RADHICA DE SILVA
The Movement for Social Justice (MSJ) has joined Patriotic Energies and Technologies Limited in its call for Finance Minister Colm Imbert to meet to discuss serious misunderstandings concerning the proposed sale of the Pointe-a-Pierre refinery and port.
Speaking at a news conference held at MSJ’s headquarters in San Fernando yesterday, political leader David Abdulah said it was not true that Patriotic was trying to get the refinery for free by asking for US$750 million in fully transferable and tradeable tax credits to be given to financier Credit Suisse.
In exchange, Credit Suisse will provide US$500 million to be paid to Trinidad Petroleum Holdings for the Refinery and Paria.
Rather, Abdulah explained that the US$500 will be used to pay off the existing mortgage on the refinery, port and producing fields which currently stands at US$1 billion.
“Once the US$500 million is paid, the mortgage will drop so the refinery and port will not be mortgaged to current bondholders. Patriotic will have to give a mortgage as a new owner to a company that is putting up money for the refurbishment but that won’t be the country’s mortgage. It will be a private company mortgage in the same way that conglomerates float private bonds,” Abdulah added.
Noting, “the government will lose anything,” Abdulah said a meeting was needed to thrash out the issues.
“A meeting obviously is useful and should have taken place weeks ago. I’m sure if Shell, Bp or BHp had put a proposal for a project on the table, they would not get a public response without prior communication. They are foreigners and would not be treated like that so why you treating nationals like this. There ought to have been a meeting,” Abdulah said.
He noted that companies that are investors always seek to have tax incentives.
“The question arises as to what kinds of tax incentives could be made available to Patriotic. That is why there should be a meeting of the minds. Mr Roget said they have another banker who is willing to put up the entire US$1 billion. That is another arrangement that has to be discussed,” Abdulah said.
He said some people were scared about the refinery going into the hands of the OWTU. This includes the Opposition led by Kamla-Persad Bissessar, he said.
If the government returns to the open market, Abdulah said the offers will be worse.
“The likelihood of getting any new buyer is very slim and the terms and conditions will be much worse than what they started with,” Abdulah said.
Based on the capital investment of upgrading the refinery, Patriotic was entitled to get standard tax policy depreciation allowances, he said.