The To­ba­go House of As­sem­bly can­not law­ful­ly en­ter in­to spe­cial fi­nanc­ing arrange­ments for ma­jor con­struc­tion projects us­ing State fund­ing with­out the per­mis­sion of the Min­is­ter of Fi­nance.

Five Law Lords of the Unit­ed King­dom-based Privy Coun­cil stat­ed the po­si­tion ear­li­er this week as they dis­missed the fi­nal ap­peal over an in­ter­pre­ta­tion law­suit brought by the THA.

The law­suit stems from a Build, Own, Lease, Trans­fer (BOLT) agree­ment signed by the THA in 2011 for a $142 mil­lion Mil­shirv Ad­min­is­tra­tion Com­plex in Shir­van, To­ba­go.

BOLT agree­ments are a form of non-debt-based fi­nanc­ing where a client gives per­mis­sion to a com­pa­ny to use its mon­ey to con­struct a fa­cil­i­ty on their land (client).

The client then re­pays the con­struc­tion costs by en­ter­ing in­to a lease with the com­pa­ny for rent­ing the fa­cil­i­ty for a pre­scribed pe­ri­od.

Up­on the com­ple­tion of the lease, the own­er­ship of the fa­cil­i­ty will be trans­ferred to the client.

Such arrange­ments are used to al­low the client to fund the project us­ing re­cur­rent ex­pen­di­ture rather than an up­front lump sum pay­ment.

A ju­di­cial re­view claim was filed by the At­tor­ney Gen­er­al’s Of­fice af­ter for­mer prime min­is­ter Kam­la Per­sad-Bisses­sar took is­sue with it in the run-up to the 2013 THA elec­tions.

The law­suit was even­tu­al­ly con­vert­ed to a statu­to­ry in­ter­pre­ta­tion claim af­ter the then-Fi­nance Min­is­ter grant­ed retroac­tive ap­proval for the Mil­shirv agree­ment.

In 2014, for­mer High Court Judge and cur­rent Ap­pel­late Judge Ron­nie Boodoos­ingh ruled that the THA did not need Cab­i­net’s ap­proval to en­ter in­to such fi­nanc­ing arrange­ments.

He al­so ruled that BOLT arrange­ments still re­quire a com­pet­i­tive ten­der­ing process un­der the Cen­tral Ten­ders Board (CTB) Act.

In late 2019, the Court of Ap­peal over­turned the de­ci­sion and ruled that ap­proval was nec­es­sary.

In de­ter­min­ing the fi­nal ap­peal, this week, Lords David Lloyd-Jones and An­drew Bur­rows agreed with the find­ings of the Court of Ap­peal af­ter con­sid­er­ing the pro­vi­sions of the THA Act.

They said: “When the leg­isla­tive pro­vi­sions are con­sid­ered in their en­tire­ty, it is clear that they did not em­pow­er the THA to com­mit the State to use of the Fund for such large and long-term li­a­bil­i­ties, un­der a BOLT arrange­ment that is akin to bor­row­ing for cap­i­tal projects, with­out the di­rec­tion or con­trol of the Min­is­ter or Cab­i­net, and ul­ti­mate­ly, Par­lia­ment.”

“In the ab­sence of Cab­i­net or Min­is­te­r­i­al con­sent be­fore such com­mit­ments were en­tered in­to, Par­lia­ment would ef­fec­tive­ly be com­mit­ted to very sig­nif­i­cant fu­ture ex­pen­di­ture in lat­er years of which it was un­aware and over which there would have been no over­sight,” they added.

How­ev­er, they ad­mit­ted that the THA is per­mit­ted to en­ter in­to such an agree­ment pro­vid­ed that such would be fund­ed through grants from in­ter­na­tion­al agen­cies and not the THA’s an­nu­al bud­getary al­lo­ca­tion.

They al­so point­ed to Sec­tion 51 of the leg­is­la­tion, which pro­vides the THA with a lim­it­ed pro­vi­sion for over­draft bor­row­ing and re­quires the min­is­ter’s ap­proval for loans.

They said that a BOLT arrange­ment achieves the same ob­jec­tives of a loan.

“In the Board’s view, a BOLT arrange­ment is akin to a bor­row­ing for cap­i­tal projects and yet cir­cum­vents the re­quire­ment un­der sec­tion 51(b) for the ap­proval of the Min­is­ter,” they added.

The THA was rep­re­sent­ed by John Je­re­mie, SC, and Robert Strang, while Howard Stevens, KC, and Daniel Gold­blatt rep­re­sent­ed the AG’s Of­fice.