Wednesday 28th September, 2005

 
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SUSTAINING ECONOMIC GROWTH AND BUILDING COMPETITIVE BUSINESSES

Mr. Speaker, I will now outline our policies for the main production sectors. Let me reiterate that the top of our agenda is the restructuring and strengthening of the drivers of growth, so that we can develop a diversified, competitive economy that occupies a more profitable position in the global value chain. This means that we must shift successfully from our primary production mode towards activities that take advantage of our resource endowments, strategic location and the quality of our workforce. In the process, we must build competitive businesses on the basis of efficiency, productivity and innovation.

ENERGY AND ENERGY INDUSTRIES

Mr. Speaker, on a policy level, we have taken the decision that all new project proposals in the downstream natural gas sector, including ammonia and methanol production, must include a value-added element for processing into a higher value product. As a result, plans are in train to establish plants to produce melamine, urea-ammonia nitrate and acetic acid.

In addition, discussions are underway with respect to the feasibility of establishing a world scale polypropylene plant for this country. This US$1.4 billion polypropylene plant will be the first plant in Trinidad and Tobago. Plant start up is estimated for the year 2010. It will be yet another of the basic building blocks towards making Trinidad and Tobago a modern industrial state.

It will provide opportunities for downstream businesses in consumer products, film for packaging food, toys, automotive parts and appliances to name a few. It is estimated that short-term employment during the construction phase should peak at 4,000 jobs while long-term employment should result in 400 jobs.

This will assist in reducing the capital as well as the operating costs of both refineries. In addition, this may provide an investment opportunity for citizens of Trinidad and Tobago.

LNG

The Atlantic LNG Train 4 plant is expected to be commissioned in November 2005 - two months ahead of schedule. In addition to expanding LNG production further, a strategic decision has now been taken to explore investment opportunities along the entire LNG value chain. In this regard, NGC LNG (Train 4) has been renamed the Trinidad and Tobago LNG Company which will be the vehicle by which the Government will make and manage future investments in LNG and promote and develop new business opportunities in the industry.

A Committee has been established to select strategic partners for possible joint venture arrangements with the Government in areas of new LNG investments including a new LNG Train, LNG shipping, re-gasification facilities, distribution and marketing to the final consumer. The evaluation process which employs a bidding procedure is expected to be completed shortly.

Several other potential partners have submitted proposals for investments along the entire LNG value chain and these proposals are currently being reviewed.

The National Gas Company is nearing completion of two major pipeline projects that will significantly increase the Company's capability to deliver increased volumes of natural gas to new projects as and when needed. One of these, a 76.5 kilometre 56-inch Cross Island Pipeline (CIP) will have a transmission capacity of 2.4 billion cubic feet per day (Bcf/d), and will initially service the Atlantic LNG Train 4 expansion. This pipeline will possess significant spare capacity to serve the needs of future LNG expansions and new gas based industries to be developed at the Union Industrial Estate at La Brea.

The second, the Beachfield Upstream Development (BUD) project entails the construction of a 63 kilometre, 36-inch offshore gas pipeline from bptt's Cassia B platform off the south-east coast of Trinidad. The BUD project will increase NGC's transmission capacity to Point Lisas Industrial Estate from 1.4Bcf/d to 2.0 Bcf/d to meet the increased gas demand for the M5000 methanol plant, the largest methanol plant in the work and which is now coming on stream, and the future growth in natural gas utilization.

The Government is at present in receipt of proposals for the development of two aluminium smelter plants, one at Cap-de-Ville, Point Fortin, and the other at Union Industrial Estate, La Brea. In keeping with our policy to increase the value added accruing to this country, one of these proposals has clearly outlined plans that would utilize 100 percent of the produced aluminium in downstream facilities located throughout Trinidad.

The Government is also currently giving consideration to two proposals from NUCOR and the International Steel Company aimed at the revitalization of the iron and steel industry. Both proposals offer commitments that could lead to opportunities for the establishment of plants producing downstream products based either on cast-steel or cast-iron.

Essar, an Indian Company, has agreed to construct an integrated Iron and Steel Complex representing an investment of US$1.2 Billion which will include several downstream steel plants. This investment will involve, among other things, the manufacture of steel plates that can be used to make tubes and represents a significant new development in the domestic Steel Industry.

