THE Government’s proposed deal to sell the Pointe-a-Pierre refinery to an OWTU company is clearly a case of petty politicking which will end in catastrophe, former trade minister Vasant Bharath told Newsday yesterday.
Last Friday, Finance Minister Colm Imbert said the mothballed refinery will be sold for US$700 million, with a three year moratorium after which the OWTU firm, Patriotic, will have 10 years to make payments.
Bharath said, “I’m very passionate about it because of how much money this country has squandered in the past 50 years in shady deals that the population has had to swallow and it is the citizens who ultimately pay for it.”
He said the most recent issue was the unexplained cancellation of a US$72 million contract between the HDC and the China Gezhouba Group for high-rise public housing. “Even with this Petrotrin the country has had to swallow $13 billion worth of bad deals signed by previous regimes. With the World GTL and Ultra Low Sulphur Project the country has had to swallow it and nobody has been held to account. We’ve just swept it under the carpet and on we go again.”
Bharath’s two concerns were the moratorium and Patriotic’s capability.
Firstly, he said Imbert had said Patriotic was the only bidder with an up front cash offer, namely US$700 million. Bharath said in normal accounting parlance, “up front” means a company is handing over cash at the start, so it was self-contradictory for Imbert to then grant a moratorium. Bharath also said a moratorium as defined can only be granted by a lender of money, which the Government was not, even as they had insinuated the funds would come from elsewhere. “Imbert believes the country is made of complete fools and whatever he says we must take at face value.”
Secondly, Bharath lamented Patriotic’s lack of any track record. “They came to the Government, almost cap in hand. They have no financial statements to present. They have no collateral against which they are making the offer to use as security. They have no cash on any balance sheet because they have no balance sheet, and no audited accounts. They have no due diligence that would have been performed on the organisation. They have no organisational structure to show who are the people who are going to run the organisation."
He said Patriotic doesn't even have a web-site.
“The OWTU has no track record of having done any business endeavour anywhere in the world.”
“So, on what basis are you granting these people a golden handshake, this huge asset, where this country’s energy security now lies in these people’s hands? It makes no sense.”
Bharath predicted TT heading to a catastrophic ending in this matter.
“And what happens then is that the Government walks away from it saying, ‘Well, we made a mistake. We gave them an opportunity. It didn’t work out.’
“But who suffers? Who suffers because this company don’t have the expertise and experience to do any of these things? Who is going to stand up when for example they make a boo-boo because they didn’t bring enough fuel in? And they are not storing enough fuel and the country runs out? Or they can’t get the refinery up and running?
“I suspect one of the incentives they are going to ask the Government for, because they clearly have no money, is funding to start up the refinery.”
He said a newspaper put this cost as US$1.4 billion. “Where’s that money coming from?”
He said the Government is relying on people to ultimately just write it off, as for the Malcolm Jones and World GTL issue.
“A lot of people told me to leave this alone because it’s about the union and people will say you are anti-worker. I am not anti-worker. I’ve absolutely no problem whatsoever with employee participation and sharing profits and endorse this, but to just give away something like this in haste knowing that what’s presented to you doesn’t make sense and doesn’t add up, it is just reckless and irresponsible and is pure politicking.
“I can just imagine Imbert in the background grinning, he’s gotten away with it. It sickens me that we can accept this nonsense in this country.”
Newsday asked how severe is the legal culpability for any lack of due diligence, that is, a check on a company’s financial soundness before contracting with them.
Bharath replied that it is very difficult to prove.
However he said the initial evaluation of 77 bidders had been done by an evaluation committee under Scotia Bank of Houston, Texas, but for the subsequent whittling down of bidders the exercise was taken out of Scotia and handed over to a group of local individuals whom he alleged “knew what they were going to do.” Bharath said the Government is calculating on the deal to win them the 2020 general election, with them ready to pick up the tab if the deal fails. “I’ve never felt so sickened by something. It is just in your face.”