He said Cabinet has reviewed developments in the industry and the Government would fully commit its resources to adjust the plight of the Kwakwani community in the Berbice River, which is now facing a crisis.

Prime Minister Sam Hinds, who has responsibility for the bauxite sector, is to visit Kwakwani today to assess the situation first hand, officials said yesterday.

Luncheon, however, told his regular post-Cabinet news conference that much work would have to be done to resuscitate the initial plan and put it into operation to address the plight of the community and to make available the resources originally planned and intended for that mission.

The American Alcoa company last year decided to pull out from its Berbice operations and under its terms of disengagement from Aroaima, Reynolds International Incorporated (RII), a subsidiary of Alcoa, transferred its 50 per cent interest in the Aroaima Bauxite Company (ABC) to the National Commercial and Industrial Limited (NCIL), for US$1.

The Government last year wanted to impose the Alcoa proposal for the immediate closure of Bermine's Everton Plant and the transfer of its bauxite reserves at Kwakwani to ABC, a plan which was rejected by the main Opposition People's National Congress Reform (PNC/R) nominees on the Joint Bauxite Resuscitation Committee, union leaders and Bermine managers, officials noted.

"...discussions established that what was actually taking place was in many ways the consequence of the actions of those who by their deceit and their abuse of the Government's goodwill and commitment to consensus, had frustrated the administration's original plans," Luncheon stated yesterday.

He explained that it was the People's Progressive Partly/Civic (PPP/C) administration's original plans to have one State presence in the Berbice River exploiting the abandoned bauxite resources, a plan which he said highlighted the Government's intentions about the future role of Aroaima.

That was the plan that the Bermine management and the unions did not embrace and which the PNC/R opposed, he said. "That plan was to prevent the current situation", he told reporters.

The PNC/R earlier in the week reported that Regional Chairman of Region 10 (Upper Demerara/Berbice), Mr. Mortimer Mingo visited the area Sunday and discovered that the operations had been halted and that, as Regional Chairman, the Government had not informed him of the impending disaster.

PNC/R Member of Parliament, Mr. Lance Carberry told a news conference Tuesday that after holding discussions with Chairman of the Kwakwani Neighbourhood Democratic Council, Mr. Edward Mendonza and Bermine Operations Manager at Kwakwani, Mr. Aubrey Bender, Mingo was made aware of problems at the site.

The PNC/R said it was reported that all Bermine contractors to whom the Kwakwani mining operations were contracted had withdrawn their services and equipment from Kwakwani, that all casual employees had been laid off and the remaining work force, estimated at 214, is likely to be terminated shortly without adequate notice, that Bermine pensioners at Kwakwani have not received their pension payments for the past three months and that no one has indicated when and how they will be paid.

It added that the supply of fuel available at Kwakwani can only run its emergency services for a few hours and that consequently the community has been virtually without electricity for many days. The essential services of water supply and the hospital are also severely affected to the extent that it is doubtful whether these can continue to function, the PNC/R said.

The Opposition party accused Mr. Hinds of aiming to destroy the bauxite industry by granting Viceroy Shipping exclusive use of the turning basin in the Berbice River at Crab Island and the mooring facilities located there even though Viceroy is now removing its transhipment station, the Bulk Venturer, from Guyana.

Carberry claimed the Prime Minister Hinds proceeded with this decision, which he said has now caused the collapse of the Kwakwani operations, even though he had been warned before of the devastating consequences for shipment of Metallurgical Grade Bauxite (MAZ) from Bermine.

He said that as a result, Viceroy has notified all third parties that they can only have access to the turning basin if they use Viceroy ships at freight rates dictated by them - rates which the PNC/R said are higher than those that can be negotiated internationally.

"They have been granted a monopoly and have begun to hold Bermine's customers to ransom," he charged.

According to Carberry, consequently Alcoa, Bermine's largest customer for MAZ, has already cancelled one shipment which has cost Bermine a loss of US$600,000 revenue and it seems likely that the remaining three shipments valued at about US$2M for 2002 will also be cancelled.

