Should T&T ensure that downstream petrochemical companies receive their full quota of natural gas before any is sent to Atlantic LNG?
You are here
‘Policy by vaps in energy?’
Following is the continuation from yesterday of Opposition leader Dr Keith Rowley’s response to the 2014/15 budget delivered in Parliament on Friday, September 12:
A criticism can be that, as Leader of the Opposition, I am a prophet of doom, but let me present you with some hard facts which I am certain the honourable Minister of Energy will confirm.
(1) Over the past four years, the drop in production of petrochemicals at Point Lisas exceeded four million standard tons.
(2) This loss in production translates to $1.5 billion in loss of revenue to the country.
(3) In more specific terms, the NGC, through its loss of sales of gas, would have experienced a drop of its revenue of over US$600 million.
(4) And, most importantly, the corporation tax paid directly to the Government dropped by almost US$300 million.
Under these circumstances and the recent Ryder Scott Report that shows a drop in the gas reserves, the problem is further compounded. Not only will Trinidad be unable to attract any new gas-intensive industries, but we face a danger that some of the existing plants may be in jeopardy. Is there a crisis? The PNM believes there is.
The PNM has been addressing solutions to the lessening of this crisis and has developed a policy with appropriate strategies that will lead to an improvement in this situation, which is currently taking on disquieting proportions. In the meantime the Government takes its sweet time to develop a gas master-plan for decision-making in a changed environment. Policy by vaps and national games and baby milk make great talking points, but policy by vaps in energy? They go kill we.
PNM energy policy and strategy
The PNM energy policy and strategy will involve:
1) Re-establishing the credibility and the image of our country internationally with special effort focused on such relationships in the USA, UK, Venezuela, Brazil, Germany, China, Saudi Arabia, India and the Caribbean countries.
2) Engagement with both current and potential producers of our hydrocarbon resources.
3) Treating with the problems that now face the companies involved in the petrochemical sector.
4) Identifying the key roles to be assigned to the energy state enterprises, including Petrotrin and NGC, in meeting these challenges and grasping these opportunities. This includes an immediate and comprehensive tripartite (Government/ Petrotrin /labour) audit of Petrotrin from safety to economics. It will also include a review on the role of possible restructuring of NGC/NEC in an anticipation of partnership investment opportunities at home and abroad.
5) Ensuring that the Ministry of Energy and Energy Affairs is once again staffed with experienced and qualified professionals.
6) Revisiting the use of the Union Estate and the marine facilities at La Brea.
7) Preparing development plans for both the southwest and southeast peninsulas from which our oil and gas are produced. This to include an updated review of the 2007 development plan, which exists for the southwest peninsula.
8) Supporting both UWI and UTT, the education and training of personnel to support the energy sector.
9) Reviewing the legislation that governs the petroleum sector with the objective of encouraging the expansion of that sector of each element of the value chain and encouragement of more local content.
We take credit for the fact that Juniper platform can now be built at Labidco. We established Labidco and resuscitated it after political opponents had spitefully shut it down for five years.
Mr Speaker, this country, nationwide, has a huge and growing traffic problem. In fact in some areas the situation has reached gridlock. It is true of side roads, arteries and it is true of the main corridors. In the last budget debate I outlined in detail the PNM’s approach in treating with this issue.
The question still remains—which date, in which year can the population expect this problem to be solved? The problem is getting worse with each arrival of the monthly shipment of motor vehicles. The Government’s solution is the purchase of 100 flying buses. These will escape the traffic.
Today I reiterate the PNM’s position. In 2015 we would immediately invite the IDB to provide a technical review of this issue and report to us on the technical feasibility and economics of a mass transit system. Once the outcome of this review is positive the PNM would build the rapid transit system. We would engage the IDB for long term funding and tie some aspects of the repayment of this concessionary loan to the gradual and sustained reduction in the gas subsidy expenditure.
We view this eventual establishment of this piece of infrastructure as a major economic driver, which, over a five- to seven- year period can change the face of the economic and social justice landscape of T&T and become a welcome legacy to bequeath to the next generation.
The contribution of local content like concrete, steel, technical expertise, labour and finance are just some of the positives associated with any construction of this infrastructure. The millions of man hours lost in traffic and the loss of sleep by the super-early-risers and the opening up of real estate away from the expensive and currently crowded communities are but a few of the overall benefits of this investment initiative.
