An­tho­ny Wil­son

I have used this space on a num­ber of oc­ca­sions to ar­gue in favour of T&T's nat­ur­al gas in­dus­tri­al­i­sa­tion. In my view, the log­ic of us­ing a coun­try's nat­ur­al re­sources in or­der to de­vel­op its hu­man re­sources and im­prove its stan­dard of liv­ing is both ob­vi­ous and in­eluctable.

To a greater or less­er ex­tent, all of the ad­min­is­tra­tions in T&T since In­de­pen­dence – Cham­bers, Robin­son, Man­ning, Pan­day and Man­ning again – have seen the log­ic of us­ing the tax rev­enues from nat­ur­al gas in­dus­tries to build the wealth of the na­tion.

In the 15 years of con­sec­u­tive growth be­tween 1994 and 2008, both the Pan­day and Man­ning ad­min­is­tra­tions used the rev­enues from the lo­cal oil and gas sec­tor to en­sure that the wealth that the coun­try gen­er­at­ed trick­led down to as many peo­ple as pos­si­ble so that the ma­jor­i­ty of the cit­i­zens and res­i­dents of this coun­try got the op­por­tu­ni­ty to par­tic­i­pate in the boom.

Among the pol­i­cy ini­tia­tives tak­en by the 1995 to 2000 Pan­day ad­min­is­tra­tion were the con­struc­tion of in­fra­struc­ture (such as the air­port), the low­er­ing of in­come tax­es and the es­tab­lish­ment of Na­tion­al En­ter­pris­es Ltd (NEL) was one of the few State ini­tia­tives which fa­cil­i­tat­ed the in­vest­ment by cit­i­zens in the nat­ur­al gas boom as it holds shares in nat­ur­al gas liq­ue­fac­tion com­pa­ny At­lantic LNG Train I, the am­mo­nia com­pa­ny Trin­gen and the nat­ur­al gas liq­uids com­pa­ny Phoenix Park Gas Proces­sors.

The es­tab­lish­ment of At­lantic LNG in 1999 meant that the State's rev­enues from the gas sec­tor took a quan­tum leap there­after. The nat­ur­al gas boom of 2004 to 2008 has al­lowed the Man­ning ad­min­is­tra­tion to in­crease pen­sions to al­most keep pace with in­fla­tion, con­struct hous­es that are heav­i­ly sub­sidised by the State, es­tab­lish a new Uni­ver­si­ty, make ter­tiary ed­u­ca­tion "free" up to Phd lev­el in some cas­es, in­vest in two fast fer­ries and main­tain large sub­si­dies on in­ter-is­land trans­port, con­tin­ue the sub­si­dies on gaso­lene as well as the myr­i­ad oth­er ar­eas of so­cial in­ter­ven­tion that the State has been able to af­ford since 1999.

I have tak­en the time to point out what the State – both ad­min­is­tra­tions in the pe­ri­od since 1999 – has been able to do for the peo­ple of this coun­try be­cause there are some peo­ple who would like to ar­gue that in­dus­tri­al­i­sa­tion is a PNM pol­i­cy. It is not.

On No­vem­ber 12, 1998, for­mer Prime Min­is­ter Bas­deo Pan­day de­liv­ered the fea­ture ad­dress at the sign­ing cer­e­mo­ny for a project agree­ment to es­tab­lish an alu­mini­um smelter pro­posed by Norsk Hy­dro, the Nor­we­gian in­dus­tri­al gi­ant. It was ex­pect­ed that this US$2 bil­lion pri­ma­ry alu­mini­um smelter with an even­tu­al in­stalled pro­duc­tion ca­pac­i­ty of 474,000 tonnes per year was sup­posed to have been im­ple­ment­ed in two stages. In his speech, Mr Pan­day who head­ed a Cab­i­net that in­clud­ed for­mer At­tor­ney Gen­er­al, Ramesh Lawrence Ma­haraj, point­ed to a num­ber of at­tempts to es­tab­lish an alu­mini­um smelter in this coun­try, not­ing that "all of these ini­tia­tives failed to ma­te­ri­alise."

