Minister in the Office of the Attorney General and Legal Affairs, Stuart Young, yesterday raised "red flags" about the Caribbean Gas Chemical Ltd (CGCL) deal initiated under the then People's Partnership government, saying if it had been allowed to go through it would have cost the country billions of dollars in losses.
Stuart also revealed that former attorney general, Garvin Nicholas, was pressured into signing off on the deal on election day, September 7, 2015.
Young made the disclosure in the presence of the acting Prime Minister, Colm Imbert, during the post-Cabinet media briefing at the Office of the Prime Minister, St Clair.
He said all the "red flags" in the deal would be revealed in a ministerial document which would be released when Parliament resumed next month.
In April 2015, Mitsubishi Group (Japan) had signed a deal with National Gas Company (NGC) and Massy Holdings to construct a methanol plant in La Brea, with an investment of TT $1 billion.
Upon assuming office, Young said they were approached by a group of investors asking for the provision of an opinion of the Attorney General in the CGCL deal.
"When we went to find out what happened I discovered cause for concern. When we got to the files at the AG's office, much to our dismay, we found a number of red flag items by the attorneys who had been looking at this transaction," Young said.
He said the People's National Movement decided not to proceed with the deal in its current form.
"What had been agreed upon by the former administration was something that had the potential to expose T&T to billions of (US) dollars in claims.
"One of the things we found when we went back to the records is that on September 7, 2015, which is actually the day of the election, we found that an unusual amount of pressure being put on the technocrats at the Ministry of the Attorney General by the politicians to have a sign-off of the AG's opinion on the day of election," he added.
Young said following their discovery, the Government had a conversation with Massy Group, the government of Japan through its governmental bank, Japan Bank for International Cooperation (JBIC), as well as the Mitsubishi Group. He said he also travelled to Japan for a two-day visit to speak to Mitsubishi and the Japanese government.
Following months of productive negotiations with the institutions, Young said the PNM was able to come up with an amendment to the agreement "that extracted T&T" from those billion dollar claims.
Last week, Young said, officials from the Mitsubishi Group came to T&T to sign the amended agreement.
Imbert, as acting PM, signed a letter of comfort, while Young signed a document that concluded the transaction.
Imbert said although there was pressure to sign the initial deal, no signature was affixed, while the "investors had used their own monies to start the project to do site preparation and other preliminary work. Now that the last two documents have been signed it will allow a release of funds."
With the deal now signed, Young said that had increased the confidence of the Japanese government and Mitsubishi, who now see T&T as a bigger potential market for further investments.
Among the benefits T&T stood to gain from the new deal, Young said, was money from the sale of gas from the plant, while Government was a 20 per cent shareholder in the project.
While the main output of the project was methanol, Young said there would also be associated downstream projects with the generation of 1,000 jobs.
"This will bring employment to the La Brea community," he said.
Nicholas: I didn't sign off
Last night, Nicholas said he did not sign off on the initial agreement "because I did not think it was proper to sign off on any deal on election day."
He said he believed it would have been more appropriate for the incoming government, which ever party was elected into office.
President and CEO of the Massy Group, Gervase Warner, confirmed the amended deal yesterday, saying:
"When we negotiate with whoever the government is at any point in time we would always be trying to negotiate something that makes sense to the country so we would have had those types of conversations with the last government and we would have continued negotiating with them to get to a point where what we had in place was something that we felt was equitable and fair."
Mitsubishi Gas Chemical, Mitsubishi Corporation and Mitsubishi Heavy Industries will own 26.25 per cent, 26.25 per cent and 17.5 per cent interests in the project, while NGC and Massy will have the remaining 20 per cent and 10 per cent stakes respectively.
The proposed project also includes construction of a dimethyl ether plant.
The complex is expected to produce one million tonnes of methanol and 20,000 tonnes of dimethyl ether a year.
Work on the complex is planned to be completed in June 2018.
On August 8, 2016, Imbert, accompanied by Young, Minister of Energy Nicole Olivierre received a Japanese and local delegation for the ceremonial signing of the Amendment Agreement, the Letter of Comfort and the Attorney General's Opinion, related to the project agreement for the establishment of a natural gas to petrochemical complex for the production of methanol and dimethyl ether (DME) at Union Industrial Estate, La Brea.
The establishment of the plant is a collaboration among Japan's Mitsubishi Gas Chemical Company Inc, Mitsubishi Corporation, Mitsubishi Heavy Industries, the NGC and the Massy Group of Companies.