The PNM will do it as we have boldly done with the purchase of BP, Shell and Texaco: when we established ALNG; when we floated the currency; when we built the Eric Williams Medical Sciences Complex and created FCB and the Unit Trust even as others thought differently at the time. We in the PNM continue to have boundless faith in our destiny as a country and as a people.
When the PNM introduced the Gate programme it was underpinned by a policy which said that the country would invest in the maximum development of the human capital of the nation in such a way that no genuine desire for young people’s self-advancement and willingness to participate in the nation’s economy should be frustrated because of the individual or families’ inability to pay the cost of the associated tuition.
The PNM reaffirms that position today, so Gate remains a flagship legacy and a featured forward-looking policy.
However, after years of operation we are now certain that there is some waste, inefficiencies, sharp practice and misdirection associated with the programme. So as we commit to the continuation of the programme as a major part of the top of the education expenditure, the PNM would immediately conduct a value audit to significantly tighten the operations to ensure sustainability.
The monies spent must deliver the stated objectives of keeping the door wide open to educational opportunities, particularly for the needy, whilst protecting the taxpayer from unnecessary burdens imposed by opportunistic extractions, duplication and inequity.
Commensurate with what we have initiated at the top of the pyramid with respect to Gate and other avenues of expenditure and post-secondary education, which we now say must be subjected to quality and efficiency reviews, the PNM now commits to an immediate major shift in focus to the primary school system.
It is our view that many of the well-known major shortcomings which reveal themselves in the secondary school system have their origins in the primary school system. It therefore follows that if we are to get maximum returns for the continuous large capital outlays which are expended in the secondary and post-secondary levels, then the time has come for major targeted intervention at the primary foundation level of the overall structure.
Experience has been teaching us that the existence of schoolhouses and staff on the payroll do not by themselves guarantee teaching, learning or the moulding of the respectable citizen. We also know that in many of our communities the social stresses of the homes and streets flow into the primary school classrooms, often times branding young innocents as failures even before they get their first chance.
This is where the State now needs to direct attention and additional human and financial resources to prepare a new curriculum to encourage teachers and principals and to engage and insert the local communities into the preparation and nurturing of their children. To this end the PNM would formalise and fund operational links between the social services arm of the State with the local government arm and the Education Ministry in community council arrangements.
What we anticipate would arise out of this approach is effective community involvement with specific responsibilities for child-rearing, accompanied by adequate resources and set targets determined after consultation with the educators and the local beneficiaries whom they are committed to serve.
We will introduce the wider management concepts of school districts and accelerate the placements of school boards to rapidly involve local community personnel with time and expertise to get involved in this plan, in which the Government would lead the way in redirecting the people. This will create an era of hope rather than the despair and helplessness which now pervades our society.
It is our view that we need to break the cycle of supply and frustration which feed the criminal component with what some call a “lost generation” who may increasingly see their portion as an embrace by the gang leader, a fast dollar and a beautiful casket in an early grave.
We as a people can and must do better than that. We must intervene now with a sense of purpose and that sense of urgency in this “Operation Life Boat” aimed at the primary schools for onward transmission to the rest of the education system.
Mr Speaker, permit me a comment on budgeting and sport, a subject very close to the heart of the Minister of Finance. So much has been said before, all bad, that the minister was unsurprisingly silent on his role on this subject. In 2007/2008 at a cost of approximately $10 million per year, the PNM initiated and maintained a programme of support for our promising elite athletes in preparation for the 2008 Olympics and beyond.
The results of this programme were that we soon saw an upsurge in our national participation at the Olympics and other international events. Instead of building on this and the sister Pathway programme, the Government chose to shut down, starve and fight with sporting personalities and bodies.
The Government also shifted focus and, in its search for the elusive crime plan, decided to use sport as a crime-fighting tool. Nothing was inherently wrong with such an idea, but whatever was put in place, this UNC initiative soon became a crime in itself—organised crime.
The real scandal was that the Minister of Finance, through the Sport Company and the Ministry of Sport, secretly funded Life Sport to the tune of approximately $400 million worth of borrowed money for organised crime which is currently engaging a large contingent of the Police Service in one way or the other.
