Prime Minister Dr Keith Rowley is defending the Government’s deal with a Chinese firm once blacklisted by the World Bank for bribery and fraud allegations.
The company, China Harbour Engineering Co Ltd (CHEC), has been retained by the Government for the drydocking facility planned for La Brea. However, while CHEC has been offered 30 per cent equity in the new facility, it is still unclear how much the project will cost the country.
The company has been the subject of negative reports coming out of West Africa, Guinea, Bangladesh and, closer to home, in the Cayman Islands. All the reports highlight bribery, fraud or corruption allegations levelled against CHEC.
Back in June, the New York Times reported that the outgoing Sri Lankan government had signed a billion-dollar deal with the company. But the incoming government struggled to make payments on those debts and was forced to hand over its new port as well as 15,000 acres of land surrounding it.
But Rowley is not concerned that the same thing will happen with the T&T Government’s arrangement.
“How many people do you know or have heard about who had to hand over their house or car to a bank or credit union?” he asked.
“Does that mean that no one should ever enter into a loan arrangement for a house or car? Circumstances and arrangements differ as they exist or are made.
“That is why we assessed our own unique attributes and, additionally, we got the Chinese to not just be a hired contractor to the project, but we negotiated them into the project as equity holders so they share the risk and have an incentive to bring business to the facility from the huge international Chinese merchant marine and other users.”
He said on his visit to China last year he met with the President and Premier “and asked them to encourage Chinese companies to not just be contractors but to make direct foreign investment in the economy of T&T to bring growth and diversification which is what we are after.
“They both agreed that they will support T&T national policy and would encourage their companies to invest ‘in projects which make economic sense,’” Rowley said.
Rowley said the “groundbreaking” La Brea project, which he has promised will provide 5,000 jobs, is only the first of these type of arrangements with foreign governments.
Asked how much the deal will cost, the PM said, “We are currently working towards that.”
Back in 2014, the then United National Congress (UNC) signed a similar deal with the same company for the development of an economic zone, a transshipment port and drydocking facilities. That agreement was pegged at $500 million and was signed by former trade and industry minister Vasant Bharath.
Contacted via text message on the UNC’s arrangement back then, Bharath said, “I don’t know the details (of the current deal) but, in essence, it looks the same drydocking and transshipment facilities. Funding was already approved at two per cent with a five-year moratorium for repayment and designs have already been done and approved.”
But Rowley’s arrangement has one key difference: the CHEC will hold 30 per cent share in the facility.
“So the UNC signed that deal? So it was a state secret? So the Chinese had equity in their deal?” Rowley asked, responding to questions about the similarities in both arrangements.
Rowley added if the deal was the same as the UNC’s then there should be no questions about the cost.
“Since they already signed the deal, they should be able to give you a figure,” he said.
However, he confirmed that no cost has yet been determined on this project.
While there is limited available information on the new deal, the old 2014 deal promised delivery in 36 months after signing. It included construction of a large container and a bulk transfer terminal; deepwater channel excavation, basin dredging, offshore reclamation and terminal land construction; large dry dock construction and an outfitting terminal for shipbuilding and repairing.