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FOR THE COUNTRY'S SAKE: REVERSE PETROTRIN DECISION by David Walker

posted by Gerry Kangalee   [ updated ]

David Walker
Sometimes accounting and finance can be so very straightforward. You don’t have to be an expert in accounting or finance to agree with the dire consequences of the government’s explanation of the situation at the Petrotrin refinery.

Regardless of where your sympathies lie, the message is clear. There is a loss of two billion dollars a year as a result of the situation at the refinery and the only way to stop it is to close the refinery, as we have been told. These are the underlying facts and the only sensible outcome is to close the refinery in order, they say, to save this annual drain of two billion dollars that the country cannot afford.

Having spoken to a number of fellow experts and lay persons, that appears to be the understanding across the board. It is said that the facts speak for themselves and that the discussion moving forward urgently, must be about how best to terminate the refinery operations and how to compensate the workers and deal with the inevitable and severe contagion that will follow.

It seems, therefore, that I stand alone with a radically different interpretation of the data that’s been presented.

We’re looking at the relative merits of two courses of action. The first is continuation of refinery operations in some form and the other is the termination of said operations. The basic premise of the argument thus far is that closure would see the end of losses of two billion dollars annually. This interpretation is disastrously wrong. We must first understand that the annual loss of two billion dollars includes interest payments of 1.2 billion dollars according to the latest audited statement.
Whether refinery operations continue or cease will not change that simple fact one iota. We shall continue to pay 1.2 billion in annual interest charges for as long as those loans remain outstanding. That is not affected in any way by a decision about whether or not the refinery operations are terminated.

The extent of the loss that can be affected by the decision about closure is eight hundred million dollars (2 billion total loss minus 1.2 billion interest charges) at best. This is not based on some spurious data or inside information. This is based on the company’s own published figures. Let me put it another way. If the refinery operation were to cease tomorrow, there would still be a loss of 1.2 billion dollars annually as a direct and inescapable consequence of interest payments arising not from operations or manpower costs but from catastrophic decisions made by the board of directors.

But that’s not the end of the misunderstanding about the data. Read carefully and you will observe that the loss of 2 billion dollars is for the entire Petrotrin operations. It is quite likely that the total loss is not generated exclusively by the refinery operations. Of the remaining 800 million dollars unaccounted for by the interest payments, an unknown amount is quite likely attributable to other parts of the business. This will further reduce the financial benefit of closure to the low hundreds of millions annually, a figure that could possibly be addressed by improvements in operations.

We don’t know how much of the remaining loss of 800 million is outside of the refinery because all we have is consolidated data. We need to see disaggregated data i.e. the performance of each area of operations in order to assess how much or how little would be saved by the closure of the refinery. I suspect that losses are spread across the entire operations of Petrotrin for the simple reason that mismanagement and waste surely did not end at the boundaries of the refinery given one all powerful and incompetent board of directors at the helm.

With an understanding of these two irrefutable facts - that the interest payments will continue regardless of the closure and that the refinery is probably not the cause of all residual losses, I have come to the unavoidable conclusion that closure of the refinery, based entirely on the data presented by the government and the company will at best result in only a marginal improvement in the company’s performance, certainly nothing near the 2 billion dollars that is implied in the government’s statements and the consequent understanding of most citizens.

You should add to that narrow financial analysis, the speculation that compensation on closure will cost at least another billion dollars. The government and the company have not given us an estimated figure; something one imagines must have been contemplated and assessed prior to making such a far reaching decision. It would be bad enough if the costs of closure ended there but they do not. Expenses arising directly as a result of closure include substantial decommissioning costs. Add those to the workers’ compensation, ongoing maintenance and insurance and the promised assistance to affected communities to get a more complete picture.

Against this, they propose to send thousands of workers home and devastate an entire region of the country and unleash the most severe dose of financial contagion we have ever seen. I will be collaborating with a colleague to put some flesh on the bones of the expectations for the impact of the closure decision on the multitude of stakeholders and the national economy in the weeks ahead. It is staggering that no firm data has been offered on its impact.

By way of comparison, when speaking about the impending impact of Brexit on its operations, Jaguar’s boss made the following statement -”About a quarter of a million people in the UK rely directly, or indirectly, on the success of his company (Jaguar), Mr Speth said”. When will our business leaders ever reach that level of social responsibility? Do they even gather the data? Do they care? How can such a far reaching decision be made without a reliable estimate of its impact in its many forms?

You now know why I stated earlier that I disagree with both their analysis and their prescription for improvement. They say that their decision is irreversible. Can we accept such a premise when their logic is so demonstrably wrong and will have such dire consequences? My answer is no, what’s yours?

The government can ignore everything I explained above. There may even be valid arguments that they can provide that I am unaware of which they can deploy in defence of their chosen course of action. What I ask is that we hear those arguments, failing which this decision must be reversed for the sake of Petrotrin, its workers, its many stakeholders and the country at large

SHUTTING THE REFINERY CANNOT PAY THE DEBT By Sylvan Wilson

posted 17 Sep 2018, 20:15 by Gerry Kangalee   [ updated 17 Sep 2018, 20:29 ]

Sylvan Wilson
A considerable amount of noise has engulfed Trinidad and Tobago relative to this issue of Petrotrin. Noise! Noise! Noise! Deafening noise!

What we, ordinary people, have failed to do, however, in all this noise, is put things in their proper perspective. An analysis as to why we are here and how we got here is absolutely imperative if we are to make sensible decisions.

What we have are numerous statements purporting to be excerpts of reports from experts but careful reading of the very reports shows heavy political manipulations, all designed to achieve a pre-determined objective.

The story changes according to how the political pendulum swings. In the mid-year budget review everything was rosy including the oil industry. Impsbert said then: “Early estimates are indicative of a growth forecast of 2.0 percent in 2018 and 2.2 percent in 2019, rising to 2.5 percent in 2020. And contrary to the negative commentary of uninformed spokespersons, who speak without having any facts, the turnaround is being driven by economic expansion in both the energy and non-energy sectors.

A few months ago the Board and management of Petrotrin boasted about making a profit then suddenly, out of the blue the refinery has to be shut down.

This is the industry that every citizen of Trinidad and Tobago and many others owe for free education up to the tertiary level, our health care, cheap electricity and water, tens of thousands enjoy affordable housing etc. Yet we are prepared to allow such catastrophic decisions to be made without full and detailed presentation of all the facts followed by national discourse.

