In just over a week Fi­nance Min­is­ter Colm Im­bert will present his sev­enth bud­get.

This bud­get comes at a time when the gains of vac­ci­na­tion world­wide con­tin­ue to be threat­ened by the rel­a­tive­ly large num­ber of peo­ple who ei­ther don’t have ac­cess to vac­cines or sim­ply refuse to take them. This has led to the emer­gence of vari­ants, in­clud­ing the dead­ly Delta that has killed so many in In­dia and across the world.

So Im­bert is plan­ning in a time of great un­cer­tain­ty and at a time when the world’s econ­o­my has still not ful­ly re­opened.

We have seen our Caribbean broth­ers and sis­ters sub­ject­ed to sig­nif­i­cant no move­ment or­ders and oth­er types of lim­i­ta­tions on trav­el and gath­er­ings that con­tin­ue to hurt busi­ness. When you add to that the tourism sec­tor con­tin­ued strug­gle, the re­gion and by ex­ten­sion T&T has a chal­leng­ing time ahead.

But you see Im­bert has three oth­er ma­jor prob­lems that his gov­ern­ment has to bear a lot of re­spon­si­bil­i­ty for.

He first­ly has an econ­o­my that is heav­i­ly lever­aged, one in which the debt to GDP (gross do­mes­tic prod­uct) is clos­er to 85 per cent ac­cord­ing to the Cen­tral Bank of T&T.

This leaves him with lim­it­ed fis­cal space to do the kind of deficit fi­nanc­ing that may be nec­es­sary to give the econ­o­my the stim­u­lus it re­quires to get out of this slump. The truth is this gov­ern­ment op­er­ates with smokes and mir­rors.

From the time Im­bert took over as Fi­nance Min­is­ter he has promised to reign in spend­ing and live with­in our means.

For sure some spend­ing has been cut, but the fun­da­men­tal chal­lenges of trans­fers and sub­si­dies and the un­sus­tain­able size of the pub­lic ser­vice have not been dealt with, as the Gov­ern­ment con­tin­ues to kick the can down the road to perdi­tion.

The sec­ond chal­lenge Im­bert has is di­rect­ly linked to the first, that is the myr­i­ad of state en­ter­pris­es, many un­prof­itable and many fac­ing se­ri­ous is­sues of poor gov­er­nance.

It may be easy to fo­cus on the usu­al sus­pect like CEPEP or WASA or even Lake As­phalt and Na­tion­al Quar­ries Lim­it­ed but to­day I want to pay a lit­tle at­ten­tion to the two big ones, Her­itage Pe­tro­le­um/Petrotrin and the Na­tion­al Gas Com­pa­ny Lim­it­ed (NGC).

On Tues­day, Her­itage an­nounced a set­tle­ment with AV Oil and Gas Lim­it­ed (AV Oil) which it said avoid­ed the pay­ment of tens of mil­lions of dol­lars in dam­ages.

The com­pa­ny al­so en­tered in­to an En­hanced Pro­duc­tion Ser­vice Con­tract (EP­SC) with AV Oil for the pur­chase of crude oil.

Ac­cord­ing to Her­itage, the set­tle­ment is root­ed in the par­tial award de­liv­ered on June 11, 2021 by the ar­bi­tra­tion pan­el in favour of AV Oil which found that Petrotrin had failed to es­tab­lish that AV Oil was en­gaged in seal-tam­per­ing or any oth­er in­ap­pro­pri­ate prac­tices in the process of the de­liv­ery of crude oil to Petrotrin dur­ing the pe­ri­od April 2016 to Ju­ly 2017. 

The pan­el of ar­bi­tra­tors found that Petrotrin did not have rea­son­able grounds for sus­pect­ing that AV Oil had mis­con­duct­ed it­self or oth­er­wise been in­volved in wrong­ful or fraud­u­lent ac­tiv­i­ty which would have nor­mal­ly en­ti­tled Petrotrin to ter­mi­nate the IP­SC Agree­ment un­der Ar­ti­cle 29.1.  Ac­cord­ing to the re­lease on Tues­day, to as­sist with its con­sid­er­a­tions and hav­ing re­gard to the view of the le­gal team, the Board said it sought not on­ly one but two le­gal opin­ions, one from Rol­ston Nel­son SC, a lead­ing Se­nior Coun­sel in com­mer­cial law, a for­mer Jus­tice of Ap­peal and a for­mer Judge of the Caribbean Court of Jus­tice, and Si­mon Hugh­es QC, a lead­ing Silk spe­cial­is­ing in ar­bi­tra­tions in the con­struc­tion and en­er­gy sec­tors in the Unit­ed King­dom.

