St Vincent PM wants meeting on fuel subsidy

KINGSTOWN, St Vincent—Prime Minister Dr Ralph Gonsalves says he wants to engage in discussions, not a fight, with Trinidad and Tobago over the fuel subsidy Port-of-Spain provides to its national carrier, Caribbean Airlines (CAL). Gonsalves said he has now received a legal opinion on the matter and is now seeking the talks with the Kamla Persad-Bissessar-led coalition People’s Partnership administration.

Gonsalves contends that the fuel subsidy given to CAL contravenes the treaty governing the Caribbean Community (CARICOM) to which both countries belong. 

St Vincent and the Grenadines, Barbados, Antigua and Barbuda and Dominica are the main shareholders of the regional airline, LIAT, and Gonsalves, who is chair of LIAT shareholder governments, said the legal opinion supports his view that the subsidy contravenes the Revised Treaty of Chaguaramas. LIAT has in the past complained that it is put at a disadvantage because of the fuel subsidy provided to CAL.

“I just want to say that I have received a confidential legal opinion concerning the fuel subsidy that is provided by the government of Trinidad and Tobago so we can have an informed discussion on this. “Not a fight, but to have an informed discussion on this question, where you are having a subsidy being provided for CAL, which we have always said out of the shareholders of LIAT and within the rest of CARICOM, that that subsidy is not in accordance with the multilateral air services agreement on the revised Treaty of Chaguaramas.

“And, my own views on those matters, which I have expressed publicly, have in fact been confirmed by this legal opinion and we have to take this discussion forward,” Gonsalves told a press conference. “As I say, not in any antagonistic manner, but in a cooperative manner with the government of Trinidad and Tobago,” Gonsalves said.

Meanwhile, the regional air carrier intends to seek a long-term commercial loan of US$74.1 million to finance partially the acquisition of five new aircraft at a cost of US$97.2 million, according to the airline’s spokesman, Desmond Brown. The balance of the cost of the aircraft acquisition will come from new equity of US$23.1 million that the airline expects to raise from current and potential new shareholders of Antigua-based, regionally owned airline.

The airline announced last month that it was ordering three 48-seat ATR 42-600s to start replacement of former turboprops. The deal also includes options for two 68-seat ATR 72-600, and is valued at over US$ 100 million. LIAT will take delivery of its first ATR 42-600 in June 2013.

In a statement, the aircraft manufacturer, Toulouse-based ATR said that LIAT would benefit from the very low operating and maintenance costs of the new ATR-600 series aircraft. Commenting on this new contract, LIAT CEO Ian Brunton said: “We are pleased to become a new member of the ATR family and to start operating aircraft which have largely proven their efficiency and performances on the type of routes we propose.  

“The aircraft of our modern fleet will feature the most advanced cabin interiors and standards of comfort, while being extremely respectful of the environment, a matter of considerable concern to us at LIAT.”

CMC