Hoy has been publishing a series of articles on the decline of the state sugar company, the CEA, as a result of corruption, bad administration, paternalism, political motives and the “padding out” of the pay roll. It mentions the lack of production and blames it on the lack of fertilizer and transportation delays, increases in operational costs, and the onerous financing that has lead to the insolvency of the government institution that made huge profits in the past. Also mentioned is the old technology, the exodus of technicians, the absence of investment in the sugar cane fields and fixed assets.
The newspaper highlights how the CEA has debts of RD$4,960.7 million, is under pressure from its cane and general suppliers as well as the unions, and is not considered credit worthy and ineligible for loans for working capital.
The CEA is also under pressure to begin production this harvest because it has sold 140,000 tonnes of the U.S. preferential market quota in advance, receiving 80% of the sales price, which generated RD$755 million that has already been spent.
To make matters worse, it needs RD$1,506 million to produce the sugar it has already sold. Out of its U.S. sugar quota, it should have shipped 41,123 tonnes between the second week of February and the first of March, but had only dispatched 8,000 tonnes as of 14 February. Its second shipment was due on 11 March for 10,000 tonnes and the third, on the 30 March, for 10,230 tonnes, a total of 28,230 instead of necessary 41,123 tonnes.
The CEA, according to the report, reached its peak in 1976 when it produced 925,990 tonnes of sugar and US$500 million in foreign exchange, contributing 60% of the total hard currency received by the country, By 1995, its production had fallen to 245,150 tonnes, producing less than 8% of the foreign exchange received by the nation.
The state corporation has also accumulated losses of RD$2,684 million. A dramatic illustration of its decline is the fact that a private sugar company, Central Romana, has registered gains of RD$407 million, while the CEA registered RD$627 million in losses in the same period. These figures do not take into account large profits made by the Central Romana in the marketing of imported sugar. Ten years ago, the market share of the CEA was 63%, but by 1995 it had fallen to 43%.
In a second article in the series, the newspaper pointed out how an intricate web of corruption enfolds the CEA and extends its threads into suppliers, businessmen, sugar brokers, politicians and unions that like vultures hover over the institution. It says that corruption takes many paths, such as unauthorized commissions, the recycling of spare parts, the purchase of personal items paid for by the CEA, overvaluing of supplies, collecting of checks, hiring of sugar cane workers, jobs that are paid for and not carried out, and personnel assigned to officers and their families.
Likewise, the allotting of contracts for the repair of mills and dispatches of sugar to politicians or make believe associations, use of equipment outside of the CEA, theft of fertilizer and other goods, even cables and the bronze parts for the railway trains.
The report says that, with the exception of a few administrators, corruption extends from the top management and even beyond the CEA to congressmen, other government officers and the military. It indicates that there is a high government National Palace officer that has an allotment of sugar on credit and at a subsidized price, with three large trucks to transport it, and the drivers, fuel and maintenance paid for by the CEA.
It also mentions how, despite its financial difficulties, the CEA continues to spend freely, including huge sums lent to its officers for their vacations. Furthermore, the newspaper says that it has evidence in its hands regarding the purchase of railway track from Bailey Wood Products for $1,105 million in 1994, a case currently under investigation by the Chamber of Deputies, which has already determined that there were “grave irregularities.”