Mr. Speaker, all these initiatives spell jobs - sustainable jobs.

Optimising Refinery Operations

Mr. Speaker, PETROTRIN is pursuing a strategy to establish the Pointe-a-Pierre refinery as the premier refining centre in the Caribbean, supplying high-quality, clean fuels to the local, regional and international market.

A threefold upgrade of the refinery is being pursued, including: a Gasoline Optimization Programme, an Ultra Low Sulphur Diesel Programme, and a Bottom of the Barrel Optimization.

The three year gasoline optimisation programme is underway and involves the construction or revamping of eight major plants, along with the associated utilities and supporting units at an estimated cost of US$350M. The construction phase of the project is expected to lead to a considerable number of jobs.

We are also considering the establishment of a new refinery at Pointe-a-Pierre.

Community Partnership Initiative

Mr. Speaker, our drive to capture more of the value in the energy sector via operational and strategic participation is being impeded by an inadequate number of industry-ready professionals and skilled workers. Currently, not enough graduates are produced on an annual basis to meet the demand. It is estimated that we need 620 professionals, 1,310 engineering technicians and 1,030 craftsmen and machine operators annually. This shortfall in human capital can be attributed to, among other things, a lack of information concerning the sector. To stimulate interest in the petroleum sector, the Ministry of Energy and Energy Industries will implement a Community Partnership Initiative. The objective is to provide future candidates for the range of tertiary level training initiatives now being implemented by the Government at UTT, TTIT and COSTAATT. The Initiative will have a mentorship component and will encourage energy sector companies and professionals to have closer interface with schools in their fence line communities through the Adopt a School Programme and the Energy Alive School Quiz.

CONSTRUCTION

Mr. Speaker, the construction sector will continue to be a major source of growth in 2006. In addition to the Government's housing programme, work is proceeding on a number of major building projects including:

* the Port of Spain International Waterfront Project;

* the Brian Lara Stadium in Tarouba;

* restoration of the Red House

* the Chancery Lane Complex in San Fernando;

* the Government Campus Complex;

* new facilities for the Ministries of Legal Affairs, Education, Social Development, Ministry of Public Administration and Information;

* the THA Financial Complex and Scarborough Library; and

* the construction and upgrade of administrative Buildings for the Municipal Corporations.

NEW GROWTH SECTORS

Mr. Speaker, I indicated last year that seven priority industries have been identified with potential for business development and job creation. To date we have completed strategic plans for all of these areas and implementation of three such plans has begun.

MANUFACTURING

Assisted by investments and the provision of generous fiscal incentives, our manufacturing sector has grown to be the leader in the Caribbean. The Government is committed to helping the sector maintain this dominant position and to become competitive in new markets further afield. Accordingly, in line with the recommendations of the Standing Committee on Business Development, we are taking steps to:

i) complete the Technology Park at Wallerfield;

ii) modernize existing Industrial Parks and develop new Industrial Parks;

iii) increase market intelligence and product development capabilities among manufacturers;

iv) introduce a Degree Program in Entrepreneurship and Innovation at the University of Trinidad and Tobago (UTT);

v) improve the customs services, port facilities and the various institutions facilitating business;

vi) intensify efforts (along with our CARICOM partners) to heighten negotiations on free trade agreements with MERCOSUR, Canada, and Central America;

vii) establish a Research and Development Fund for technology and innovation to support the local research environment;

viii) develop a comprehensive legislative framework that would facilitate the expansion of trade and investment; and

ix) create an environment for fair competition in the domestic market.

THE SMALL AND MICRO-ENTERPRISE SECTOR

The Business Development Company and its subsidiary company, Caribbean Leasing Company, will continue to provide comprehensive technical support and loan guarantees to enable small and medium-sized enterprises to maximize their potential.

At least 80 companies will benefit from its Loan Guarantee Programme in support of loans from financial institutions exceeding $13 million, in sectors including printing and packaging, electronics, agriculture, food and beverage, light manufacturing and distribution. In addition, over $16 million in leases will be disbursed through the Leasing Company for the acquisition of machinery and equipment for plant modernisation and upgrading.

