Creative chap that he is, Agriculture Secretary Bob Odom is combining two boondoggles into one to make potentially a bigger mess impressive even by Louisiana standards.
When we last left off the saga of the Lacassine sugar mill, essentially paid for by money diverted from boll weevil eradication funds that no expert expects will be run economically, Odom was touting a $60 million sale of the $45 million facility was in the works, while at the same time arranging to guarantee the lending out million of dollars to retrofit the mill to the Lake Charles Cane Cooperative’s limited liability company that was to enter into a lease-purchase agreement of it. At the same time, Odom was looking to find somebody to build an ethanol plant next door, perhaps encouraged by the new state law that could force sales of the product in gasoline at higher prices to consumers.
Turns out he’s found something to go into agreement for 80 percent (of $45 million, not $60 million) and to build the plant for another $50 million – an ex-cement maker from Colombia, Cemento Andino S.A. (note: the company historically has been referred to as “Cemento” or “Cementos,” probably because there are at least two other similarly-named companies in South America). It’s not very “ex-“, as it turns out – only last November did it get out of the business by selling off its assets for $192 million. It appears the firm never has operated a cane syrup mill, much less ever built and/or operated an ethanol plant.
Not to worry, an Odom flunky assures the world, he personally visited with company officials and the engineers they’ve hired and finds them competent. If his boss Odom on this issue didn’t have less credibility than a Katrina “blow-up-the-levees” conspiracy theorist, that might actually mean something.
The kicker to the deal is that the waste product that presumably would come from the mill may not be used in the plant (if it gets built, seeing as one firm with experience in the area already has backed out), or even any Louisiana product. The contract allows the ex-cement maker to import grains to use in the plant – this when Louisiana farmers continue to be nervous about foreign agricultural imports into the state making it harder and harder for them to stay competitive.
Another Odom hack says this provision increases the chances of the mill being profitable (although I thought the original purpose of it was to help out farmers with their transportation costs, not to turn a profit) and that the firm will bring needed expertise to running the mill (even though one might think cane farmers might know something about that) and investment capital for it (even though Odom has arranged for two different loans to go to the farmers’ LLC to provide that capital).
It’s a good thing it appears that no additional state money will go down the rathole on this one, with the only thing continuing to plunge here being Odom’s credibility as a public servant who uses the taxpayers’ resources wisely.
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