The customers have notified Bermine that unless the turning basin problem is resolved, they will not be purchasing any product for the rest of the year, he reported. He added that the contracts for 2003 are also in jeopardy and that this has inevitably thrown Bermine into a very damaging cash flow crisis which has caused the closure of its operations at Kwakwani.

He argued that the Government's proposal was rejected by the PNC/R nominees on the Joint Bauxite Resuscitation Committee since it was pointed out that a relatively modest investment to refurbish Bermine's calcining kiln at Everton would enable the company to re-enter the attractive Abrasive Grade Bauxite (AAC) market.

That would have enhanced the viability of Bermine by ensuring a diversified and more profitable product mix - MAZ, Chemical Grade Bauxite (CGB) and AAC - and optimising the use of its bauxite resources, Carberry suggested.

He further accused the Government of undermining Bermine and the bauxite industry in favour of arrangements which it said are designed to underwrite the viability of the foreign companies, BPU Reynolds and Viceroy Shipping.

He said Prime Minister Hinds has authorised the drastic reduction of the price of MAZ and the appointment of Southern Star, the owners of Viceroy Shipping, as ABC's agent for CGB.

But Mr. Hinds Tuesday refuted the PNC/R charges that giving Viceroy a monopoly on the use of the mooring basin has caused the problem with Bermine.

He told a news conference at his office in Georgetown that there were two mooring basins in the Demerara River earlier and that there was never any question that the mooring basin distinct from the dredged channel, was a facility for the operation like any other plant facility.

He said that in the arrangements for the new situation of ABC and particularly in anticipation of not being able to sustain the losses on retaining the transshipment boat in the mooring basin, ABC requested and he provided them with a letter reaffirming and continuing Viceroy's proprietary position with respect to the mooring basin so it would be assured of continued use of this mooring station after the transshipment boat would have departed.

The Prime Minister said Viceroy's position is not unreasonable and that it is acting at its own discretion.

Defending the right of Viceroy Shipping to the loading basin and the mooring facilities, he said that with the removal of the 65,000-tonne silo ship by Viceroy because there was not sufficient ore to justify keeping it, Aroaima and Viceroy Shipping still had to ship some 1.2 million tonnes of bauxite a year.

He said loading the bauxite ships would take twice as long in the absence of the silo ship and that special barges had to be used in loading the ships which had to be equipped with cranes as well.

This, he said, would require careful coordination of the use of the facilities and he could not blame Viceroy for its decision.

Prime Minister Hinds also denied that Viceroy's right to the exclusive use of the loading basin was the cause of Bermine's problems in meeting exportation deadlines and explained that the Alcoa contract with Bermine was predicated on the silo ship still being in place.

He said Viceroy had also informed ABC about the difficulties it would face with the removal of the silo ship, necessitated by the reduced production of ABC from two million tonnes to 1.2 million tonnes.

Mr. Hinds also refuted charges by the PNC/R that the Government is spiteful to the bauxite mining communities because of their political affiliation, noting that there have been several meetings among Government and industry officials in light of the problems.

"I, as Minister responsible, the President and Cabinet have always been conscious of the great challenges facing the employees in the bauxite industry and have been helping as much as we could," the Prime Minister declared.

He described the claims by the PNC/R as unreal, outrageous, misguiding and misleading and said they are distracting all from really facing the fundamental problems of the sector.

He pointed out that the bauxite industry has been facing several problems which it has been grappling with over the years.

He said it is time people "get real about the situation of our bauxite", indicating it was evident from 1975, but had begun even earlier, when products in meeting competition from the newer producing areas had to accept prices that did not cover foreign exchange costs.

According to the Prime Minister, it is against this background from 1979 onwards that the crisis, not only at Bermine, but at the Linden Mining Enterprise (Linmine) and ABC, should be seen - all facing the same difficult challenges of being sustainably profitable.

He said that following meetings with Government officials, the issues raised by Mingo have been addressed and that during the next week or two, working together with Bermine, the options would be considered in detail and a preferred one developed.

"It is time that we Guyanese open our minds to honest, real assessment of our bauxite situation which is essential in our search for sound solutions," Prime Minister Hinds stated. (With reporting by Mark Ramotar)