Fair Share Programme

Mr. Speaker, in order to develop the Small Business Sector further and facilitate the development of the entrepreneurial experience and skills set, we will introduce a "Fair Share Programme" as part of the reform of the procurement regime in the Public Sector.

Under the programme, public sector contracts of a value of $1,000,000 or lower will be reserved exclusively for registered small businesses of various sizes.

AGRICULTURE

I now turn, Mr. Speaker, to our plans for the development of the agricultural sector. Global imperatives require the agricultural sector to build and sustain competitiveness by being resilient, adaptive and technology and market driven. The sector must also be managed intelligently using an efficient information technology support and information system.

Over the medium-term our strategy will be to:

* Improve food security and food sovereignty by the development of strategic agricultural sub-sectors;

* Pursue a sustainable rural development agenda;

* Encourage youth involvement in agricultural activity;

* Increase competitiveness in export and domestic markets.

The main drivers of success will be the quality of our access roads, drainage, irrigation and water management systems; land use rationalization; the availability of finance and credit; effective marketing and the policy and regulatory framework; fisheries management and infrastructure; and the quality of our human capital.

CARONI

The centrepiece of our intensified agricultural thrust is the restructuring of Caroni (1975) Limited. With the allocation of two-acre plots of agricultural land in fifteen (15) locations throughout Trinidad to former employees, we have created 7,247 new land owners and brought into productive use an additional eighteen thousand, three hundred and thirty eight (18,388) acres of land.

Mr. Speaker, the Ministry of Agriculture Land and Marine Resources will register these new land owners as farmers which will entitle them to benefit from Government's Agricultural Incentive Programme. Some of these incentives will subsidise the cost to farmers as follows:

* 50% of the purchase price of machinery and equipment;

* 50% of the cost of irrigation equipment including water pumps;

* 25% of the cost of tillage of land; and

* 15% of the purchase price of agricultural vehicles.

Training support will also be provided through the extension services division of the Ministry and thirty (30) buildings owned by Caroni (1975) Limited are to be used for this purpose. The Ministry will also provide support in research and development, agro-processing and marketing.

Mr. Speaker, these farmers will be encouraged to extend from primary farming into value added products, particularly agro-processing and marketing through the creation of Co-operatives and agri-businesses.

These initiatives will transform the traditional semi-commercial and primary-production-based agriculture into a set of profitable viable agri-businesses, and have a positive impact on employment, incomes, trade and production in agriculture and allow them to take advantage of the export opportunities that are available.

New Initiatives by ADB

The Agricultural Development Bank is now positioned as the driving force in promoting business development, growth and competitiveness in the agricultural sector.

The Bank has developed three new products in support of its business development thrust:

* The 'Cocoa Revitaliser' to support the revitalisation of the cocoa industry;

* The 'Grow Safe Loan' to promote the use of good agricultural practice; and

* The "Youth Window", which offers the lowest interest rates to attract our young people to the sector.

Demonstration Farm

To provide the feedstock for the agribusiness sector, Government intends to establish 2 or 3 large farms in the country through joint venture arrangements with private investors

Agri-business Development

Mr. Speaker, the Government is also moving towards the development of new agri-business activity including the establishment of an agro-industrial park. We are in the process of finalizing plans to develop competitive industries from seven primary products: Cassava, Paw Paw, Hot Peppers, Sweet Potatoes, Pumpkins, Tilapia and Rabbits. The objective is to develop new value added processed products for the domestic, regional and extra regional markets.

We are also considering a proposal from the private sector to use Caroni Lands as a basis for the development of an agro-processing industry. This is a promising new initiative which has many possibilities for the agro-processing industry.

Development of Strategic Agriculture Sub-Sectors

Mr. Speaker, a major objective of our agricultural strategy is food security. We have commenced programmes to increase the level of sufficiency in five (5) strategic foods, namely Rice; Root crops and tubers; Small ruminants; Aquaculture and Dairy.

Family Farms

Mr. Speaker, over the past twenty years, the number of family farms has declined from approximately 30,000 units to 20,000. Yet they remain central to food production, the economic livelihoods of rural communities and good natural resource management. In implementing our rural development policy we will focus on:

* Providing infrastructure to facilitate increased production and productivity by family farms;

* Increasing the production of local foods through the Growbox and Community Aquaculture projects;

* Expanding youth-oriented programmes such as YAPA and the 4H and Young Farmers' Programmes;

* Establishing agricultural settlements in rural areas; and

* Providing training and facilitating the transfer of appropriate technology, to farmers, fisher folk and agri-businesses.