Critically, in determining the way forward, one of the things we must identify in coming up with solutions must be what specific problems are they addressing.

For instance, Petrotrin has a particular issue to address in August next year, which is the payment of a debt of US $850 million. A lot of suggestions and all kinds of talks are coming up about the level of the workers’ salaries, sale of the refinery, etc.

If the problem that we are seeking to address is the payment of US $850 million then it means that any actions taken to address that must deal with that. It makes absolutely no sense whatsoever in someone who has arthritis taking very good medication but prescribed for someone who has hypertension. It just simply will not relieve the pains in the joints.

The debt is put up there as one of the burdens that needs to be dealt with. No one has said and no one has even attempted to show how shutting down the refinery pays off the debt. No one has shown how the elimination of monthly overtime costs of the legendary electrician of $70,000 fame and the $22 million for the rest of staff pays the debt.

Image result for dollarsSo, it, therefore, means what could very well happen with that debt is this: come next year August, US $850 million dollars will have to be found. Petrotrin will not be able to go and re-finance that given its current financial state, whether the refinery runs or not. So that debt will end up being taken on by and paid or refinanced by the People of Trinidad and Tobago. One way or the other we will pay the debt, whether we have a refinery or not.

Now, critically, going down that road, if it is that the refinery shuts down, then where are the finances coming from to make whatever payments will become necessary? Will it be from the sale of that same refinery that “can’t make a profit” and/or will it be the sale of our producing fields? And these are the issues that we need to focus on as we walk this walk. What is going to happen to that debt? How is it going to be serviced? That is independent of whether the refinery runs or not.

There are two questions pertinent about survival of the refinery, firstly is it that refining is no longer a viable activity? If the answer is no, then we should be witnessing mass world-wide closures of refineries. In fact, the 200,000 barrels a day former Hovensa refinery in St Croix is being re-started, as is the 235, 000 barrels per day refinery in Aruba. According to the International Energy Agency global oil supply reached a record 100 million barrels per day in August.

If the answer is yes, then the other question is: is there something peculiar about Petrotrin? The answer to that question is YES. This is the reason for all the noise. The chief culprits will be found deep within our so-called political divide. Careful analysis will show in the Petrotrin and other similar issues there is really no divide.

But these decisions that are being made about the shut-down of the refinery, to my mind, quite clearly, are different phases of a particular journey. That journey, that entire journey, is not yet spelt out. But it is well-defined for those who will be effecting and benefitting from this design.

So that when the dust finally settles, what we may very well find is that Trinidad and Tobago is servicing a debt with all of the implications associated with it. Trinidad and Tobago will NOT have a refinery; we may very well have little of our producing fields.

So Trinidad and Tobago, as a country, independent for 56 years, will go back to our colonial days. We’ll own absolutely nothing and our Independence will be characterised by having a National Anthem and a Flag. That is what’s going to happen after 56 years of a journey where we fought for an Independent Trinidad and Tobago and indeed an independent Caribbean.

PETROTRIN IS NOT THE PROBLEM By Eugene A. Reynald

posted 17 Sep 2018, 09:44 by Gerry Kangalee   [ updated 17 Sep 2018, 09:50 ]

Immutable Facts

Petrotrin and all its assets do not belong to the Cabinet or to the OWTU. They are part of the patronage of citizens of T&T and such citizens should by right be made aware of and allowed input to any transactions or decisions concerning Petrotrin. Neither the current PM or the OWTU seem to be aware of this fact and I single out the PM – not Cabinet or Government, because he determines all that Cabinet decides and therefore has to personally accept responsibility for such.


The reason for the current state of Petrotrin lies squarely with a succession of Cabinets. The current PM and some of his senior Cabinet appointees contributed to the decisions that today have created the crisis in Petrotrin for which citizens paid in the past and will now have to pay for well into the future.

David Abdulah gave more than a hint as to what obtains regarding the management of Petrotrin….and indeed all State Owned Companies. He told us that what informed his decision to refuse Rowley’s invitation to sit on the Board of Petrotrin was when Rowley informed him that decisions of the Board had to be in line with “Government Policy” Given the reality of our corrupt and absurd Government/Governance arrangements the latter means that whatever he Rowley says is effectively “Government Policy” and has to be followed by his appointees to State Boards.

The problems we have regarding Government and Governance are not new and given the “nature of our politics” change will not be effected by any Party coming to power if only for the reason that such change will have to significantly diminish the power of the Leader of whichever Party controls the State…and with that will go opportunities for graft and corruption in all its forms. “If wishes were horses beggars would ride” applies to those expecting otherwise.

Petrotrin is symptomatic of a larger problem that afflicts all that Cabinet influences with its “Policy”. In many such areas this influence determines how we live and how we die. With regard to the latter I refer only to the ill fated and now obsolete “National Oncology Centre” which could have prevented an untold number of deaths if it was made operational, as it should have been, more than 12 years ago. It today stands as a 0.3 billion dollar plus incomplete white elephant - mocking the steady running of time, in mute but majestic testimony to a succession of murderous, callous, corrupt and uncaring Prime Minister and Cabinet Members.

There is one business in this country and it trades in the patrimony and assets that belong in equal proportions to all citizens. Our politicians and supposedly independent commentators like Terrence Farrell and Anthony Wilson have argued against this obvious fact. The businessmen and bankers understand it very well and for most of them the game is to court, buy and own influential members of Cabinet or their bag men. The persons who head Companies locally are all about that because it is only via such that their addiction to foreign exchange can be satisfied and their Companies kept afloat.

Solutions

In the long run, electoral politics may bring about the change necessary to effect the ideals many have written about in commenting on the basket case of Petrotrin. But “in the long run” we will also all be dead and we have to consider which will come first.

I cannot see any reason for going along with any decision of the PM. Even if it comes supported by the best of Business Plans at the front end the grim reaper of “Policy” will see to its demise. His record and that of his predecessors - in almost everything they have done, predisposes him to failure. Their failures have survived and have been seen as successes, only because the reality has been masked by secrecy and undisclosed uneconomic costs.

