THE Oilfield Workers Trade Union (OWTU) yesterday said it will address concerns raised about the financial ability of its wholly owned company, Patriotic Energies and Technologies Company Ltd, which has been selected as the preferred bidder to operate the Pointe-a-Pierre refinery.
Concerns have been raised by industry players, as well as by the United National Congress (UNC), about the union’s ability to meet the upfront payment of US$700 million for the refinery assets since the company was only incorporated last December.
There is also an exorbitant cost attached to restarting the refinery which has been down almost one year when the Petrotrin, the former state-owned oil company, shut its doors last November.
The UNC said while it does not object to the sale of the refinery to locals, it was concerned that foreign partners may be associated with the bid.
The party also raised questions about the company's ability to provide finance and expertise and Cabinet’s decision to sell the refinery without undertaking any due diligence on the preferred bidder.
“The Government must explain under what circumstances they have taken a decision to give away a multi-billion dollar industrial asset, without the payment of a single dollar to a company that is less than one year old,” the UNC said in a statement reacting to Friday’s announcement.
Attempts to contact president general of the OWTU and Patriotic’s head Ancel Roget were unsuccessful.
However, in a text message response to questions, trustee Ozzi Warwick said these concerns will be addressed in the coming months.
Warwick said the Patriotic team will now be working, “day and night to ensure that the deliverables outlined by the minister is met.”
Finance Minister Colm Imbert has outlined several terms and conditions which Patriotic must meet within a short time frame.
It has been given one month to present to the evaluation committee a satisfactory and comprehensive work plan on how it intends to complete the process going forward with respect to key deliverables.
Among them, confirmation of its ability to finance the purchase and operation of the refinery, draft sales and purchase agreement and various other commercial agreements inclusive of crude handling, domestic fuel supply, natural gas supply, product off take and transition support.
Congress of the People (COP) leader Carolyn Seepersad-Bachan yesterday said she did not see the company meeting these deadlines and wondered if the second bidder will be considered if Patriotic doesn't met its obligations.
However, she applauded the initiative to reopen and restart the refinery.
“Mainly because it can bolster our fuel security especially for the domestic market and it will contribute to net foreign exchange inflow. A properly efficient and effective refinery can achieve this. More importantly, given the impact on the economy and on the south west peninsula with the closure of this refinery, I will like to see many of the retrenched workers including service providers, employed.”
However, Seepersad-Bachan questioned whether consideration was given to restart the refinery which is going to be a costly exercise as everything will have to be inspected and certified going forward.
“I don’t understand this operation. There is really some hidden agenda here or some gross incompetence. Why did the Government shut down a refinery and one year later, after incurring all the cost to shut it down, keep it idle, because you have to pay security and contractors for this to happen, pay off an exorbitant bill to retrench workers, you bring in another bidder to reopen.”
She said it would have been more prudent to keep the refinery operating until a bidder was found, because the cost to restart may have been a hindrance to potential operators. She also questioned whether the premium markets are still available and whether the expertise and skilled workers are still in the country ready to rebuild the refinery.
“I applaud the initiative and I applaud the OWTU for achieving what they have, but US$700 million, I will like to work that to see how many dollars per barrel have to be provided to meet those payments.”
The moratorium for three years, she said, is to help the company get off the ground as it will not generate cash flow as there will be teething problem at the start up.
“They will be in a negative cash flow for the first couple of years.”
She advised Patriotic to take the recommendations from many consultations paid for by taxpayers to improve the refinery to become efficient and effective.