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MANAGED FOR FAILURE by Sylvestre McLaren

posted 6 Sept 2018, 10:56 by Gerry Kangalee   [ updated 6 Sept 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


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.