Home' Trinidad and Tobago Guardian : February 25th 2016 Contents In 2002, in the first face-to-face inter-
view that former Central Bank Gov-
ernor Ewart Williams did in T&T, he
advised that the basis of T&T s eco-
nomic success was its wage stability
and industrial peace.
"I would really hope for our sake that we
do not reverse this long period of wage stability
and industrial peace that we have had in the
last few years," Williams said, shortly after his
appointment in July 2002.
According to the 2015 Review of the Econ-
omy (appendix 23), Government s expenditure
on wages and salaries increased by 54.4 per
cent between the 2010 and the 2015 fiscal
years from $6.71 billion to $10.36. In the 2015
fiscal year, the Review of the Economy esti-
mates that wages and salaries accounted for
16.76 per cent of the country s total expen-
The 2016 Draft Estimates of Expenditure
indicates that personnel expenditure for all of
the country s public service in the current
fiscal year will amount to $12.66 billion, to
which must be added the $3.11 billion that
the Government estimates it will pay in pen-
sions and gratuities.
If personnel expenditure and pensions and
gratuities are tallied, together those elements
of the 2016 budget comprise 25 per cent of
the $63 billion that Finance Minister Colm
Imbert identified as his expenditure in 2016
during his budget presentation.
Is that expenditure reasonable?
The country s economic context is well
known: an economy that is contracting; facing
chronic shortages of foreign exchange and a
significant decline in revenue as a result of
the sharp reduction in T&T s energy income.
In the context of the difficulty that the Min-
ister of Finance is likely to experience in achiev-
ing his target of an estimated fiscal deficit of
$2.8 billion or an estimated 1.7 per cent of
GDP direct, should Mr Imbert mandate the
Chief Personnel Officer (CPO) who is the Gov-
ernment s main compensation negotiator, to
start negotiations for the new public sector
collective agreements with a wage freeze.
In other words, 0-0-0 for the three-year
period of the agreements.
Would the leaders of T&T s public sector
trade unions accept a wage freeze offer from
the country s largest single employer, which
is the central government?
Would those trade union leaders be con-
vinced by an argument from the CPO that
the Government simply cannot afford to
increase the salaries of public servants, employ-
ees of state enterprises and workers at statutory
Many public servants received 14 per cent
wage increases from the CPO in the last year
of the People s Partnership administration,
when it was quite obvious to all that the state
of the economy meant that those increases
put the country in a dangerous place.
The proof of that is the fact nearly six
months after the change of Government, the
$5 billion owed to members of the protective
services and employees of the regional health
authorities have not received their backpay.
Public Services Association president, Wat-
son Duke, has been admirably restrained in
his understanding of the inability of the Gov-
ernment at this time to issue bonds to settle
the backpay issue.
But it is quite interesting that in his Decem-
ber 28 address to the nation, Prime Minister
Keith Rowley made no mention of public sector
Instead, he instructed his Minister of Finance
to go after the low-hanging fruit in that Mr
Imbert was mandated "to direct the manage-
ment of every state enterprise, statutory body,
ministry and the Tobago House of Assembly
to review their operations and make identifiable
adjustment of 7 per cent reduction in proposed
operating expenses not relating to job cuts at
When Dr Rowley made that speech, he said
that the oil price was US$36 a barrel compared
with the US$45 on which the 2016 budget
was predicated. The price of the Henry Hub
benchmark (one of two benchmarks for T&T s
LNG exports) was about US$1.90/mmbtu at
the end of December compared to
US$2.75/mmbtu that was used in the 2016
Things have got worse since then, which
means even less revenue going into the Excheq-
FEBRUARY 25 • 2016 www.guardian.co.tt BUSINESS GUARDIAN
COMMENTARY | BG3
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Will Imbert impose a wage
freeze in the public sector?
Colm Imbert Minister of Finance
Prime Minister Keith Rowley
Petroleum Engineer Herbert McDonald
Morrison Sukhu, also known as Billy Sukhu,
has been working on getting an oil/tar sands
project off the ground in the south-west
Trinidad, off and on, since 2002.
So, he was little upset when he read com-
ments made by retired technocrat at the Min-
istry of Energy, Helena Inniss, in the Business
Guardian of February 11.
In that story, Inniss had said that the grant
of a licence to mine oil/tar sands in Trinidad
by the Ministry of Energy would be a "national
disaster in the making on a larger scale than
Valencia, where quarrying has created several
moonscapes in the area."
But in written comments and in an inter-
view with the Business Guardian last week,
Sukhu said Inniss s comments demonstrate
a lack of knowledge of modern oil sands pro-
duction and the environmentally friendly
technology that is currently being used.
"She is patently unaware that the proposed
technology involves the removal of deposits
from the ground by excavator, conveyance of
this material to a plant where a heat process
separates 99 per cent of the bitumen from
the sand and the clean sand is returned to
the area for restoration and rehabilitation,
leaving the area in a pristine state, possibly
to be utilised for agricultural production," he
In an interview, Sukhu said the project
would use a heat retorting process, which
does not involve the use of solvents or water
and does not result in tailing ponds. The tech-
nology behind the process was developed in
Alberta, but was purchased in the recent past
by the German industrial giant Thyssen Krupt.
He is proposing to spend US$30 million to
fund socio-economic and environmental stud-
ies of the proposed project, which he referred
to as a fatal flaw study.
He envisages could be located on 7,900
acres of land in the Parrylands, Guapo, Ves-
signy, Antilles area. His proposal is that the
land would be leased from the Government,
in return for which the state would receive
a 15 per cent stake in the project.
The technology is being rolled out in China
and in Jordan, but not in Alberta because
"capital there has been tied up in an older
process," Sukhu said.
If it gets off the ground it would be built
in stages, or trains, like the Atlantic LNG proj-
ect in Point Fortin.
The investment in the project, which
involves converting bitumen into synthetic
crude oil through a hydrotreating process,
could be as much as US$6 billion, which
would result in the production of 90,000
synthetic crude oil a day. A scaled-down ver-
sion of the project would involve an investment
of US$2.5 billion and the production of 30,000
barrels of oil a day.
The original feasibility on the project was
conducted when the price of oil was US$90
a barrel and the project can be economically
feasible even with global crude prices around
US$30 a barrel, said Sukhu.
Give oil sands a chance, says engineer
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