Loans for state enterprises such as the Petroleum Co of Trinidad and Tobago (Petrotrin) and the Urban Development Corporation of Trinidad and Tobago (Udecott) and other statutory authorities accounted for the single largest component of T&T gross public sector debt stock, according to economist Jwala Rambarran.
He warned that the borrowings of state enterprises and statutory authorities had been estimated at $19 billion in September in an area called contingent liabilities, which was neither disclosed nor transparent for public oversight. Rambarran was speaking at San Juan Business Association's budget review at the Valpark Chinese Restaurant on Thursday night. "You know what contingent liabilities are? Those are the borrowings of the state enterprises and statutory authorities. So the single largest component of our debt is in an area that is not even disclosed where borrowings are done and there is little oversight and transparency," Rambarran said.
"At that level we are still comfortable, if we express that as a per cent of GDP (Gross Domestic Product), but the fact that it is starting to pick up and that is it starting to pick up in an area that is not actively monitored and in an area that does not have no strong financial oversight should raise a red flag immediately and there are other aspects to this debt that are not inside here." In 2005, the contingent liabilities for T&T public sector debt were reported to be $15.6 billion. It has risen by more than 1.2 per cent up to September at $19 billion, which was more than 13 per cent of Trinidad and Tobago's Gross Domestic Product (GDP). According to Rambarran, the statistics failed to reflect two multi-million-dollar loans for Petrotrin.
"I have gone through these numbers and there is a borrowing done by Petrotrin that is not appearing on these budget documents," he said.
"And in August, Petrotrin borrowed close to US$650 million and two years ago they borrowed US$750 million and I am not seeing it reflected anywhere in these numbers. "So all that does it just raises the flag and it tells us that there is a problem and there is to me a serious warning system as it relates to this public debt stock," he said. He emphasised that the public debt stock grew from $35.6 billion in 2005 to $40.5 billion last year. It stood at $48.1 billion up to September.