“LET it not be said that the union did not have the money.”
That was the claim of Oilfields Workers’ Trade Union (OWTU) president general Ancel Roget as he sought to debunk Finance Minister Colm Imbert’s reasons for Government’s third rejection of the proposal by OWTU-owned Patriotic Energies and Technologies Ltd for the acquisition of the former Petrotrin refinery assets.
Speaking at a news conference at the union’s San Fernando headquarters yesterday, Roget said some of the information put in the public domain by Imbert at Thursday’s post-Cabinet press conference on Patriotic’s proposal was misleading.
He said global financial services firm Credit Suisse had indicated clearly that it was committed to putting out US$500 million to have the refinery assets released but Imbert only mentioned that inadvertently when he was questioned by a reporter.
He also did not deny that Trafigura was prepared to invest US$500 million for the refurbishment of the refinery, Roget said.
“Credit Suisse is prepared to pay the US$500 million upfront, which satisfied the condition in his last correspondence dated January 20, 2021. The minister did not say that all Credit Suisse wanted was the Government to issue transferable tax credits. Now, he said that, but he gave another flavour to it, that Credit Suisse will pay on the same day that the Government issues these transferable tax credits,” Roget argued.
He said a tax credit was nothing new to the Government and the Finance Minister, as they are given to multinational corporations making foreign direct investments in Trinidad and Tobago.
A 140 per cent tax credit on expenditure is just one of several incentives listed under the energy sector section of the Ministry of Finance’s “Major Investment Incentives in Trinidad and Tobago” document, he added.
“Multinationals who come to our shores and do investment here in the country enjoy this benefit. Patriotic, a locally-owned entity making a one billion US dollar investment in our country, requesting tax credits similar to what those who when they get it, all of their profits are repatriated outside. Patriotic through its financiers Credit Suisse is saying that this deal can go through if you treat them equal to how you treat the multinationals.
“All we are asking for at this juncture is for that to be transferable. The Minister of Finance gave the impression that the Government will have to fork out some US$700 hard-earned, hard-to-get million to get this deal to go through. That’s erroneous, that is not so,” Roget insisted. “The spin that was put on that is that what they asking for, their proposal will require the Government to put out US$700 million and the Government is not prepared to do that. That is not what is required.”
The other side of the argument
The OWTU leader said just as the Government would sit and discuss with the multinationals who benefited from tax credits under the Petroleum Taxes Act, Patriotic is asking for Government to sit and let the country benefit.
What Imbert did not say about Patriotic’s proposal was that when the tax credit was granted, the Government would immediately receive US$500 million of free cash flow to the State and to Trinidad Petroleum Holdings Ltd (TPHL), Roget said.
“TPHL will be immediately able to retire some US$500 million in debt which attracts an interest rate of ten per cent over six years. That’s a benefit he did not put on the table, perhaps because his team did not examine that, perhaps because they did not have the capacity to do it.
“What he did not say is that as we get those tax credits, from day one, once operations start, Patriotic will be paying on an annual basis US$75 to US$100 million in taxes,” Roget maintained.
He said Imbert should have at least put both sides of the argument on the table and compared what it would be like if Patriotic got a tax credit the way multinationals do.
Roget said, “We are saying because we got that to be able to release the assets to do what we have to do to get it operational, from day one we are going to pay some US$70 to US$100 million based on the profitability our financials would have shown, which translates to TT$5 billion over the seven-year period.”
He claimed that Patriotic’s proposals were not treated with the respect they deserved.
“One billion US dollars coming to your country at a time when it’s needed most, at a time when people are going home every day by the thousands. At a time where there is no new revenue stream to announce, at a time where the only news is crime and cutbacks.
“At that desperate moment in the country, a proposal that comes before a country’s Minister of Finance he don’t analyse it himself, he gave it to the technocrats, he don’t advise himself. And when they come back with advice the nature of which we have just described this morning, there’s no taking a look at that, he accepts that,” Roget said of Imbert.
Dead in the water
Roget said the OWTU was moved to believe there were parallel discussions taking place regarding the sale of the refinery, and the 15-day extension was just for Government to say the union was given an opportunity.
“Those opportunities were dead in the water, especially this one, because as our bankers now come to the table with the money and with a proposal that is workable, a proposal that is feasible, it was dead in the water because as the Honourable Minister said, some of his technocrats advised him, he don’t advise himself,” Roget stated.
He said requests by Credit Suisse and another international financier, UBS, to meet with Imbert and his team were consistently denied.
“We believe our proposal was not fairly examined and it was not fairly treated with but we are willing to allow ourselves to be held to a higher standard than the multinationals, and therefore, that is why our proposal will be more accommodating to Government revenue,” Roget said.
He would not give up, though.
Roget said: “We’re still in the game but we need a new referee.”