Then he comes to the Parliament to report on budgeting and spending and says not a word about this major budgetary disaster, for which he as paymaster is personally responsible. What is particularly painful about this is that even as all this was going on, the real sporting fraternity has been severely hampered by the insensitivity and neglect with respect to their aspirations, allocations and disbursements.
I want to give the sporting bodies, our athletes, patrons and fans the assurance that from 2015, after the next general election, sanity and decency will return to address our sporting potential and their appropriate well thought out initiatives will be funded for maximum development of our young people at all levels, with particular emphasis on junior development and international standard competitions.
Programmes by vaps such as the hastily announced National Games for elections will not be advanced, but instead, better planning and execution to ensure success will be the yardstick by which all will be measured.
There are three arms of the State: the Judiciary, the Executive and Legislature. MPs are elected to the Legislature to represent their constituents, make laws and to oversee the Executive. If MPs find themselves in the Executive then they have a separate additional function and they are answerable to Parliament. When you provide money to be spent directly or on the say-so of MPs, then the lines become blurred and accountability becomes the first casualty.
An additional layer of supervision is now required or these funds can be spent in a poorly supervised manner, thereby opening the way for unacceptable and corrupt practices of all kinds. This is not only my analysis but the findings of reviews in India and other places where they have had cause to experiment with this variant. Do we need this in the face of our existing structure of local government?
The PNM policy on local government reform, to come into force within the first year of a new administration, begins with the absorption of local government initially into the Ministry of Finance. That is, the abolition of the Ministry of Local Government, as the first part of a wider reform process beginning with the reduction of the size of the Cabinet.
The staff at the Ministry of Local Government will be assigned to a division in the Ministry of Finance which would provide and supervise the allocation of financial and training resources to the 14 corporations, boroughs and cities in Trinidad.
Some of the technical staff and professionals currently in local government could be used to beef up the management capacity of local government units as these bodies assume a greater role in the governance structure of the country. The Ministry of Finance will also be required to operate a general accounting office (GAO) to actively monitor implementation and audit compliance through local authorities for funds provided.
The executive bodies of local government will receive greater autonomy coupled with increased responsibilities which they must now discharge in a new paradigm shift of governance in Trinidad.
The goal is for T&T to become a responsible, self-reliant, and caring society.
We have always known that the PP has no conception of government or governance, no sense of our past as a society, nor any capacity whatsoever to articulate and/or anticipate where it wants to take our society. The PNM is the only party in the living memory of our country that has offered a coherent sense of where it wishes to take our population, articulated in a major document called Vision 2020. It is something we will return to in the not-too-distant future.
However, we confidently expect that a revised and reinvigorated Vision 2030 will put us back along the path of prosperity and progress, beginning in the year 2015.
As we review our situation as a nation, we are confident that there are two things which no honest, objective person can dispute: first, no other party has ever laid out a comprehensive roadmap as to where it wants to take our society within a well-defined period.
Second, and I have said it publicly, no one in this country can honestly say that everything he or she has achieved, has been achieved without the assistance of the programmes the PNM has implemented over its 59 years of its existence and the 45 years that we have governed this society.
But PNM is not about yesterday’s news. PNM is about today’s reality and tomorrow’s dreams. You ask, where do we wish to take the society? In the first instance we can say that the PNM is not committed to a “gimme-gimme” society and is not any “gimmick-to-win-an-election” party. The free-for-all that was manifested in the budget speech that was presented on Monday demonstrates this inherent capacity of our colleagues on the other side to be only concerned with the next election.
The PNM is about the maintenance of a responsible, self-reliant, and caring society where every person can realise his or her destiny. There is a talking point that the PP will create a “Baby Fund” with $500 to help expectant mothers in need.
At first blush this vaps seems to be a generous gesture, but as we examine it more closely we discover the deeply retrograde and irresponsible social engineering that such a programme generates. The Prime Minister says: “We are looking at October 1, once the budget process goes through. We will have to create the criteria. It is not for every single family, it is for those most in need. Within the Ministry of the People we will create the criteria” (Sunday Express, September 7).
This is the level of irresponsibility we hear from the other side. Within four sentences, two vaps, with different variations, repeat themselves: we will create a fund; we will establish the criteria. Such a statement suggests that in making this announcement, the PP did not think through the implications of its ideas.