TOURISM

Mr. Speaker, in testimony to the success of our marketing strategy, which positions Trinidad and Tobago as a destination of choice for leisure, events and conference tourism, visitor arrivals are projected to increase to 481,000 in 2005 some 8 percent higher than last year.

Nonetheless, a significant amount of work is required to bring our tourism product on both islands to internationally competitive levels.

The Government, Mr. Speaker, intends to exploit fully our enormous tourism potential in Trinidad. Our strategic thrust is to:

* upgrade the existing room stock to international standards, and establish a critical mass of new rooms led by the 5-star end of the market;

* position Port-of-Spain as the Meetings and Conventions Capital of the Southern Caribbean and the Business Centre of the Sub-region;

* Upgrade selected sites and attractions and develop various facets of the product;

* Increase airlift service to both islands;

* Enhance industry standards and quality service through human resource development and on-going industry training; and

* Generate a higher level of tourism awareness among the population.

In keeping with our focus on product development, the Chaguaramas Development Authority is in the process of establishing a National Heritage Park and Cultural Village in the Chaguaramas Peninsula. In addition, we propose to develop a National Heritage Park in each Municipal Corporation, which will encourage exploration and conservation of the cultural resources of each municipality.

SOUND INFRASTRUCTURE AND EFFECTIVE TRANSPORTATION

Mr. Speaker, we recognize the adverse impact the quality of public infrastructure has on the productive sectors as well as the quality of life of our citizens. We must, therefore, respond in creative and innovative ways to bring relief in the short, medium and long-term.

In 2006, the Government will provide the necessary resources to treat properly with these issues. We have allocated the sum of $489 million specifically for road rehabilitation and repair work, and for the first time the sum of $292 million has been allocated specifically for the clearing, de-silting and improvement of rivers, drains and watercourses.

Allow me now to inform this Honourable House of specific plans and programmes to upgrade our main infrastructure systems.

Roads

Mr. Speaker, the major road infrastructure projects scheduled for fiscal 2006 include, inter alia:

* Extension of the Solomon Hochoy Highway from Golconda in San Fernando to Debe;

* Commencement of a new highway from San Fernando to Princes Town;

* Extension of the Churchill Roosevelt Highway from O'Meara Industrial Estate to Wallerfield - this project is already underway, and will provide proper highway access to the new University of Trinidad and Tobago and the Technology Park under construction at Wallerfield;

* Commencement of the Interchange at the intersection of the Churchill/Roosevelt and Uriah Butler Highways;

* Commencement of the Western Freeway to Chaguaramas;

* Commencement of the Mamoral Dam - which will reduce significantly flooding in the Caparo River Basin;

* Extension of the Diego Martin Highway to Diamond Vale to be completed within the next two months; and

* Commencement of an Overpass and Highway improvements in Cocorite - which will facilitate the construction of new secondary schools planned for the Westmoorings area.

The newly formed National Infrastructure Development Company, NIDCO, will be responsible for the execution of most of these projects on behalf of the Ministry of Works & Transport.

The IDB-funded National Highways Programme will continue in fiscal 2006 with the rehabilitation of 70 kilometres of roads and the commencement of construction of 19 new bridges. Our Programme for Upgrading Road Efficiency (PURE) will target the repair of landslips, and road rehabilitation generally, as well as the development of alternative vehicular access routes linking key population centres throughout the country, and the construction of additional lanes on our major highways and main arterial roads. Two major areas of focus will be the development and improvement of roads in Chaguanas and Maraval to relieve traffic congestion.

Drainage

Mr. Speaker, the Government will embark in 2006 on the development of a Comprehensive National Drainage Plan that takes into account existing studies.

In the interim, the Drainage Division will continue work on the projects already started, which are geared to address specific situations. These include the commencement of construction of the Mamoral Dam and Reservoir in 2006 to alleviate flooding in the Caparo River Basin. Because of the magnitude and complexity of this project it will be undertaken over a two and half year period, costing in excess of $100 million.