In the speech, Mr Pan­day al­so said, "In­deed, we have ex­celled in ar­eas in which pre­vi­ous at­tempts to achieve what is now a re­al­i­ty have failed...mis­er­ably. "There are im­por­tant so­cio-eco­nom­ic bases for the es­tab­lish­ment of a world-scale alu­mini­um smelter in T&T.

"There are abun­dant sup­plies of some of the world's best qual­i­ty baux­ite de­posits in our sis­ter Cari­com na­tions–Ja­maica and Guyana.

"This fac­tor cou­ples with the fact that T&T is blessed with ad­e­quate sup­plies of com­pet­i­tive­ly-priced nat­ur­al gas-based en­er­gy from ex­pe­ri­enced and proven gas sup­ply com­pa­nies, a well-de­vel­oped nat­ur­al gas in­fra­struc­ture and an ex­pe­ri­enced work­force.

"And when these fac­tors are com­bined with the oth­er en­abling fac­tors such as the hos­pitable in­vest­ment cli­mate, a sta­ble gov­ern­ment and po­lit­i­cal sys­tem and the favourable ge­o­graph­i­cal lo­ca­tion of the coun­try at the gate­way to po­ten­tial mar­kets in the Amer­i­c­as and Eu­rope, it is clear why Norsk Hy­dro has se­lect­ed T&T as the lo­ca­tion for its next ma­jor in­vest­ment in alu­mini­um smelter fa­cil­i­ties." "...T&T's 30-year quest to es­tab­lish a lo­cal smelter is fi­nal­ly with­in our grasp as we sign this project agree­ment for the es­tab­lish­ment of an alu­mini­um smelter/pow­er plant.

"This project will pro­vide sus­tain­able em­ploy­ment op­por­tu­ni­ties and fur­ther aid eco­nom­ic de­vel­op­ment in this coun­try.

"It is ex­pect­ed that the plant will di­rect­ly em­ploy over 550 peo­ple in per­ma­nent jobs. Dur­ing the con­struc­tion pe­ri­od, it is es­ti­mat­ed that over 2,500 jobs would al­so be cre­at­ed. "Rel­a­tive to oth­er en­er­gy in­dus­tries in the nat­ur­al gas-based sec­tor, an alu­mini­um project would gen­er­ate sub­stan­tial­ly more high­ly skilled jobs and it promis­es to cre­ate sig­nif­i­cant down­stream op­por­tu­ni­ties. "More­over, apart from its em­ploy­ment gen­er­at­ing po­ten­tial there is, of course, the macro­eco­nom­ic im­pact to be de­rived from pe­tro­le­um prof­its tax­es and roy­al­ties from both the nat­ur­al gas and con­den­sate pro­duced, cor­po­ra­tion tax­es, for­eign ex­change earn­ings and from the down­stream op­por­tu­ni­ties for the lo­cal man­u­fac­tur­ing sec­tor.

"An alu­mini­um smelter would al­so pro­vide the op­por­tu­ni­ty for a sig­nif­i­cant di­ver­si­fi­ca­tion of the in­dus­tri­al base of the coun­try.

"The project agree­ment makes pro­vi­sion for an un­der­tak­ing by Hy­dro to sup­ply alu­mini­um to lo­cal and oth­er in­vestors for the man­u­fac­ture of se­mi-fab­ri­cat­ed and oth­er prod­ucts from alu­mini­um.

"It is en­vis­aged that there will be busi­ness op­por­tu­ni­ties for man­u­fac­tur­ers en­gaged in pro­duc­ing se­mi-fab­ri­cat­ed prod­ucts such as win­dow and door frames and in alu­mini­um cast­ings and forg­ings.