It is merely something they expect to do without having any sense of how such a proposal can affect the people it purports to serve. Such considerations are not important to the PP. It’s just give away, spend, thief, and the devil take the hindmost.
We in the PNM suggest the devil is always in the details. It is the small aspects in these projects and schemes, often overlooked, which cause enormous problems in the future. What at first appears to be the epitome of caring and benevolence—a baby fund—turns out to be false generosity, a way of acting and thinking that makes the poor poorer and the dispossessed the object of helplessness and dehumanisations.
Such false generosity simply leaves these unfortunate people in a perpetual state of grovelling, crying out, as Oliver Twist did, “Please sir, can I have some more.”
By being self-reliant, we encourage people to have confidence in their own abilities, self-assurance in exercising their own power, and the courage to accept the consequences of their actions. Today, however, I want to argue that we can only move forward if all of our citizens take some responsibility for themselves and get involved more deeply in the political process.
This is where we differentiate ourselves from our colleagues on the other side of the floor. We believe the time has come when we must involve all of our citizens in the process of government even at the lowest rung of our democracy. I refer to what we in the PNM call the governance of our society from the village level up, the starting point in the process of creating a responsible, self-reliant, and caring society.
We see this as a significant shift in the conceptualisation and practice of governance as we transition from what we have today to what we perceive as being the desirable condition of governance for our society.
I would be the first to agree that in our moving from colonialism to independence we did not empower our communities and build on all of the social and cultural capital they had accumulated over the centuries. We had friendly societies, Dr Eric Williams started the Better Village Programme and encouraged village councils to mobilise the various talents in their communities. It was successful to a large degree.
Today we must go farther to involve citizens in their own development through the creation of structures to undergird such development, which is why we, in the PNM, offer our new thrust: the governance of our society from the bottom up.
These structures, the village council or community councils, shall have the right to select their own village officials (the name does not matter) and a guiding council to run and administer these villages. These councils would establish their budgets, decide their priorities, and determine how best to meet the needs of their communities. They would elect their representative periodically, whose function it would be to determine the plans, policies and activities of these entities.
These village or community entities would be closer to the people. They would act as the eyes and the ears of the village. They would initiate cultural, social, and sporting activities, monitor school boards, be involved in community policing, and conduct any activity that was meant to enhance and improve the villages. They would also be responsible for managing their own affairs subject to all the protocols and oversight that accompany such activities.
The PNM does not believe that the persons whom they elect to serve them should always be insulting them with all kinds of gimmicks and giving them a false sense of hope.
This is what the Minister of Finance had to say on a limited liability company called Caroni Green. “The recently-created Caroni Green Ltd. The company has already brought into agricultural production 360 acres of land utilising in the main the two-acre-sized agricultural plots leased from the former employees of Caroni. With more than 290 metric tonnes of produce harvested within the last six months, Caroni Green has been contributing substantially to domestic consumption of quality fresh vegetables.”
Mr Speaker, of all the people in this Parliament, the Minister of Finance best knows about the scandalous position Caroni Green found itself in, to the point that today that company issued letters of termination to the 18 employees, it has no land under cultivation—contract or otherwise—and it has no agricultural production to speak about.
Put simply, Mr Speaker, contrary to what has been said by the minister, Caroni Green went into the red very quickly and remains there today. And the Minister of Finance knows that well.
In fact, Mr Speaker, the troubles for Caroni Green started with a decision to create the limited-liability company and place it under the control of a former senior executive of what remains of Caroni (1975) Ltd.
In October 2013, that senior executive had been at the centre of a $12 million claim filed against his own employer, Caroni Ltd, of which his employer had no knowledge. Were it not for the suspicion of a High Court judge, Mr Speaker, that senior executive may have been the beneficiary of a default judgment against the taxpayers of this country for $12 million.
And, Mr Speaker, instead of the board of directors of Caroni (1975) Ltd dismissing the acting CEO, as it intended to, in October 2013 and reporting the High Court claim as a fraud on the company, it took the unprecedented decision to transfer him to Caroni Green.
