Falling oil prices put the Government in a difficult situation, economist Dr Ronald Ramkissoon said yesterday. Commenting on the decision by OPEC not to reduce output, he said: "An oil economy must
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T&TEC in $2.5b debt
A grim picture of the T&T Electricity Commission (T&TEC) was painted yesterday when it was revealed that the utility owed some $2.5 billion. Members of the commission who appeared before the Public Accounts Committee in Parliament included its deputy chairman Aaron Henry, general manager Kelvin Ramsook and managers of the various units.
The commission said yesterday it would soon be moving to increase electricity rates as it was operating at a loss. The increase would be done in consultatiion with the Regulated Industries Commission (RIC). The committee was chaired by Diego Martin North East MP Colm Imbert. Chairman of T&TEC Sushilla Ramkissoon-Mark was absent.
The issue of debt was raised by Independent Senator Dr Dhanayshar Mahabir, who asked how much was owed to the National Gas Company, how much of that bill was settled on an annual basis and why was there a chronic deficit on the accounts of T&TEC. In response Ramsook said in 2011 there was a settlement of an outstanding balance of $2.1 million. “There was a loan arrangement where the NGC would pay the Government, the Government would send the money to us and we in turn would pay NGC.
“That loan arrangement is over a seven-year period at three per cent interest, effective from 2011,” Ramsook said. He said in 2011 and 2012 the entire NGC bill was paid but in 2013 there was a deficit of $292 million. “The main reason for that is our cashflow situation. Whenever we fall short we hold back in paying NGC,” Ramsook added. He said the company also owed some $665 million to Trinidad Generation Unlimited (TGC).
Questions also arose as to whether, given the cashflow situation, money was held back for plant and equipment. Ramsook said work and maintenance were top priorities and the company did not compromise on equipment, maintenance and major construction work. On whether T&TEC could assure the public it was not operating with outdated equipment, Ramsook said there were processes which looked at maintenance throughout the country.
Imbert then questioned how TGU had allowed T&TEC to owe such an exorbitant sum, given that TGU is a private entity. “Is it just luck on the part of T&TEC?” Imbert asked. Ramsook said in November 2012 he wrote to the line ministry and asked for a government guarantee to be invoked, saying at that time T&TEC was only able to pay some of the money. On whether the Government did in fact step in to pay the debt, Ramsook said: “I know that has not happened yet and I know dialogue is taking place, even up to recently.
“I have received no indication of any intent to hold back on any generation. T&TEC, per se, has not paid anything more than the $21 million of the $22 million for 225 megawatts.” On the underlying factors which resulted in the cashflow problem, Ramsook said the factors of income and revenue must be managed very tightly. He added that the various expenditures over the years would have increased, including generation and labour cost.
“In terms of our income, there could have been no major change over the last couple of years. In 2011, 2012 and 2013 there was no change in income. “The cost of doing business in 2012 did in fact go up, as when we concluded negotiations we would have had to pay more salaries,” Ramsook said. Backpay, he said, amounted to some $100 million.