Home' Trinidad and Tobago Guardian : January 31st 2016 Contents SBG4 COVER STORY
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt JANUARY 31, 2016
Former minister in the Ministry of Finance, Mar-
iano Brown, is advocating that the current eco-
nomic downturn presents an opportunity for
both the State and private sectors to "regenerate,
retool, revitalise and reinvigorate."
Brown told the GML Enterprise Desk that the economic
downturn or recession may last for as long as five years, but
that, he said, should not scare anyone nor should there be a
rush to short-term quick fixes like privatisation of state enter-
He said the most critical thing at this time is "efficiency
at both the State and the private sector levels." Privatisation
of state enterprises, he said, "would not generate any significant
cash in terms of what is taking place," but the State should
look at whether it needs to be involved in some companies
"like National Flour Mills for example. Is it really necessary
for them to be involved there?"
He is also of the view that the State must look at its involve-
ment in the ambulance service.
"The service is operated by a private company on a state
contract. But the State spends millions of dollars to buy ambu-
lances, so all the contracted provider is doing is providing a
service. When one examines the service, it is like a taxi service.
That ambulance service is a joke."
He said in the United States when an ambulance gets to
a scene, the healthcare delivery begins from the moment the
crew exits the ambulance. In Trinidad, the service simply
"picks up and drops off. Is that efficiency? Does the State
really need to spend money on that?"
He also had questions about the State s continued involve-
ment in the provision of security via the Maintenance, Training
and Security company---the MTS. Brown said when companies
like MTS were set up it was to get around procurement issues.
Today, he said, the State must ask itself whether that is not
more suited to the private sector.
Former Finance Minister Selby Wilson---who served in the
1986 to 1991 administration of the National Alliance for Recon-
struction---said: "Now is the time for the State to do a clinical
review of the state enterprises sector: which companies they
want to keep and which they should dispense with. Which
ones bring value and which do not." He said there are currently
"too many state enterprises and some serve no purpose."
He cited special purpose companies like Education Facilities
Company (EFCL) which, he explained, must be looked at in
the context of the money spent: "Are they useful or profitable?
Should they be closed down? They need to do a proper clinical
analysis and determine whether they are getting value for
Wilson said term after term schools are closed for repairs
and, invariably, the schools reopen and not all the schools are
ready. "Is that efficiency and are we getting value for money?
The State needs to decide."
Wilson, who was replaced as the chairman of the Telecom-
munications Authority last week, said there is no reason why
the state oil company Petrotrin should not operate as if it is
a private company.
"Even TSTT, the level of operation should be such where
they are not dependent on the State. They must have aggressive
management and the ability to fund their own development
instead of depending. They must run their ship in a way they
can go to the capital market and get their own funding."
Wilson recalled that the national airline Caribbean Airlines
Ltd---in its former incarnation of BWIA---was privatised, and
later closed making way for CAL. "BWIA was a yoyo," he said.
"It was supposed to be profitable but, today, it is back to
the same BWIA bind. That has to do with management. It
is good to have a national airline but you need to manage the
airline properly. They are not managing well. The business
model needs to change and that includes looking at the routes
they fly. Do they have the right airlines for the routes.
"If in good times you manage badly, in bad times, it is more
difficult to adjust."
The simple solution, according to Wilson, "Government
should have experts sit back and examine the portfolio of state
enterprises and come up with a clear plan. Look at the purpose
for which they were established and whether they are efficient
or not and take a decision."
If they decide to continue to hold on to them, "they must
take decisions on how to manage them. They must think
outside of the box, but demand improved efficiency and pro-
Brown is also of the view that the State must ask itself:
"what is the value of what you are doing. It is that you need
to retool and refocus." He said the State must do an analysis
and determine whether some of the things they are involved
in are "providing services that no one else can provide." It is
on that basis they "must determine what they should be
Brown described Udecott as one of the country s most suc-
cessful state entities, because "the private sector could not
have built buildings like Udecott did in the timeframe and
with that cost. Udecott is a success story. The private sector
could not do it. That it why it has come under fire from local
The issue, Brown said, comes down to "efficiency, finding
the capacity to do the things that need to be done."
Using the healthcare system as an example, Brown said "the
public system is failing with overcrowding, lack of proper care,
equipment which is not working properly and the misdiagnosis
of critical injuries in some instances."
Brown had a personal experience with a relative involved
in a car accident. He took her to Port-of-Spain General Hospital
where an MRI was done but the machine did not pick up the
fact that her spine was fractured.
It is because of inefficiencies in the health sector that "private
sector healthcare is burgeoning." There are no proper regulatory
systems in place which is why doctors and nurses, employed
in the public health system, are at the private institutions.
Doctors are referring patients they see at the hospitals to their
own private health facilities."
Former Planning Minister in the People s Partnership Gov-
ernment, Mary King, said now is a time to "go back to the
basics, re-strategise and do the things that will help." King
said the Government needs to set out "a clear strategic plan
for the next five years. There must be strategic planning at
a time like this."
King said in his budget presentation, Finance Minister, Colm
Imbert, had indicated that the Government s revenues would
be boosted by asset sales. But, she said, selling state assets
is not the best option "because the proceeds will be totally
inadequate to help in the current situation. We need to be
doing more than selling assets."
She said the Government may want to look at areas where
they can cutback. They may want to raise interest rates and
taxes, some subsidies could be reduced, there are things the
International Monetary Fund (IMF) have told us but we do
not have the political will to do it."
Contacted on the issue, Finance Minister Colm Imbert told
the GML Enterprise Desk: "We have no intention of divesting.
No state enterprise will be divested."
Reminded that in his budget presentation, the minister indi-
cated that revenues raised by increases in the Business Levy
and the Green Fund, the phased introduction of the property
tax regime and the introduction of a tax regime for the gaming
industry, would be supplemented "by a sale of assets programme
and the receipt of extra-ordinary dividends, projected to yield
a further $13.4 billion."
Imbert added that was not a signal that the State planned
to sell assets but that it expected to get some of the projected
revenue from Clico s payback to the State.
No one has clearly stated what is Clico s remaining liability.
A part payment was made in March 2015 when non-assenting
Clico policyholders, along with the Government, were paid
85 per cent of their contracted liabilities from the insurance
company. The proceeds from the sale of Methanol Holdings
(Trinidad) Ltd funded what was described as the first phase
of the three-part Clico resolution.
Clico s assets yet to be sold include: Methanol Holdings Ltd
in Oman, part of the shareholding in Republic Bank, CL world
bonds, Angostura shares, Home Construction Ltd, which are
combined estimated to be worth up to $13 billion.
The assenting Clico policyholders---those who accepted the
State s offer in 2012---are still owed over $2 billion.
(See Page 6)
GML ENTERPRISE DESK
Close state companies
that do not add value
Former Finance Ministers:
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