Mr. Speaker, the issue of flooding in the City of Port of Spain is an urgent one. In this regard, as a short-term measure, the Ministry of Works and Transport, in conjunction with the Port of Spain City Corporation, will undertake the responsibility to flush out all of the underground drains within the City. New pumps will also be installed for the Sea Lots area, and the identification of a permanent solution to the problem of flooding in Port-of-Spain will be one of the key deliverables of the Comprehensive National Drainage Study.

Mr. Speaker, it will be remiss of me not to refer to the situation where previously flood-free areas are now being transformed into flood prone areas, as a result of poorly-engineered and poorly-constructed land and building developments. I can assure you that the Government intends to deal very firmly with unscrupulous land developers who contribute in no small way to our flooding problems.

Transportation

Mr. Speaker, in our 2004 Budget presentation, we advised this House of the award of a contract for the Comprehensive National Transportation Study. This study has commenced and is expected to be completed by July 2006.

One of the major issues which the consultants have encountered in the initial review of the land transportation sector is the general gridlock that occurs on the nation's roadways and, in particular, along the main East-West and North-South arterial roads in Trinidad. It is our intention to reintroduce a rail system in Trinidad to provide a viable solution to our public transportation problems. In this context, we have already embarked on a Mass Transit Study, and in 2006, we shall invite proposals for the first trial phase of our new light rail system. The new Mass Transit Rail System is expected to cost at least $15 billion, when it is fully implemented, but we believe that this expenditure is justified and required.

Air

Mr. Speaker, allow me to address the important issue of BWIA. As the national community is well aware, the Task Force appointed by the Government to evaluate options for the future of our national airline has submitted its recommendations. After careful deliberations, we have chosen to pursue the option of creating a new National entity using as a basis, a restructured BWIA. I acknowledge, Mr. Speaker that there have been numerous efforts at 'restructuring' over the past 45 years but we must put these efforts in the context of the dynamics of the airline industry and especially state-owned airlines across the world. We believe strongly that we are now in a position to complete a seamless transition from the existing BWIA to this new entity. But, this will involve a substantial investment of taxpayers' dollars by the Government and some major departures from the status quo. We will therefore proceed with a plan that will involve:

* recapitalisation of approximately US$250 million to ensure this new entity could manage its operations. The new entity would continue to be majority owned by the Government with a plan for further divestment to the private sector;

* a significant change in the management of the company and improvement of corporate governance;

* to ensure that the new entity is not put to a disadvantage to charter flights;

* a restoration of maintenance capability in the Company; and

* fundamental changes in the work rules and culture of the airline.

In this regard the Government will appoint a new board of BWIA under the Chairmanship of Mr. Arthur Lok Jack to undertake this exercise of the transition from existing BWIA to the new entity.

With this approach, Mr. Speaker, we believe we can arrive at a new airline designed abinitio as a Regional Carrier and open in due course to participation from Regional Governments and the Regional Private Sector.

Sea

Mr. Speaker, feedback from the travelling population in respect of the Government Shipping Service (G.S.S.) has been overwhelmingly positive. Citizens experienced increased comfort and decreased travel time.

Mr. Speaker, the data reveal that between January to July 2005, total passenger usage on the Government Shipping Service (G.S.S) increased by approximately one hundred percent (100%) and total vehicle transportation increased by approximately eighty-two percent (82%) on the Port of Spain - Scarborough route, over last year.

You will be aware by now that in November 2005 there will be two leased fast ferries on the inter-island route, and I also wish to advise that in 2006, the Government proposes to purchase a fast ferry (if an appropriate one is available) to service the sea bridge between Trinidad and Tobago, when the CAT is taken out of service in April 2006.

Refurbishment and construction works will be undertaken on the Passenger Terminal Building at Port of Spain at an estimated cost of $11Mn, with physical works commencing in early 2006. The expansion of the Terminal Building at Scarborough is estimated to cost $1.5Mn with designs to be undertaken in fiscal 2006 and actual construction works will commence in fiscal 2007.

The Public Utilities

Mr. Speaker, our economic development plan focuses on the provision of adequate utilities, especially electricity and water.

Accordingly, several capital-intensive projects will be implemented that will provide additional power to facilitate the planned housing, industrial and commercial activities across the country. These include: establishment of a power station at Tobago; the bringing of 132 kv supplies to Wallerfield, Union Estate, Tarouba and Point Fortin; the upgrade of the electricity supply to north and east Trinidad; and the upgrade of several substations across the country.

