Stolen equipment, threats, and demands for large sums of money from contractors are the reasons behind the continuous disruption in routine dredging of the two major rivers that run through the...
You are here
Boards gone rogue
Joint Select Committee (JSC) member Wade Mark yesterday described 39 State-companies which racked up a $44 billion debt as “rogue elements.”
JSC chairman Senator David Small supported this view at a press conference at Tower D, Port-of-Spain, which focused on the borrowing practices of state enterprises and the operations of Caribbean Airlines and the Vehicle Management Corporation of T&T. It came after a JSC report into the State-enterprises unearthed the staggering $44 billion debt.
Small admitted a lot of the state-sector debt was” not officially on the books.” Asked if the $44 billion debt was alarming or worrying, Small said the JSC enquired if the figure was normal, high or low.
“The response we got back along the lines was that $44 billion is probably about the highest it has ever been. From where we sit we are not sure if to be alarmed or otherwise,” Small said.
He agreed with Mark that some State companies have been operating as rogue elements.
“We have chairmen or boards of State enterprises and members of boards that have gone rogue…they are running their own show,” Small said.
Small said the Investments Division, which is charged with monitoring State enterprises, has also been woefully under-resourced. There are 117 State enterprises, of which 47 are State-owned, seven majority-owned and 67 indirectly owned.
Mark said the State-enterprise Government guaranteed debt has a ceiling of $45 billion. He said the committee discovered the State enterprise Government guaranteed debt stood at $19 billion, while the non-Government guaranteed debt accounted for $25 billion, bringing the total figure to $44 billion. He said it was also found that these State enterprises did not use debt to revenue ratios for financial or debt management analysis.
The committee also found debt to equity ratios indicated the level of risk being adopted by an entity to finance growth, and in themselves, did not give an indication of the benefits gained from the debt. It was also unearthed that some of the State entities that borrowed did not have an updated strategic plan. Also many were unable to pay their debt or paid their debt at the expense of their statutory obligations.
“There were instances in the past where funds were borrowed without proper approval and some State enterprises had strayed from its mandate with minimal repercussions mainly because the State Enterprise Performance Monitoring Manual is not legally binding and does not have a penalty structure,” Mark said.
Some of the recommendations put forward were that the Investment Division should implement mechanisms to track returns on investments, to ensure that benefits of debt acquired outweigh the costs and the Finance Ministry should have an up-to-date strategic plan when processing loan applications of State enterprises. It was also agreed that if the State entities violate the rules they must pay a penalty, Mark said.
Stating that T&T was inching to a total debt of $100 billion, Mark said, “When I calculate that, $70,000 has to be found by every man, woman and child to meet this obligation.”
Asked which State enterprise was most worrying with its debt ratio, Small pinpointed Petrotrin, which he said required special attention for it to be fixed. He was unable to say which State enterprise was unable to pay its debt , but assured the committee will not sit as casual observers ad force the entities to take action or return to the JSC to give an account of taxpayers’ money.
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.