Image result for trinmarThe tragic story of Trinmar is an example of a very profitable Company becoming otherwise because of Cabinet Policies and there are scores of state owned Companies that have suffered the same fate. It would be insanity on our part to try proving Einstein wrong by repeating the same mistake over and over again and expecting that Rowley and his Cabinet will somehow come up with an exception and deliver on a Sonnet. The infinite monkey theory also applies here (Google it).

I support the Unions on this issue as wretched and inept as they are. Their track record is far from laudable and does not recommend them for having any say in structuring or managing organisations that have to operate in the competitive, challenging and corrupt world of business where leadership, business acumen (wheeling and dealing), creativity, organisational skills and where morality and ethics is whatever you can get away with.

They have done little or nothing over the decades with the resources and influence at their disposal and as far as I know they do not even own a single oil service company, a gas station or a tanker to transport fuel locally.

I, however, support them because they have the potential to be a catalyst for a wave of “civil disobedience” and agitation which is what is required for bringing the PM and his Cabinet sycophants to the realisation that they are servants of all the people – not just those they have herded and corralled or for whatever sinister reasons, have become beholden.

The primary solution lies not in hoping against hope for Rowley to bring about the necessary reform of our “Government and Governance” arrangements but in insisting that we get honesty and transparency from him on the details of what he is about regarding Petrotrin and all our affairs generally.

We need to begin by having him prepare a detailed Balance Sheet of Petrotrin and its subsidiaries (one that tells truth and I am betting they don’t have such) to see its state of affairs. For reasons - that can only lie in the realm of the sinister, Rowley and Imbert seem to have an aversion to any form of diligence, transparency and accountability and any deliberations on Petrotrin need to be informed from inception by such It is only then that informed/meaningful analysis, risk evaluation and discussion can take place.

In order to literally kick start Rowley and his appointees in that direction we need to send in dozens if not scores of FOIA Enquiries and pre action protocol letters requesting specific information from the Office of the Prime Minister. Rabble rousing, resting, reflecting and engaging in unproductive discussions with Rowley and his appointees around their “Policy” is wasting time. And the same applies to talking about constitutional reform - when that is not going to come in time to save Petrotrin and the country from the Policies of Rowley or Kamla or whoever is next.

I hope the aforementioned gives some food for thought and more importantly for purposeful action.

The very recent offer to lease the facility made by the OWTU - obviously informed and prepared by an intelligence and a quality
of 
expertise from outside the Union, is one that has a logic and an attraction that at minimum should give Rowley justification to pause and allow its thorough evaluation by industry experts – not those he currently has advising him.

The offer certainly puts the OWTU on the high ground in that it appears to respond to all the concerns expressed by him and his appointees relative to the existing/current financial liabilities of the Company, its ongoing operational losses, limitations to it feed of crude oil, its environmental and maintenance issues, etc. I would also add here the incurable corruption and incompetence of Cabinet.

It of course will also save Cabinet the $1b dollar plus it will have to pay out in the short term in retrenchment and related costs and all of this is not to mention the socio-economic impact that closure of Petrotrin will have on an untold number of persons and their families and there is much more to consider.

The offer as so far expressed has several shortcomings but if these can be overcome by way of a rigorous risk evaluation exercise, an agreement on a fair sharing of these risks and an ongoing R&D plan for the Company’s future, the Plan is one that could be far superior to what has come forth so far from Rowley and is Policy sycophants.

The OWTU offer deserves consideration and I would hope and expect that Roget this time around, would adhere to his recently discovered learning that Petrotrin is a business owned by the people of T&T and that whatever he is planning with whoever should be done transparently, honestly and with that clear understanding.

PETROTRIN IS A NET EARNER OF FOREIGN EXCHANGE

posted 16 Sep 2018, 20:08 by Gerry Kangalee   [ updated 16 Sep 2018, 20:14 ]

Foreign exchange is the most precious commodity in an open economy like Trinidad and Tobago. It is used to pay for imports inclusive of food, medicine, machinery and equipment, spare parts and consultancy service. It is critical for the settlement of international transactions inclusive of the servicing of external debt. It contributes to boosting of our foreign exchange reserves which enables us to stay out of the strangle hold of the International Monetary Fund (IMF).

Contrary to the view of some feature writers in the press, talk show hosts and university lecturers, Petrotrin is a state enterprise which is a leading contributor to foreign exchange. According to a government document published annually entitled ‘State Enterprises Investment Programme’ the foreign exchange of some state enterprises is given for the period 2010-2017.

ENTERPRISES

FOREIGN EXCHANGE in TT $Mn

 

2010

PETROTRIN

$70,701.13

 

NGC

$10,970.6

 

NEL

$0

 

NP

$251.4

SOURCE: STATE ENTERPRISE INVESTMENT PROGRAMME 2012. PAGE 5

2011

PETROTRIN

$28,657.8

 

NGC

$1,962.5

 

NEL

$0

 

NP

$417.5

SOURCE: STATE ENTERPRISE INVESTMENT PROGRAMME 2013. PAGE 5

2012

PETROTRIN

$29,657

 

NGC

$2,847

 

NEL

$0

 

NP

$524

SOURCE: STATE ENTERPRISE INVESTMENT PROGRAMME 2014. PAGE 5

2013

PETROTRIN

$22,963.8

 

NGC

$2,960.9

 

NEL

$0

 

NP

$523.6

SOURCE: STATE ENTERPRISE INVESTMENT PROGRAMME 2015. PAGE 5

2014

PETROTRIN

$19,735.2

 

NGC

$13,186.1

 

NEL

$0

 

NP

$223.1

SOURCE: STATE ENTERPRISE INVESTMENT PROGRAMME 2016. PAGE 5

2015

PETROTRIN

$433.4

 

NGC

$562

 

NEL

$5.2

 

NP

$6.6

SOURCE: STATE ENTERPRISE INVESTMENT PROGRAMME 2017. PAGE 5

2016

PETROTRIN

$3,542.1

 

NGC

$9,080

 

NEL

$0

 

NP

$259.3

SOURCE: STATE ENTERPRISE INVESTMENT PROGRAMME 2018. PAGE 6


It was reported for 2016 that although “The performance of Petrotrin impacted negatively on the overall outturn of the major state Enterprises . . . this entity contributed positively to GORTT’s (i.e. Government of Trinidad and Tobago) earnings of foreign exchange.”