In a letter dated October 28, 2013 from the chairman of Caroni (1975) Ltd to the acting CEO of Caroni (1975) Ltd...Mr Speaker, the chairman advises the acting CEO of his transfer to Caroni Green as manager, with all his terms and conditions of employment, including, Mr Speaker, a $40,000 monthly compensation package.
And I say to this Parliament, Mr Speaker, the Minister of Finance knows all about what transpired in Caroni (1975) Ltd, the High Court claim, the grounds for dismissal, and the incredible decision to transfer this employee into a leadership position at Caroni Green.
So, Mr Speaker, what happens next is not surprising. By February 2014, Ernst & Young was already asked by Caroni (1975) Ltd to conduct an audit into the operations of Caroni Green, since Caroni Green had been using the resources of Caroni (1975) Ltd. In May 2014 a draft audit report from Ernst & Young pointed to major financial problems at Caroni Green, conflicts of interest in procurement, a total lack of leadership and direction at the company, and mounting losses.
Now this is no surprise, Mr Speaker. Caroni Green was operating with about 18 employees. Not one, Mr Speaker, was qualified in or had experience in agriculture. This company was supposed to provide high-level technical services to private farmers using Caroni (1975) Ltd’s lands for cultivation. We had, Mr Speaker, IT professionals dealing with farmers’ contracts, making site visits and conducting meetings and negotiations with farmers.
Mr Speaker, in February 2013, Cabinet approved a one-off financial grant of $4 million to Caroni (1975) Ltd to “effect the required land preparation works on 1,800 acres of lands carded for cultivation in Phases 1 and 2 of the Caroni Green initiative”.
Mr Speaker, on December 3, 2013, Caroni (1975) Ltd’s chairman e-mailed the Minister of Finance pointing out that Caroni had spent $7 million on Caroni Green, $3 million more than Cabinet had approved. And on that same day, Mr Speaker, the minister responds by e-mail cautioning that the $4 million approved by Cabinet should not be exceeded.
As it turns out Mr Speaker, by May 2014, Caroni Green had incurred expenditure of more than $11 million, without having met the objectives of Cabinet as set out in that Cabinet minute of February 2013. In the face of that Ernst and Young report, Mr Speaker, and in the face of all that the Minister of Finance knows from beginning to end about Caroni (1975) Ltd and Caroni Green Ltd, on Monday, September 1, 2014, all employees of Caroni Green received termination letters.
And Mr Speaker, contrary to what is stated in the budget statement 2015 regarding Caroni Green, that has been an expensive experiment by this Government that has now cost taxpayers over $30 million without bringing a single benefit to the farmers of this country. Mr Speaker, we have noted with interest and to our utter amazement that the Government, four years after condemnation, is now embracing the much-maligned commercial farm programme initiated under the PNM.
The Minister of Finance and his Government are now proposing that state agricultural leases being distributed for food production can now be freely traded. What is seemingly contemplated is that those 8,000-plus two-acre parcels of land can now be redirected away from agriculture and be traded on the open real-estate market with capital gains—cash going directly to the leaseholder (lessee).
Can the Minister of Finance say what will happen to the clause in the agricultural lease which provides for reversion of the land to the State at the expiration of the lease term? When was this new policy hatched? How long will it take for these lands to be moved out of agricultural production for the benefit and real-estate enrichment of the fortunate few?
Foreign affairs International relations, diplomacy, international finance & trade
Mr Speaker, before the UNC-led administration assumed office, this country was well on its way to being established as the diplomatic capital of the region. It was also well on its way towards the operationalisation of the T&T International Financial Centre (TTIFC) to provide financial services to the region. Arrangements were being ramped up to facilitate these two initiatives.
What did this Government do, Mr Speaker? Very much like the very poor judgement and short-sightedness displayed towards the integrated national-security apparatus established by the previous administration and the laying to waste of the valuable Government Campus Plaza, this Government dismantled or showed very little interest in international relations and the international financial infrastructure.
This Government has been devoid of any developmental vision and did not understand the PNM thrust into the international arena—international relations, international finance and trade.
Mr Speaker, the International Financial Centre deemed “ill-conceived” by the former Finance Minister and shelved by the UNC-led administration in 2010 is seemingly being embraced now that the new Minister of Finance has twice referenced the International Financial Centre and its accompanying foreign direct investments (FDIs) component in his budget. Today the PNM is heartened to have laid that solid, rich foundation upon which an International Financial Centre can now flourish.