"At this junc­ture, I re­it­er­ate that an in­vest­ment in the es­tab­lish­ment of an alu­mini­um smelter and re­lat­ed fa­cil­i­ties in T&T will be the coun­try's, and pos­si­bly the re­gion's, sin­gle largest cap­i­tal in­vest­ment.

"Over a ten-year pe­ri­od, it is es­ti­mat­ed that di­rect in­vest­ment will be in the or­der of US$2.6 bil­lion for the two train smelter and pow­er plants.

"In ad­di­tion to the mul­ti­pli­er ef­fects in terms of in­di­rect em­ploy­ment cre­ation, this in­vest­ment would fa­cil­i­tate the ex­pan­sion east­wards of the Point Lisas In­dus­tri­al Es­tate, an ex­pan­sion of port and ma­rine in­fra­struc­ture and the in­creased sale of nat­ur­al gas."

"....By the year 2000, T&T will be the lo­ca­tion for an en­vi­able ar­ray of oil, gas and down­stream con­cerns."

There is now an air of cau­tious op­ti­mism that the range and in­ten­si­ty of ac­tiv­i­ty in both the up­stream and down­stream sec­tors of the T&T en­er­gy in­dus­try will bode well for the con­tin­ued suc­cess of the coun­try's in­dus­tri­al­i­sa­tion thrust in a now re­lent­less­ly glob­alised world econ­o­my.

Our pru­dent so­cial and eco­nom­ic poli­cies com­bined with good eco­nom­ic re­sults have gained recog­ni­tion with the in­ter­na­tion­al fi­nan­cial com­mu­ni­ty. The pos­i­tive per­for­mance of our lo­cal econ­o­my and our now sound fi­nan­cial stand­ing have made us quite at­trac­tive as an in­vest­ment lo­ca­tion. All these favourable con­di­tions and pos­i­tive eco­nom­ic de­vel­op­ments have not gone un­recog­nised.

"....In the agree­ment to be signed short­ly, Hy­dro has agreed that they will max­imise the use of lo­cal con­tent in the en­gi­neer­ing, con­struc­tion and pro­cure­ment for this project.

"It is es­ti­mat­ed that some US$160 mil­lion or one bil­lion TT$ of ser­vices and sup­plies would be sourced from lo­cal com­pa­nies.

"Fur­ther, Norsk Hy­dro has com­mit­ted to the spend­ing of up to US$15 mil­lion or $95 mil­lion for in­dus­tri­al train­ing in­clud­ing a pro­vi­sion to the Na­tion­al En­er­gy Skills Cen­tre and for train­ing of per­son­nel for the plant op­er­a­tions and main­te­nance. "Hy­dro has al­so agreed to max­imis­ing the use of the lo­cal fi­nan­cial sec­tor and to al­low for eq­ui­ty par­tic­i­pa­tion of up to ten per cent by lo­cal par­tic­i­pa­tion through the En­er­gy Hold­ings Com­pa­ny Ltd. "The project agree­ment re­quires that Hy­dro will com­ply with the en­vi­ron­men­tal stan­dards as de­ter­mined by the En­vi­ron­men­tal Man­age­ment Agency, and where none ex­ists, to adopt the ap­plic­a­ble World Bank Stan­dard.

"This will en­sure that this in­dus­tri­al fa­cil­i­ty will be con­struct­ed and op­er­at­ed with­in ac­cept­able en­vi­ron­men­tal stan­dards."

In the con­text of the bi-par­ti­san sup­port for alu­mini­um and the di­ver­si­fi­ca­tion of T&T's nat­ur­al gas-led in­dus­tri­al­i­sa­tion, I can­not un­der­stand the at­tempts by a few en­vi­ron­men­tal­ists to protest the cur­rent at­tempt by the Gov­ern­ment to es­tab­lish an alu­mini­um smelter in La Brea and a steel com­plex in Clax­ton Bay.