It was the opin­ion of these se­nior spe­cial­ist at­tor­neys that fur­ther lit­i­ga­tion was not ad­vis­able, the chances of suc­cess were low, and set­tle­ment of the mat­ter should be pur­sued.  

The Her­itage Board must be com­mend­ed for its de­tailed ex­pla­na­tion about the think­ing that led to its de­ci­sion to dis­con­tin­ue lit­i­ga­tion and set­tle.

There is no doubt that part of the stench sur­round­ing this is­sue is the fact that it was first raised on a po­lit­i­cal plat­form by the Leader of the Op­po­si­tion Kam­la Per­sad-Bisses­sar fol­lowed by the Prime Min­is­ter, Dr Kei­th Row­ley, re­veal­ing that the own­er of com­pa­ny ac­cused of steal­ing from a state en­ter­prise is his per­son­al friend.

So you have your friend’s com­pa­ny vic­to­ri­ous, the Es­pinet Board that ini­ti­at­ed the ac­tion fired short­ly af­ter the “dis­cov­ery of the ir­reg­u­lar­i­ties” and re­placed by a Board head­ed by your per­son­al At­tor­ney Michael Quam­i­na.

The mat­ter is then set­tled with your friend’s com­pa­ny af­ter a failed ar­bi­tra­tion. Quam­i­na has made it clear that he re­cused him­self from any­thing deal­ing with AV Oil.

These things hap­pen in small so­ci­eties and the chal­lenge that Im­bert and the Gov­ern­ment face is how can you build trust in the state en­ter­prise sec­tor and en­sure that there is a strong gov­er­nance struc­ture.

Her­itage and its pre-pre­de­ces­sor com­pa­ny have to an­swer whether the re­ports from re­spect­ed con­sult­ing com­pa­nies that point­ed to ir­reg­u­lar­i­ties were false, fab­ri­cat­ed or just plain wrong?

What is the com­pa­ny go­ing to put in place or has put in place to as­sure the coun­try that the Cat­shill dis­as­ter will not re­cur and that all of the com­pa­nies sell­ing crude to Her­itage, their pro­duc­tion can be ver­i­fied as ac­cu­rate.

But while Her­itage state­ment has been forth­com­ing on this mat­ter the same can­not be said of the NGC.

Hav­ing in­vest­ed and lost half a bil­lion dol­lars in at least two ma­jor failed projects its Pres­i­dent Mark Lo­quan ap­pears un­touch­able, with the Prime Min­is­ter bring­ing him in­to the po­lit­i­cal realm, speak­ing from the podi­um of a PNM meet­ing, in­sist­ing that Lo­quan has the full sup­port of the po­lit­i­cal di­rec­torate.

In any half se­ri­ous com­pa­ny Lo­quan and the Board of the NGC would be gone. Not in this place of mim­ic men. But Mr Lo­quan’s con­tract has two more months left. Let’s see what hap­pens.

No one is hap­py to see what the NGC has come to but pre­tend­ing all is well while Rome burns may work for the politi­cians but not the coun­try.

The loss of the half a bil­lion dol­lars is what we know, how many oth­er projects have gone bad? How much mon­ey wast­ed? How much lost.

Don’t for­get this is the same com­pa­ny that spent a bil­lion dol­lars on a failed waste wa­ter pro­gramme, was build­ing and light­ing grounds in UNC con­stituen­cies, was fix­ing roads to suit the then-po­lit­i­cal di­rec­torate, went on a car­ni­val fête spend­ing spree for its ex­ec­u­tive, spends mil­lions of dol­lars try­ing to por­tray a nar­ra­tive that is of­ten at vari­ance with the truth.

So the NGC has a re­cent his­to­ry of poor gov­er­nance that is hurt­ing the coun­try’s abil­i­ty to max­imise re­turns from its hy­dro­car­bons.

The third and fi­nal chal­lenge that Im­bert faces is the abil­i­ty to show imag­i­na­tion and im­ple­ment any re­forms that will lead to a repo­si­tion­ing of T&T and the build­ing out of a new econ­o­my.

Da­ta is of­ten a good pre­dic­tor of the fu­ture. If that is the case it is like­ly more of the same come Oc­to­ber 4.