway group of companies ie the section on Kings Road between Wailotua and Nayavu and the stretch from Nakasi to the Rewa Bridge. Contract on the latter was terminated by FRA for non performance.
There has been a questionable lack of transparency and accountability on the project from the beginning. As far as we are aware, the media came to know of the scheme when the residents in the area were called to a meeting with FRA. Some complained they had not been given enough notice of the meeting to prepare for it.
Jonathan Moore had not bothered to explain how the scheme had come into existence or why it was necessary to construct a four-lane carriageway on a road used mostly by Suva residents for a leisurely scenic drive and recreational activity.
Interestingly, work on the project halted around late July, about the same time as it was announced that Moore was leaving at the expiry of his contract in late September.