It is abundantly clear that Petrotrin is a net earner of foreign exchange derived from its export of products refined from local plus imported crude. This information shows that Petrotrin makes its annual contribution to Trinidad and Tobago’s foreign exchange reserves – so critical to the purchase of food, medicine, machinery and equipment, spare parts, raw materials, technology products etc.

(LABOUR ADVISORY BUREAU. ECONOMIC ANALYSIS UNIT)

FARRELL’S TABANKA by Ken Howell

posted 15 Sep 2018, 20:48 by Gerry Kangalee   [ updated 15 Sep 2018, 21:01 ]

Dr Terrence Farrell
There was an article in the Trinidad Express on Sunday 9th September 2018, written by Doctor Terrence Farrell, entitled: PETROTRIN EARTHQUAKE ERUPTS. You may recall that the goodly Doctor was the Chairman of the government appointed Economic Advisory Board, from which he recently tendered his resignation. 

It is alleged, that his resignation was precipitated by the indifference demonstrated by the Prime Minister who received two reports from that board without acknowledging their contents by way of comments or studied discussions with the committee. What is certain however is that the goodly Doctor has learned the hard way about the devious nature of these political conmen, confidence tricksters and snake oil salesmen, passing themselves off as politicians with the interest of the people at the centre of their decision making process.

He would have also learned that these conmen make it their favourite pastime to use and abuse professionals and intellectuals of his ilk, whom they would have perceived to be drunk with the wine of their own self-importance.

He opened his discourse by commenting on the position expressed by the various commentators in the print and electronic media on the Petrotrin catastrophe as well as on social media. Some he agreed with and there were those with which he did not. The central thrust of his piece was to imply that the decision of the Chambers administration to buy Texaco in 1985, in order to save jobs, was a bad idea. He did so by referring to an article in the New York Times in which his brother Trevor Farrell, who was also an economist, felt that it would have been cheaper to put the displaced workers on the dole.

Image result for central bank of trinidad and tobagoProceeding from that premise he agrees with the decision to shut down the company, but the decision to do so was taken too late. When he sat on the Vision 20-20 Economic sub-committee, he knew of the problems in Petrotrin; prior to that he was Deputy Governor of the Central Bank. Central Banks are known to have knowledge about all the economic affairs of their respective countries. In addition to which they are well positioned to give financial advice.

He must tell us what advice he gave to the PNM who held the rudder of government for more than thirty years. He certainly cannot claim to not know that it was the stated position of the PNM that it would dispose of state enterprises when it was appropriate to do so. If he knew and did nothing about it then he was fully in agreement with the plan to ensure that Petrotrin fail. So the fact that he is now shouting from the roof-top and shedding tears about rampant corruption as one of the causes of the collapse of the company, is really crocodile tears. ‘

He knew all along that the friends of Dr Rowley are now confident that they can invest in the oil business, since a few of these private sector companies have been involved in one way or the other in the energy sector e.g. Massey.

They all played the waiting game, while they overcharged the company for services rendered, while the management performed the hatchet job from inside. In order to achieve that end, transparency and accountability in the management of the affairs of the company had to be eliminated from the culture of the company. That was necessary in order to allow political patronage to reign supreme. The corruption about which he speaks was the poison which was injected into the daily practice of the company and as a result, every Malcolm, Haniff and Lindsay took their pound of flesh.

This was by design and not by any devious plan hatched by the workers and their union during negotiations around the table. The failure of the company cannot and must not be placed at the feet of the workers and their union. He, like the other goodly Doctor who currently holds the reins of governmental power, in their propaganda blitz is inciting the population to believe that it is the high wages and salaries which the employees of the company earn which has brought the company and the country to this catastrophic place. Hear Doctor Farrell “trade unions love State enterprises because it allows them to suck at the teats while regaining the ability to blame management or government” when things go wrong.

Doctor Farrell has been around long enough to know that all registered collective agreements contain a clause which clearly establishes the right of the management to manage their respective enterprises. In companies where trade unions have recognition rights, the management is provided with a copy of the certificate of recognition on which it is stated the bargaining unit for which the union is certified. That certificate does not charge the union with the responsibility to intervene in matters which clearly fall within the purview of the management.

So when he implies that the union must take responsibility for the corruption that was rampant, he is trying to lay blame where it must not be placed. Maybe he is hurt by the fact that politicians do not have a very high opinion of economists. They see them as tools to be used to achieve a particular end. And it is possible, as he was unfortunate to discover, that one could be working diligently on recommendations which technocrats believe can correct chronic structural problems, when suddenly the political directorate decides to abandon the project. But this is something which he should not have difficulty understanding.

He is an avowed capitalist admirer, one who believes that government has no business intervening in the economy. He strongly believes that government cannot manage business efficiently which should be left to the “private sector”. The financial collapse of 2008 put the lie to that point of view. On the contrary, there is evidence to suggest that what is required is efficient and knowledgeable management which consistently adheres to the principles of transparency and accountability.

Image result for trinidad 1970 demonstrationsAs he is well aware, it was the revolt of the masses in 1970 which placed nationalisation on the national agenda. As a result of which, the PNM government under the leadership of the late Doctor Eric Williams, in the famous “Declaration at Chaguaramas” announced plans to nationalise certain companies.

Dr Farrell will know that the international political climate at the time was favourable to the demand for nationalisation of the commanding heights of the economy. He is also aware, that the status of the local capitalists are a little above that of the suitcase traders. While there is some truth in some of what he said about how we arrived at this sorry pass, he cannot deny that the whole thing was cleverly staged managed. In time we will all learn, in whose interest this treacherous act was committed.

Dr Keith Christopher Rowley was one of the many young men and women who participated in the many marches in 1970 under the banner of the National Joint Action Committee (NJAC). At that time he was not yet a member of the PNM, while misguided young men, such as Louis Lee Sing and Harry Ragoonanan, were already members. So one would assume that the young Rowley knew why he was participating in the marches. What it all boils down to is that he was and is an opportunist of the worst kind. And because he is, he was able to spot elements of his ilk. Could it be that is how he viewed Dr Farrell? If that is true, well, it is sufficient to explain the apparent Tabanka which Dr Farrell seems to have at present.

