Cur­tis Williams

cur­tis.williams@guardian.co.tt

One and a half months af­ter a Cab­i­net-ap­point­ed com­mit­tee was asked to re­view the pro­pos­al from the Oil­fields Work­ers’ Trade Union’s Pa­tri­ot­ic En­er­gies Com­pa­ny Lim­it­ed for the ac­qui­si­tion of Petrotrin’s Point-a-Pierre re­fin­ery, Gov­ern­ment will to­day an­nounce its back to the draw­ing board af­ter re­ject­ing the of­fer.

Well placed sources have told Guardian Me­dia that the com­mit­tee was of the view the pro­pos­al did not meet the min­i­mum re­quire­ments and it was in the coun­try’s best in­ter­est to go out and seek to en­gage an­oth­er com­pa­ny to take con­trol of the 100-year-old re­fin­ery.

The de­ci­sion is like­ly to be a ma­jor set­back for the OW­TU, which lost a sig­nif­i­cant part of its union mem­ber­ship and pow­er when the re­fin­ery was shut down in 2018 and has spent mil­lions in con­sul­tan­cy fees as it tried to gain own­er­ship of the re­fin­ery.

In the end, it ap­pears the Gov­ern­ment could not agree terms with the union and the re­fin­ery will con­tin­ue to re­main shut.

Yes­ter­day, a me­dia re­lease an­nounced that Fi­nance Min­is­ter Colm Im­bert and En­er­gy Min­is­ter Franklin Khan will be host­ing a joint vir­tu­al me­dia con­fer­ence at 11 am to­day to ad­dress the Cab­i­net’s de­ci­sion on the ‘Pro­cure­ment Process’ for the re­fin­ery.

Be­fore last year’s Gen­er­al Elec­tions, the is­sue of the re­fin­ery was a ma­jor top­ic on the plat­form with the Unit­ed Na­tion­al Con­gress an­nounc­ing its in­ten­tion to restart the re­fin­ery it­self, ef­fec­tive­ly tak­ing it away from Pa­tri­ot­ic En­er­gies get­ting it. At that time, Pa­tri­ot­ic was the pre­ferred bid­der and in talks with the Gov­ern­ment.

This prompt­ed the OW­TU to at­tack the Op­po­si­tion and to call on Gov­ern­ment to con­clude the ne­go­ti­a­tions be­fore the elec­tions. This did not hap­pen and Prime Min­is­ter Dr Kei­th Row­ley in­sist­ed the Gov­ern­ment would not be pres­sured in­to a bad deal on the al­ter of po­lit­i­cal ex­pe­di­en­cy.

On Oc­to­ber 29 last year, Pa­tri­ot­ic sub­mit­ted a pro­pos­al for the pur­chase of the Petrotrin re­fin­ery. How­ev­er, two days lat­er on Oc­to­ber 31, Khan an­nounced Gov­ern­ment had re­ject­ed Pa­tri­ot­ic’s pro­pos­al. Not­ing that both par­ties were bound to non-dis­clo­sure agree­ments in these dis­cus­sions, he said the key is­sues at the end of pro­longed dis­cus­sions were the pur­chase price fi­nanc­ing, the restart fi­nanc­ing and first pri­or­i­ty lien on the as­sets.

“Af­ter much to-ing and fro-ing, ex­change of let­ters and a se­ries of meet­ings in­volved with the ne­go­ti­at­ing team, the Ho­n­ourable Prime Min­is­ter and the Ho­n­ourable Min­is­ter of Fi­nance gave the par­ties an Oc­to­ber 31 dead­line to reach an agree­ment on the sale of the cap­tioned as­set,” Khan said then, adding the pro­pos­al did not ad­dress key out­stand­ing is­sues and there­fore did not meet the nec­es­sary cri­te­ria.

Row­ley then in­struct­ed the eval­u­a­tion com­mit­tee to take a sec­ond look at the pro­pos­al and make fur­ther com­ments and rec­om­men­da­tions.That re­port was sub­mit­ted to Cab­i­net on No­vem­ber 30.

The re­fin­ery re­mains closed and there have been ques­tions about the cost of the restart and whether Pa­tri­ot­ic had the re­sources to make it work, both in terms of fi­nan­cial and man­age­ment. There are es­ti­mates that to safe­ly restart the re­fin­ery could cost in ex­cess of 500 mil­lion and more like­ly close to a bil­lion dol­lars.

Pa­tri­ot­ic is whol­ly-owned by the OW­TU.

In Oc­to­ber 2018, Gov­ern­ment de­cid­ed to re­struc­ture Petrotrin.

The com­pa­ny was bro­ken in­to sub­sidiaries, in­clud­ing Her­itage, Paria Fu­el Trad­ing, Guaracara Re­fin­ing and Petrotrin.

On May 21, 2019, Guaracara and Paria as­sets went to five short-list­ed bid­ders, in­clud­ing Pa­tri­ot­ic En­er­gies.

The fol­low­ing month, the Cab­i­net ap­point­ed an eval­u­a­tion team head­ed by Vish­nu Dhan­paul, the per­ma­nent sec­re­tary in the Min­istry of Fi­nance.

On Sep­tem­ber 20, 2019, Fi­nance Min­is­ter Colm Im­bert an­nounced in Par­lia­ment that Pa­tri­ot­ic was the pre­ferred bid­der and had of­fered an up­front pay­ment of US$700 mil­lion for the re­fin­ery, plus US$300 mil­lion got its non-core as­sets. -With re­port­ing by Joel Julien