Last update: 09-Dec-2013 6:42 pm
Monday, December 09, 2013
Trinidad & Tobago Guardian Online
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AG: BAE pays up $US1.4B settlement
Government has finally collected a $1.4 billion cheque from British Aerospace Engineering (BAE) Systems for its victory at an arbitration hearing over the breach of contract to supply three off-shore patrol vessels (OPVs) to the Ministry of National Security. However, the money will still go towards the fight against crime, as it will be handed over to new National Security Minister Gary Griffith for one of his intended programmes.
This was revealed by Attorney General Anand Ramlogan during his contribution to yesterday’s Senate debate on the 2013-2014 national budget. “We have received the cheque from BAE and the Government has put that money to good use,” he said to loud desk-thumping in the chamber. Ramlogan said the money would be used by Griffith for a plan to ensure the country’s maritime boundaries were secured.
Last week, Griffith announced he was looking at a “maritime security lockdown” initiative as one of his crime-fighting tools. He said he would need to purchase a launch patrol vessel and between four and six vessels for the plan. With these smaller and faster vessels, Griffith said he would be able to implement 24-hour patrols in order to lock down the country’s shores from external criminal elements.
Griffith noted that the vessels would operate in tandem with the existing radar system and the helicopters so that at any time there was an alert about any illegal entry of any vessel, the national security forces could respond. Yesterday, however, Ramlogan said the money would not be additional to the $6.4 billion allocation provided to the Security Ministry in the budget.
The payment comes following an arbitration matter that had been settled with UK-based BAE since last November. Ramlogan admitted that the members of the PP Government, when in Opposition, had criticised the OPV agreement.
However, he said, it was a misrepresentation that the Government had cancelled the OPV contract, which was entered into the previous PNM administration, in a willy nilly manner. The AG said all the experts said that three OPVs were too many and the money could be put to better use, adding their objection was based on solid and technical advice. On assuming office, the Government, Ramlogan said, was still committed to honouring the agreement and was making the required payments for the three OPVs.
“The reason that matter landed up in arbitration had nothing to do with the Government pulling the plug willy-nilly or else we would not have been paid $1.4 billion by BAE,” he told legislators. “The reason that was done is because there was a defect in the firing capability of the offshore patrol vessels,” he said. He said the defect was in the first vessel constructed and when the second was constructed the defect in the first was not resolved.
He said he visited the company and sought answers about the defective vessel. The company, he said, could not give any guarantee and encouraged the Government to accept the vessels at a reduced price. He said if the vessels did not have the specific capability there was no point in having the OPVs. The minister said the termination of the contract “was justified and in the interest of T&T and that is why we didn’t have to pay any money. We got $1.4 billion.”
The contract was entered into with BAE Systems in April 2007 for the acquisition of three OPVs at a cost of TT$1.5 billion. The PP Government cancelled the contract by reason of BAE default on September 17, 2010. Among the reasons given for the cancellation were the delays in the delivery of the vessels and technical deficiencies.
In announcing the cancellation of the contract in 2010, Prime Minister Kamla Persad-Bissessar had announced that with a contract of this size and importance, and with major delays then announced in BAE’s delivery obligations and the issues that persisted, it was incumbent that they re-evaluated the contract.
The BAE, the PM had noted then, made proposals that the Government take delivery of the defective vessels despite the fact that the combat system defects would prejudice the operational capabilities of the vessels. She added that though the Government believed in cancelling the contract, it was still exercising contractual rights expressly negotiated and agreed with BAE.
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