A BRIDGE TOO FAR by David Walker

posted 13 Sep 2018, 07:48 by Gerry Kangalee   [ updated 13 Sep 2018, 08:22 ]

David Walker
The writing has been on the wall for a while now. Yet we have done nothing to remove it. With each new financial catastrophe that befalls us the writing becomes clearer, more pronounced. Today, it screams out for attention but is ignored by our leaders leaving us the poor citizens no choice but to rise to the occasion and demand necessary remedial action.

A common thread runs through all our financial failures. In the CLICO matter, the regulators, auditors and Cabinet were asleep at the helm, and that is putting it kindly. For Section 34 likewise, Parliament and the entire legal fraternity was asleep at the wheel. At almost every State Controlled Enterprise, those that run those enterprises along with the stewards at the Integrity in Public Life offices and those in charge of the Freedom of Information Act are practically missing in action. They all appear to have been resting and reflecting for a while now.

Wilfred Espinet, the Chairman at Petrotrin put it very succinctly when he said that the greatest problem and hence contribution to that company’s accumulated problems was political interference. I would add that the Olympian standard of incompetence of those same political interferers has had the effect of amplifying the impact of their interference. That is before I consider the malign impact of probable corrupt practices by those same persons. Corruption thrives in the environment that they have created.

The solution ought to be crystal clear. We should be discussing how we go about removing unnecessary political involvement in the executive and management functions of the State in its financial and other functions. Having identified the root cause of these major and recurring problems, our leaders should be charting a course towards its elimination. Instead we get the usual bickering between our two leading parties, a tactic which has also been identified as part of the problem – distraction. Unfailingly, we are fed political distraction as the medicine to cure our ills until further financial failures occur and we repeat the “remedy”.

While we engage in this ritual distraction, our leaders practice their own ritual so as to make matters even worse. They first identify the problem. In the CLICO case for example, it was interlocking directorships and related party transactions. Their remedy then was to appoint Mr. Gerald Yetming to multiple interlocking chairmanships and Ms. Carolyn John to multiple interlocking directorships. Their solution to a hangover is another drink. So they then proceeded on an orgy of related party transactions that would have made the former directors blush. Needless to say, that lies at the heart of the unexplained mountain of costs in that “rescue”.

In the Petrotrin and other similar disasters emanating from political interference, the proposed solutions all come from the very same political interferers who got us into the mess in the first place. Having asked for union input into the process, Petrotrin management and political overseers then proceeded to studiously ignore the plan put forward by the union in response. There wasn’t even a pretence of engagement through meetings. The union plan may or may not have had merit but if political interference is identified as the problem, is not the consideration of a multitude of voices a key element of the solution?

So here we are, deep in the mire at Petrotrin and being fed “same old same old”. Of course, as usual we’re told that our political masters and mistresses are the only ones with the expertise to solve the problem. Time is of the essence they say, so we must trust them to arrive at the best solution with no room for consultation. History tells us that they are likely to fail again, then they start the cycle all over in a few years’ time when someone else may be “in the saddle”.

Image result for trinidad corruption thrives

To rub salt into the wound we have the spectacle of a major project unfolding where they’ve gone beyond political interference. In the Sandals acquisition, there isn’t even a pretence of decision making by a Board of Directors or Committee following any prescribed procedures. In this instance our Prime Minister has simply invented a project for himself, and proceeded without as much as a Request for Proposals or specifications for what the country will get in return. We’re being told that it will cost in the order of five hundred million hard to find US dollars.

For me this is a bridge too far. The time has come to stand for what is right and demand some answers. I am not even suggesting that the project be stopped. My first demand is that it not proceed without the consultations that should be mandatory for such a project. My second demand is that the project follow the rules and procedures set forth in the soon to be proclaimed Procurement legislation. Is it that the obscene haste is meant to ensure that this and other major projects are done and dusted before final proclamation?

To start this citizen led process, I have done a great deal of research into the Sandals experience on other islands and will be sharing that with you at a seminar soon. I have invited Mr. Afra Raymond also to present the results of his research into our own T&T experiences with Hilton, Hyatt and Magdalena hotels. None of this information has been publicly disclosed previously and will illuminate the discussion about the Sandals project in new ways. This will for the first time facilitate the type of discussion and consultation we should be afforded in order to avoid the serial financial disasters that we’ve grown accustomed to.

There has also been a great deal of work done on the probable financial outcome of the project. It includes analysis of the current place in the product life cycle for exclusive resorts. Put another way, are we boarding this boat on the return journey? From there we offer projections and risk assessment for a more professional assessment of the project. 

All of this will be presented at the seminar and will cover issues that should be ventilated in the consultation phase so as to arrive at the best decisions for the nation. Where our politicians fail to engage with us, we can show that informed debate is not just possible, but if done professionally and with sincerity will begin to reverse the seemingly unending procession of expensive failed state projects. 

THE ART OF DECEPTION by Tony Bedassie

posted 8 Sep 2018, 13:28 by Gerry Kangalee   [ updated 8 Sep 2018, 13:49 ]

Tony Bedassie is a Trinmar worker
People will know that something happened; they will just never be able to figure out, what!
To achieve this you throw "Red Herrings" You use figures such as 1700 when in fact it's closer to 5000.

You repeat that figure enough times so that it sticks in people's minds so much that during that same conversation, you indirectly tell them the true figure, but they don't hear it because they are already sold on that 1700.

You quote a figure such as $45 000. This figure is designed to raise eyebrows, to get the public to focus on the people allegedly earning such salaries. That way you create an aura of jealousy from which hatred spawns.

The small man on the street hearing such figures, knowing that he earns that in a year will of course sympathise with you. They'll demand that you cut that salary. You see that same small man knows he has no opportunity to earn anywhere close to that. Rather than focus on his lack of opportunity and ability to achieve such a salary, he would rather focus on trying to take away yours.

Never present actual figures!

You do not need to refer to facts such as audited financial statements. The public by and large cannot properly interpret such figures
WELL PLAYED!

I must admit I admire the execution of this strategy.

1. Create a picture of doom and gloom for the company and the country.

2. Create a hatred and jealousy of the workers by quoting them as high income earners, albeit, using false and misleading figures. Turn public opinion against them.

3. Announce your intention to close it down in order to save it and the country, Put everyone into a panic, send the union crazy trying to come up with counter measures.

4. Come out and make an announcement like this on the heels of the PM's address on Sunday. Show the public that these fellas are ungrateful, they are going to be treated nicely. What are they complaining about? Is money in they ass. You the rest of the country will not be as fortunate as these bunch of ingrates.