Additionally, electricity supply will be provided to those rural communities where previously it has been uneconomic to do so. All major roads and highways across the country will be illuminated to aid in reducing night time road accidents, providing a greater sense of security to residents and facilitating greater commercial activity through longer business hours.

T&TEC will continue its programme of activities designed to enhance living conditions throughout the country directly. Currently there are 70,000 street lights in the country. The aim is to install 50,000 additional street lights in the next three year period and upgrade the wattage of 36,000 street lights.

T&TEC will also undertake approximately 300 electrification projects between the NSDP and the Rural Electrification Programme, a joint intervention funded by the Government and the European Commission.

Water

Further, Mr. Speaker, in an effort to improve the quality and supply of water and wastewater services, the Water and Sewerage Authority (WASA) will commence implementation of the three-year Water Sector Modernization Programme estimated to cost $1.2Bn. The Programme will result in an increase in the number of persons receiving a 24/7 water supply from 26 percent to 36 per cent and an improvement in supply to much of the country.

SUSTAINABLE MANAGEMENT OF ENVIRONMENTAL ASSETS

Mr. Speaker, maintaining a clean healthy environment is a key priority for this Government as we move decisively to enhance overall socio-economic growth and the well being of our citizens. The environment has great economic and cultural importance and is under threat by a number of factors including deforestation, indiscriminate land development, and the improper disposal of solid waste. These factors lead to massive flooding during the rainy season, a situation which is particularly acute in our inner cities and business districts.

National Environmental Policy

In this context, Mr. Speaker, we have revised the National Environmental Policy to include the application of economic instruments and market incentives to encourage sustainable use of resources and the reuse and recycling of waste.

This leads me, Mr. Speaker, to the issue of the improper disposal of beverage containers. In order to address this problem, the EMA has finalized a Draft Beverage Containers Bill, which is intended to encourage the reuse and/or recycling of container waste and to discourage the wasteful, unsanitary and environmentally degrading practice of disposing of empty beverage containers. We propose to establish a recycling industry, with incentives to be offered to manufacturers, vendors and consumers to reuse or recycle these containers.

Mr. Speaker, CEPEP has made an important contribution towards the enhancement of the environment while affording its 6,000 workers gainful employment and the opportunity to make a meaningful contribution to their families and their communities. The programme has also given its workers exposure to on-the-job training and educational opportunities that are geared towards skills enhancement, career advancement, and more importantly, improved self esteem.

Mr. Speaker, the time has come to re-organise the CEPEP Programme. Firstly, we will review the existing contracts to ensure that they are consistent with original objectives of giving workers shares in the company. The hours of work in the programme will now be from 6am to noon, and workers will be required to accept training from 4pm - 6pm as a pre-condition of employment with CEPEP.

The training will include adult literacy, life skills, conflict resolution, family life, personal management and for contractors, financial management. The intention is to partner with existing training programmes to give workers the requisite skills so that they can graduate out of the programme.

Mr. Speaker, permit me to reiterate the commitment of Government to the protection and the "greening" of the environment. Accordingly, the National Reforestation and Watershed Rehabilitation Programme will continue to undertake reforestation of State lands through the contracting of community groups.

Moreover, Mr. Speaker, community groups and organizations will be encouraged to access the resources of the Green Fund in fiscal 2006. We are now in the process of finalising the Regulations for submission to the Parliament and will launch a promotional campaign on the procedures for applying for grants from the Fund.

Public Sector Reform

Mr. Speaker, permit me to update this Honourable House about a number of public sector reforms that have been underway or are to be introduced in the context of the 2005/06 Budget. Specifically, I would like to treat with:

(i) The status of our financial sector reforms;

(ii) The introduction of additional special purpose state enterprises to manage certain capital projects on behalf of the central government; and

(iii) Procurement reform, which was foreshadowed in our last Budget.

Financial Sector Reform

Mr. Speaker, our comprehensive financial sector reform programme, based on the White Paper on the Reform of the Financial System which was laid in Parliament in June 2004, is proceeding well and is broadly on schedule. You would recall that in July 2004, the Insurance Act was amended to allow for the transfer of responsibility for the Insurance sector.

