We must con­grat­u­late the OW­TU on its sub­mis­sion of the win­ning bid for the pur­chase of the Point-a-Pierre re­fin­ery at a cost of some US$700 mil­lion.

This is, of course, con­tin­gent up­on the new com­pa­ny Pa­tri­ot­ic En­er­gies and Tech­nolo­gies Ltd meet­ing a num­ber of con­di­tions in­clud­ing, in­ter alia: con­fir­ma­tion of abil­i­ty to fi­nance pur­chase and op­er­a­tions; sub­mis­sion of a fi­nalised busi­ness and key de­liv­er­ables plan and a re­fin­ery start-up plan be­fore the con­tract can be prop­er­ly con­sum­mat­ed.

We must al­so com­mend the Gov­ern­ment and the gov­ern­ment-ap­point­ed com­mit­tee for its choice of a lo­cal bid­der in the OW­TU ahead of for­eign­ers, notwith­stand­ing an up­front cash con­sid­er­a­tion on the part of Pa­tri­ot­ic En­er­gies.

This pur­chase, once con­sum­mat­ed shall ren­der re­dun­dant the re­cent­ly-formed Guaracara Re­fin­ing Com­pa­ny Ltd and Paria Trad­ing Com­pa­ny Ltd.

With re­spect to the lat­ter, gov­ern­ment would have been chal­lenged by a huge out­flow of scarce for­eign ex­change which is Paria Trad­ing which is a net im­porter of fin­ished pe­tro­le­um prod­ucts and shall ex­pe­ri­ence a re­ver­sal as we once again be­gin to pro­duce re­fined fin­ished prod­ucts (in­ter alia: in the form of gaso­line, diesel and avi­a­tion fu­el) lo­cal­ly.

In ad­di­tion, the fact that Pa­tri­ot­ic En­er­gies will be grant­ed a three-year mora­to­ri­um on all pay­ments of prin­ci­pal and in­ter­est to­wards the pur­chase and a fur­ther ten years to com­plete pay­off of the pur­chase price shall give the new en­ti­ty much need­ed wrig­gle room to find its feet and to drop an­chor in terms of rev­enue gen­er­a­tion and its abil­i­ty to meet loan re­pay­ments as they be­come due.

This sweet­en­er in terms of pay­back pe­ri­od per­haps rep­re­sents some kind of hu­man-face against the back­drop of the less than pop­u­lar de­ci­sion to sur­rep­ti­tious­ly close down the loss-mak­ing Petrotrin with­out re­course to al­ter­na­tive so­lu­tions such as ra­tio­nal­i­sa­tion of the em­ploy­ee base in­clu­sive of down­siz­ing at the breakeven point in­stead of mak­ing some five thou­sand work­ers re­dun­dant, notwith­stand­ing the neg­a­tive eco­nom­ic im­pacts on the dis­trict of Point-a-Pierre and en­vi­rons and ser­vice in­dus­tries sec­tor.

Once prop­er­ly con­sum­mat­ed and own­er­ship pass­es to the new en­ti­ty we can ex­pect to see a re-em­ploy­ment of some dis­placed work­ers and a fil­lip in terms of eco­nom­ic ac­tiv­i­ty in these af­fect­ed dis­tricts of Point-a-Pierre and en­vi­rons.

Lessons need to be learnt, how­ev­er, from this sor­did af­fair, which Petrotrin had be­come.

Busi­ness ac­tiv­i­ty of ne­ces­si­ty must in­volve some lev­el of risk but the fun­da­men­tal mo­tive of turn­ing a prof­it must be para­mount. No busi­ness can, in fact, pros­per and thrive if its rev­enue po­si­tion fails to at least cov­er vari­able costs and make some kind of con­tri­bu­tion to fixed costs.

The OW­TU has al­ways main­tained that the woes at Petrotrin lay square­ly at the feet man­age­ment which com­mand­ed ex­or­bi­tant salaries and perquisites at the ex­pense of pro­duc­tiv­i­ty cou­pled with po­lit­i­cal in­ter­fer­ence and mis­man­age­ment. Wages and salaries must, there­fore, be in sync with the prof­it po­si­tion of the new en­ti­ty, if it is to be suc­cess­ful.

In ad­di­tion, wages and salaries must be tied to the pro­duc­tiv­i­ty of the en­ter­prise.

In this re­spect, in­cen­tive schemes such as pay-for-per­for­mance and pay­ment by re­sults where wages and salaries are tied to pro­duc­tiv­i­ty rep­re­sent ex­cel­lent mo­ti­va­tors to get the best out of em­ploy­ees while em­ploy­ee share own­er­ship plans where em­ploy­ees ac­tu­al­ly own stakes in the busi­ness and prof­it-shar­ing plans shall go a long way in boost­ing em­ploy­ee morale and by ex­ten­sion pro­duc­tiv­i­ty should Pa­tri­ot­ic En­er­gies and Tech­nolo­gies get the green light to be­gin trad­ing.

Pe­ter Nar­cis

Ch­agua­nas, Via email