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Howai on T&T economy: Govt expects fiscal surplus

Thursday, July 10, 2014
arryl White, managing director of RBC Royal Bank, left, in conversation with Finance Minister Larry Howai at RBC’s Client Cocktails at the Hyatt Regency on Tuesday evening. PHOTO: ANDRE ALEXANDER

Finance Minister Larry Howai said government’s income exceeded its expenditures in the first half of fiscal 2013/2014. “From a fiscal point of view, we had a surplus even though we did have some late payments coming in,” he told reporters at an RBC cocktail event at the Hyatt Regency on Tuesday evening. Howai said challenges may come in the second half of the year but “we’re hopeful though that the fiscal results would be better than last year, and we continue to see the trend of improvement.”



According to Central Bank website data, however, Government’s overall fiscal balance for October 2012 to March 2013 was negative, generating a $1.76 billion deficit. For the period October 2013 to March 2014, another deficit of $338 million was posted. Asked about the planned Phoenix Park Gas Processors Ltd initial public offering (IPO), Howai said the matter has gone back to Cabinet.


“I thought we had dealt with it but some issues came up,” he said. For example, should a cap be placed on how many shares an investor can buy. “Suppose now by putting the cap on, you don’t sell all the shares and then you end up with an issue that isn’t fully subscribed. Some people feel that that’s very unlikely, and probably we could set the cap” in such a way that under-subscription is prevented, he said.


“You see it assumes that everybody will buy, and what if everybody doesn’t buy? So we’re kind of trying to figure out how to deal with some of these things, so that we don’t have a repetition of what occurred in the past,” he said. The minister said it was amazing that the model for the National Enterprises Ltd (NEL) IPO  was used with First Citizens Bank . “NEL went perfectly. There wasn’t any issue but I suppose people were less creative in those days than they are today,” he said.


On the challenged FCB share issue, he said the T&T Securities and Exchange Commission (TTSEC) informed him that  it will take “a couple of months” before the work is done. “When I speak to the Canadian people who are doing the audit, they say this is the length of time these things normally take. 


It’s a lot of data that needs to be pulled together and things don’t always go smoothly. Sometimes when you start to dig, you think the information is there, and then you realize you have to do other things to get it, so that takes some time,” he said. Asked about the CL Financial issue, he said “that is improving day by day.” “The big issue is what decision the arbitrators make, but the shareholders have said they want to hear what the arbitrators say before they sign on the dotted line,” Howai said.


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