5. PM makes a similar announcement on Sunday, labeling workers as being treated graciously and with caring. Whip up public support in your favour and against those ingrates.

6. Let the workers and their representatives scramble like headless chickens trying to come up with a response to deflate what you said. Make them look once more as ingrates.

7. Send them home, rehire some under a new company with significant investment and ownership from your financiers. After all, having paid off workers, you can no longer afford to capital for reinvestment. You now need private capital which can only come from people like Massey, McCal and others.

8. They will now ride in like knights in shining armour, here to save the Industry and the country. Show that workers and their representatives will also be given the opportunity to invest in this new company.

9. Throughout, use the bought and paid for media, controlled by these same financiers, as the mouth piece for all that you are doing.

Well played, well played indeed!
and would be inclined to view anyone divulging them as mischief makers, as people who are using the actual facts for their own purposes. Those figures (actual facts) exchange places with your rhetoric.

In reality though, there are people earning excessive salaries while adding no real value to the barrel of oil: your two managements for example. Yes two! One is loyal to the UNC and the other loyal to the PNM.

Whichever government is in place, they cannot as Espinet rightfully said, get rid of them. All you can do is sideline them for 5 years, placing them in token positions where they twiddle their thumbs until their party returns to the seat of power, all the while earning huge salaries and drawing down on the same benefit plan which the union negotiated for; the same union whom they fight. Amazing isn't it? They still access housing subsidies, medical and dental etc. Try to tell them that those benefits were negotiated for by the workers through struggles and they will just scoff at you. Hypocrisy to the highest degree!
GRowley and Smiley leading the Petrotrin propaganda assault on the country designed to divide working people between unionised and non-unionised workers.

Rhetoric is easy to spew; meaningful debate, easy to avoid. "If she wants to debate me, let her party first win a seat in the Parliament": words of Franklin Khan, Energy Minister. See how easy it is to avoid!

It's really a sad day when we as citizens of the 21st century, the time of information and communication technology, continue to allow ourselves to be hoodwinked and distracted by such foolish statements. Is it that we are too lazy to find out the facts for ourselves? Possibly! What I can tell you is show me an honest politician and I'll show you God's face. Both are as difficult to see.

As it stands, every worker is going to be sent home. Yes all 5000 permanent, temporary and casual. Yet we all know that you cannot just shut down the operations. There must be some level of continuity. You see it's not a parlour. There are many hazards, environmental and otherwise which you must mitigate against.

What are you to do then?
I think we all know the answer to that. You treat with the firing and rehiring as you would with all state enterprises and with all social wage programs. You hire based upon party cards. Ever notice how when government changes hands, so does the Cepep Contractors and their workers. It will be no different with Petrotrin. The only difference is that it will be done on a phased basis.

Thankfully for me, I have my party card. I paid for it…bought it off a guy just yesterday. The only thing is that after paying my $450 for it, I realised that the card was in fact for a party aboard a boat. A "Cruise" as we like to call it.

When I realised that I had been duped by this smooth salesman, I immediately ran to my closet in search of my party jersey. It was at this point that I realised that there too, I had failed. My closet held no jersey of either red or yellow. I asked myself, where could they be and even asked my wife? That woman has a very sharp memory; God alone knows where I would be without her. Her response was instantaneous, "Check in the bucket boy, you forget that we use the red one to wash the car and the yellow one to dry it". Man how foolish of me, I then thought, there goes my chance of ever being rehired.

I expect that a sort of “ethnic” cleansing as I see it is well on the way at a place where I have given 28 years of my life. I doubt I'll be classified as Franklin stated as having the "Right Qualifications" for any new job they might "advertise" while in the background "Offer" to their party faithful. What's left for me now is to see if I'll really pass "Go" and collect my $200.

I have already begun digging the holes too; holes in which I'll bury my cassava sticks which the PM in the early days of his tenure told me I would have to eat. At least in that regard he was honest.

CALL FOR PUBLIC INQUIRY INTO PETROTRIN DECISIONS by David Walker

posted 8 Sep 2018, 07:44 by Gerry Kangalee   [ updated 8 Sep 2018, 08:01 ]

David Walker is a corporate finance consultant. He also writes regularly on matters of the economy in the local media. He can be reached at d.walker@alcindorwalker.com.
We’ve been told that the refinery on which billions have been spent over the last decade or so is to be closed. We’re told that it is losing two billion dollars a year or something in that order of magnitude. If true, then that is clearly not sustainable and the haemorrhaging has to be stopped.

I don’t think anyone would support the continuation of an operation that is costing the nation that much money on an annual basis. This is a company that we expect to be a net contributor to the economy, not a burden, given that it is mandated and lavishly financed to exploit our oil reserves as it sees fit. It should never have gotten to this.

We’ve been told that the genesis of Petrotrin’s problems lie in bad investment decisions and a bloated wage structure. We’ve been told of the exorbitant cost of several failed projects at the refining side of the business. Are there other failed projects elsewhere at the company? We’ve heard of disputed figures about the wage cost. Why can’t we have a breakdown across ranges of pay? That will tell us for example, how much is for senior management, middle management and “blue collar”.

What we do know about wage costs is from this 2016 report in a daily newspaper -

In your submissions there has been a significant escalation in the cost for an item called ‘directors and key managers — remuneration’,” Independent Senator David Small said. “We would just like to get an explanation as to how it virtually tripled from the average, especially at a time of low oil prices. We would like to understand what happened there.” The Committee chairman said from 2006 to 2012, the item averaged between $6 million and $8 million. In 2013, it was $9 million.

In 2014, the item moved to $11 million. But in 2015 it was $29 million.

We need to know the figures for subsequent years.

Most importantly in my view, we’ve heard from Wilfred Espinet, the Chairman that the single greatest cause of the crisis is not the union, but political interference. Not enough attention has been paid to that statement as it points the only way forward and should provide a signpost to who should be held to account for the catastrophe that is about to befall the workers and their dependents. The silence about those who created this problem is deafening.

For those of you who are inclined to see only the union and the workers as the culprit, I wish to remind you of the following:

Who signed off on the disastrous billion dollar Gas to Liquids investment? Not the union but management.
  
Who signed off on the failed billion dollar Ultra Low Sulphur project? Not the union but management. 
 