Mr Speaker, the next PNM government will ensure that the appropriate environment is provided to facilitate the strengthening and further growth of a robust and sustainable international financial arena, so that T&T can retain its position as the premier international financial centre in the Caribbean.
Our foreign policy and foreign relations must be such that our profile and image within the international community is enhanced. In this way, Mr Speaker, we can promote trade in manufactured goods, services and knowledge, while attracting foreign direct investments (FDIs), With increased FDIs the country’s economy will be further stimulated, generating greater employment opportunities and assisting our diversification programme.
Mr Speaker, upon assumption of office, the next PNM government will immediately pursue arrangements for the restoration of a brilliant image for our Ministry of Foreign Affairs, ensuring that an adequate number of diplomatic and professionally trained foreign-service staff are in place to interact with the diplomatic and international business community at home and abroad.
Our Foreign Ministry must return to its former place of respect and have its staff become proud exemplars of the international and diplomatic community once more. In sum Mr Speaker, the diplomatic as well as the international business community can be assured that the next PNM administration will be conducting the business of state with the highest level of integrity, honesty and decency and expects in return mutual respect in our relationships, as we partner in building a better mother T&T.
I now turn my attention to Tobago, Mr Speaker, and the blatant attempts by the Minister of Finance and the Economy to misrepresent the application of the Dispute Resolution Commission (DRC) recommendation for allocating resources to the Tobago House of Assembly.
You may recall that in my response to the budget last year, I indicated to this honourable House that, in provisioning funds to the assembly, allocations to other government ministries for expenditures in Tobago ought not to be included in the application of the DRC formula.
Regrettably, the Minister of Finance continues to misrepresent the DRC formula and I am beginning to wonder if this is deliberate. It bears repeating that, according to legal opinion of which the minister must be aware, the DRC directives refer only to allocations to the Tobago House of Assembly and not allocations to other government ministries and other agencies operating in Tobago.
The DRC recommendations stipulate that the THA be allocated between 4.03 and 6.9 per cent of the national budget for recurrent and development spending in Tobago.
Therefore, despite the minister’s efforts to leave the impression that his Government was so generous, he has fooled no one, especially the people of Tobago. They know that this government did the assembly no favour. The allocation to the Tobago House of Assembly was just about 4.03 per cent of the national budget, barely what was necessary to avoid a legal challenge.
For fiscal 2015, the THA was allocated only about 16 per cent of its request for development expenditure. This allocation is clearly woefully inadequate and unless the assembly is allowed to explore alternative financing mechanisms, Tobago’s developmental thrust will be seriously compromised and the island’s ability to grow and be part of the national economy will be curtailed.
This is shortsighted because the national objective should be in search of national growth regardless of where it occurs so to stifle Tobago's potential is to reduce our national diversification effort.
The THA requested $40 million for enterprise development but were allocated only $1 million. In addition, to fund development works at Cove through E-IDCOT, the THA requested about $65 million and was only allocated $2 million. This is in a budget of $64 billion. Clearly our priorities are misplaced.
The THA requested about $492 million to continue its efforts to respond to the demand by over 7,000 applicants; they were allocated only $28 million. This allocation obviously cannot do much to address the housing problem in Tobago. Moreover, given the well-known human-resource capacity constraints in Tobago, the assembly requested some $8 million to finance its tertiary education Financial Assistance Programme and they were allocated only $500,000.
Mr Speaker, in his budget statement, the minister signalled his intention to collaborate with the THA on its utilisation of public-private-partnership-type arrangements to finance key infrastructure projects in Tobago. The minister should, in this budget statement give some firm commitment towards the facilitation of the assembly’s objective
User comments posted on this website are the sole views and opinions of the comment writer and are not representative of Guardian Media Limited or its staff.
Guardian Media Limited accepts no liability and will not be held accountable for user comments.
Guardian Media Limited reserves the right to remove, to edit or to censor any comments.
Any content which is considered unsuitable, unlawful or offensive, includes personal details, advertises or promotes products, services or websites or repeats previous comments will be removed.
User profiles registered through fake social media accounts may be deleted without notice.