In March 2005, Electronic Trading commenced on the Stock Exchange, while two months later the office of the Financial Services Ombudsman - an upgrade from the Banking Service Ombudsman - was launched. Our Payments System has been upgraded in line with international standards: we now have a Credit Rating Agency and we have established a Financial Sector Regulatory Council to ensure co-ordination between the various regulatory bodies.

Several pieces of legislation governing the Financial Services Sector are in an advanced state of preparation. Amendments to the Financial Institutions Act and the Securities Industry Act are expected to be brought to Parliament by the end of 2006. Currently, work is advanced on a new Insurance Act and on legislation which would bring Credit Unions under the regulation of the Central Bank. These pieces of legislation are expected to be presented to Parliament before the end of 2006. Legislation governing the Private Pensions Industry which is currently been supervised by the Central Bank, is also on the agenda for late 2006 or early 2007.

Mr. Speaker the objective behind all these initiatives is to consolidate Trinidad and Tobago's position as the Pan Caribbean Financial Centre.

Special Purpose State Enterprises

Mr. Speaker, traditionally implementation of the Public Sector Investment Programme (PSIP) has faced serious challenges because of skill shortages and cumbersome bureaucratic procedures. Over the last three years, these problems have been exacerbated by this Government's commitment to accelerate infrastructural development in line with our long-term vision. In order to increase the rate of implementation of our expanded investment programme, we will out-source to fifteen (15) special purposes State Enterprises to deliver an accelerated implementation of certain approved Government projects in selected ministries. These fifteen special purposes vehicles will undertake developmental projects in the areas of education, community development national infrastructure, rural development, the development of sporting infrastructure, tourism and urban development. The enterprises would report to the respective line ministers and would be subject to the highest standards of good governance, transparency and financial accountability.

These enterprises are limited liability companies to assist Ministries which do not possess the institutional capacity to manage the various infrastructural development projects. They will have 'project management' responsibilities for the identified projects and the actual work will in turn be outsourced to the private sector. This is consistent with the Public Private Partnership Model of Project Delivery.

Strict procedures have been established to govern the relationships between the Enterprises and the Government in the delivery of their respective mandate. The procedures relate to:

* Funding of the operations of the Enterprises;

* Remuneration packages for the executive management; and

* Procurement and accounting standards and reporting arrangements.

We believe that these enterprises can effect significant increases in the delivery of Government projects thereby improving the well-being of the citizenry at large.

Mr. Speaker, the Board of Directors of the new companies will have full control over the implementation of the projects assigned to their respective company. However, the Boards will be held fully accountable for completing the projects on time and within Budget as well as upholding good corporate governance practices within the state enterprises.

Procurement Reform

Mr. Speaker, another reason for the slow project implementation of the PSIP is the inflexible nature of the existing legal framework - that is the Central Tenders Board Ordinance and its various amendments. The platform has too little flexibility to accommodate modern modes of project delivery.

In the 2005 Budget Statement, I indicated that a Green Paper on the Reform of the Government's Procurement Regime was in the public domain for comment. I am pleased to report that the comments received from the stakeholders have been considered and incorporated into a White Paper which was laid on the table of this Honourable House last Monday, paving the way for a new comprehensive approach to Government's acquisition of goods and services.

Mr. Speaker, the establishment of the new Procurement system will require the repeal of the Central Tenders Board Ordinance with its subsidiary legislation, and its replacement by a new Act. The new Procurement Regime will ensure greater flexibility, open competition and ethical and fair dealing. In addition, it will increase the promotion of national industry.

Mr. Speaker, the proposed Procurement infrastructure will entail the following:

(1) A fully decentralised procurement regime;

(2) Establishment of a single Legal and Regulatory Framework based on the underlying principles of:

* Value for Money;

* Transparency; and

* Accountability

(3) Establishment of a Regulatory Agency and an Independent Regulator with a monitoring and auditing function;

(4) Application of the new Public Sector Procurement Regime to all Government Ministries, Statutory Boards, Regional Health Authorities, Regional Corporations, State Enterprises, NGO's and CBO's.

Mr. Speaker, we anticipate that this new Procurement Regime will come into effect by the fourth quarter of fiscal 2006.

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