Who saddled the company with a billion dollar loan at an extortionate 9.75%? Not the union, but management and Cabinet.

Who approved salaries and wages across the company? Not the union, but management.


I could go on but I think you get the point. The malaise rests entirely at the feet of management and the politicians (according to Mr. 
Image result for petrotrin financial reportsEspinet). Yet the usual suspects, some of whom were among the political directorate “in the saddle” try their very best to lay the blame at the feet of the union and the workers and feign anger that workers are upset. Even now, the only sacrifice to be made appears to be directed at workers. Bear in mind that a union’s job is to obtain the best compensation package for the workers it represents. If management failed to negotiate effectively, that’s not the union’s fault but management’s. 

Where is the examination of what really took place? Given that political interference has been identified as the root cause of the problems, why is there not a public enquiry into how and why? What specific steps are being taken to prevent such interference now and in the future? Did senior management fail to discharge their fiduciary responsibilities in their decision making especially at director level? We’re dealing with the avoidable loss of tens of billions of dollars inclusive of possible large scale corruption. Why are we only looking the other way and not holding former directors liable, or even attempting to investigate their actions?

I don’t know how many readers will heed my call but the time is right for a full and public investigation or inquiry into how these catastrophic decisions came to be made.

The fallout from this crisis is going to be severe. There will be contagion i.e. all the other businesses that benefit from contracts at the refinery or provide services to its employees and their families will also suffer. The loss of 2,000 or more well paid jobs and its knock on effect will deal a devastating blow to Pointe-a-Pierre and beyond. That is why the solution to this crisis must be well thought out and sympathetically implemented. We’ve not heard enough about the way forward.

Given the vast expenditure on the refinery in recent years, are we to understand that it now has zero value? How many billions of dollars of investment over the last decade are to be abandoned? We are now being told that the writing has been on the wall for several years, so on what basis was continued large scale investment approved, and by whom?

I return to my earlier statement that the projected annual loss in unsustainable and remedial action is urgently needed. In that scenario the workers must not however be the only or even the first victims of the collapse and closure of the refinery. We, the taxpayers need reassurance that the architects of this financial disaster are made to pay a price commensurate with the scale of their failures, be they directors or Cabinet members.

Their failure is demonstrably worse than in the CLICO saga as CLICO assets did recover value to the tune of more than fifteen billion dollars over time. We’re being told that these at Petrotrin are a complete write off. We should feel more anger and resentment towards the directors and those that interfered politically at Petrotrin than the anger shown towards the former directors of CLICO.

I hereby call for an independent inquiry unlike anything that we’ve done before. This situation is worse than anything we’ve previously encountered and deserves carefully considered treatment. Unfortunately, I’m hearing nothing about the culpability of directors and Cabinet members. I am also disturbed by the fact that this process still has an excess of political leadership or interference since that is at the root of our troubles then that must change if we are to progress.

This disaster is not the fault of the union, or even about the union. This problem can only be fixed by the appointment of the highest quality management, freed from the heavy and expensive hand of political interference. We should only be satisfied if those responsible are held to account and made to pay a price.

David Walker – d.walker@alcindorwalker.com : www.straighttalktt.com

MANAGED FOR FAILURE by Sylvestre McLaren

posted 6 Sep 2018, 10:56 by Gerry Kangalee   [ updated 6 Sep 2018, 10:57 ]

To understand what happened at Petrotrin, we must go back to the 1970s and 1980s through to 1990. 1970 placed nationalisation on the national agenda. Dr Eric Williams was forced to intervene because the mass movement demanded nationalisation. The industrialisation by invitation strategy failed.

This led to a successful campaign by the OWTU calling for the nationalisation of Texaco. The response of the PNM following the

HANSARD: Appropriation Bill (Budget) Monday, September 14, 2009

[DR. ROWLEY]

Mr. Speaker, I want to draw your attention to page 71 of this document to tell you, let us face up to what is happening at Petrotrin. I have heard the union talking about this as a union item and I did not pay a lot of attention to it. 

When I sat down to study the documents I realized what the unions were saying, and we have a big problem here. We entered a gas to liquids project, and this document tells us that the original estimate was $850 million. It has been revised for $1.324 billion, as a result of incomplete engineering at the start, omissions, technical issues and additional testing and project delays.

So if we agree to embark upon a project, I would think that the cost of that project will go into the consideration as to whether in fact we do it or we do not do it. I must tell you, probably the highest paid people in the country are at Petrotrin—high quality skills. 

So I expect good quality estimates and if they do not have it, they hire people to do it. An $850 million project and we are now talking about a revision to $1.324 billion. That is one project. Another project— Ultra Low Sulphur Diesel Plant. Original estimate when the project was embarked upon, $708 million. It has now gone to $2.4 billion. Project administration— original estimate, $192 million. That has now gone to $427 million. Upgrade of the Fuel Catalyst Unit, the estimate there is now up to $2.1 billion. The CCR Platforming Unit, there is not an estimate—$665 million. It is now at $1.592 billion.

The alkylisation plant, was estimated when it was entered upon, at $586 million; it is now $1.8 billion. The offsite and utilities for this whole programme was estimated to be in the order of $189 million in 2004, it is now $1.7 billion. What happened at Petrotrin that the estimates were so wrong, so far out, or worse, what happened that caused us to enter a programme where the total, when we entered the programme, was $3.3 billion, and we took a decision, "Yes, we could afford that, $3.3 billion."? 

Most of those programmes are not anywhere near completion. When we took a decision to go down that road, and it may very well be necessary because we have to go into the correct markets and have better products, we took a decision at a cost, at the time, of $3.3 billion. Today, we are looking at a cost of $9.3 billion. We have to digest that in the context now of, "De money done." We are now talking about raising revenue by taxation, "chirrup" "chirrup", household by household, land and building taxes, cigarette and rum taxes, as revenue raising measures. Do not be fooled by that


nationalisation of that entity was to say to the national community that the government will hold these nationalised entities in trust until such time that it is appropriate to dispose of them. 

PM Chamber repeated that position in 1980. But in order to achieve that end you had to create the conditions and the physical appearance of a state enterprise that fits the profile for privatisation.

That is where you ensure that the entity or entities are managed for failure. That is where Malcolm Jones and his team fit in. That is why the case against him was withdrawn from the Courts. 

So when Dr Rowley stood up in the Parliament in 2009 (see sidebar) and pretended that he was so concerned about the massive cost that the company was incurring as a result of the WGTL and the other construction works that was being undertaken at the time, he was laying down the justification for what he knew he would be doing to fulfil the PNM's long stated position.

PNM never had as its central goal the establishment of a welfare state. It was the mass movement and the mood of international community in support of the ant-imperialist struggle which forced the PNM to begin a process of nationalisation. What they banked on is the fact that the population of today don't know the history and the older ones who are still alive - some or most of us have short memories. So when you play the blame game, the population will buy your story. You see while it is a fact that Petrotrin is in serious trouble, it was put into that position deliberately!

When ANR Robinson decided to outline in his letter to the IMF in 1988 all the steps he was prepared to take to privatise state entities, he did so with the knowledge that it was the stated position of the PNM. 

Therefore he could not understand why Chambers chose only to reduce subsidies instead of following the recommendation of the Euric Bobb Committee. So Rowley is just taking up from where Robinson was forced to abandon the PNM plan.

NEEDED: UNITED FRONT OF WORKERS IN ACTION By Gerry Kangalee

posted 5 Sep 2018, 09:42 by Gerry Kangalee   [ updated 5 Sep 2018, 10:06 ]

Accompanied by his two “trusty” man servants, Impsbert and Smiley, Emperor GRowley
strode into Marabella, the heart of the Oilfields Workers Trade Union; and did so on a PNM platform. Here he was dealing with what is arguably the most important policy shift since the IMF intervention in the NAR days and he was doing so as leader of the PNM and not as leader of the country.

He called out the PNM troops from around the country to fill the Marabella Community centre, giving the impression that he had support, although only a smattering of the attendees was Marabella residents. There was, of course, a heavy police presence that prevented those wearing blue shirts from entering the meeting hall.

The emperor had two objectives. One was to show the country he was strong, by resorting to the old gambit of renting a crowd and the other was to send a message to the “imps” in the PNM who dare to challenge the emperor’s slate in the upcoming party elections that he was a decisive leader and not the incompetent, bumbling idiot they were making him out to be.

So while thousands of people are worrying about their future, the Emperor was using their plight to score political points and show that he could faithfully serve the interests of the one percent.

Ironically, the emperor violated his own injunction contained in his Independence Day message in which he said: “It is in times of difficulty that the urge to retreat to narrow interests and partisan lines can become the strongest. But we must resist this and seek instead an agreeable guidepost.”

This guy can’t be for real. Seems he is just making it up as he goes along. If you do not support the devastation of the Southland you are not a patriot is his mantra; you want to burn down the country. After all, these workers, in the words of the Emperor in his address to the nation on Sunday September 2nd “who are surplus to the requirement of the renewed effort leave the company with an attractive separation package that should be well received and backed up by the assured pension payments to come.”

Now tell me this, terminal benefits for Petrotrin workers are covered by provisions in their collective agreement negotiated by their union and the company, aren’t they. So if there is an “attractive separation package” it has nothing to do with the government ensuring anything, but it would be the legal entitlement of the workers.

Image result for marabella trinidad
Marabella and Pointe A Pierre
The question of “assured pensions” is another story, but suffice it to say that if Petrotrin is shut down, the pension plan has to be wound up which involves a host of complications for retirees and for those who are now in employment. These consequences will be examined at another time.

What about the so-called fenceline communities, you may ask. The emperor intoned “The wider population in these fenceline communities will benefit from some deliberate additional government expenditure on infrastructure and social support...The Company will treat every employee with dignity and provide services such as financial advice and employee-assistance programmes for psychological support”

Additional government expenditure? Social support, financial advice, psychological support? What the hell does that mean for retrenched employees and the thousands of workers, contractors, suppliers and their workers and small business people and their workers who depend on the refinery? It’s like removing a proper roof and promising to replace it with carat leaves.

While GRowley was engaging in his flights of fancy, hundreds of workers were gathered at Paramount Building, OWTU HQ, just five to ten minutes down the road. They were harangued by President General Roget and then sent home to the consternation of those who expected that they would have been advised to attend the Emperor’s meeting. It showed that the leadership of the OWTU was not prepared to allow the workers who are at risk to intervene and have a say in their own business.

Ironically, just hours before, the leadership of the JTUM met at Palms Club and made the expected militant statements about Friday’s Rest and Reflection. The leaders clapped and sang union songs and smiled at and hugged each other assuring us, fools that we are, that they were always united etc. and that even after Fyzabad accord with the UNC, memorandum of understanding with PNM, fake moratorium on retrenchment, memorandum of agreement with Petrotrin Board, trade union leaders still feel they can talk their way out of this growing mess.

It seems that union leaders pretend to believe that they can still influence the outcome by trying to convince the government by the strength of their arguments, when it is quite clear that any change, amendment or reversal of the decisions made can only be influenced by the argument of the workers’ strength.

We are in the midst of a tremendous battle; let us not hide the unvarnished truth. When parties at war meet around the table, the outcome is largely determined by the disposition of troops on the ground. If you are strong on the battlefield you will be in an advantageous position around the table and vice versa. If your troops are not venturing out on the battle field, you bring nothing to the table.

While the hesitancy at the JTUM leadership level is becoming clearer, resistance is building on the ground. Reports from Deep South state that on Sunday evening, contractors came together with workers and the business community to erect black flags along the roadway leading to the Marine Base at Point Fortin

On Monday evening, hundreds of workers and villagers gathered at Cedros to hear an address by representatives of the OWTU concerning the real intent behind the impending closure of the company and the impact which it will have on the workers and the wider community.

Let’s see what happens over the next few days in Plaisance Park, Claxton Bay, St. Margaret’s, Gasparillo, San Fernando, Penal, Barrackpore, La Brea, Santa Flora, Palo Seco and other communities of that type

This Petrotrin affair has gone way beyond being a union matter. It has stoked the fires of class struggle and the survival of tens of thousands of nationals is at stake. While this ongoing trauma unfolds, the one percent are smiling quietly to themselves and blessing their favourite son, Keith, in whom they are well pleased.

Rae Samuel has called for developing a workers united front in action, not of federations, not of maximum leaders, nor of election agendas. I think we should take a serious look at establishing mechanisms to make his call a reality.

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