Wednesday 28th May, 2008

 

PM: Caroni cost T&T $12 billion

 
 
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A cross section of participants at Monday night’s annual Pointe-a-Pierre constituency conference at the Petrortin Sports Club.
Inset: Prime Minister and Political Leader of the ruling Peoples National Movement, Patrick
Manning gestures as he addresses PNM Point-a-Pierre constituents on Monday night during the annual Pointe-a-Pierre constituency conference at the Petrotrin Sports Club. Photo: Rishi Ragoonath

By Yvonne Webb

Prime Minister Patrick Manning has said that Caroni (1975) Ltd cost the country $12.5 billion between 1975 and 2008.

This revelation comes as government seeks an additional $3.5 billion in supplementary funding, $80million of which is to repay sums used in exiting the sugar industry.

Addressing members of the PNM’s Pointe-a-Pierre constituency on Monday night, Manning said of the $12.5 billion, it cost $7,709 million to close the sugar company which had lost its previous position of pre- eminence.

Manning said the decision to close the company was based on economics and denied that it had anything to do with “ethnic politics, malice or vindictiveness.”

He said the reason the closure was so hotly opposed by the Opposition was because their political organisation and structure were rooted in the trade union movement and not the people as obtained in the PNM.

“Therefore in 2003, when the PNM government took the position that sugar was not economically viable—and the time had come to change it—those opposed to us saw it as a dagger to their hearts,” he said.

“The effect was not so much the demise of sugar and the industry; they saw the demise of the trade union and the demise of the basis on which their political organisation was based,” Manning said.

Manning itemised the closure costs as follows:

n Backpay for the 9,007 workers—$97 million

n Enhanced VSEP for 7,873 workers —$741million,

n Re-training programme $16 million,

n Pension payment—$439million,

n Pension plan deficit—$360million,

n Development of 30 residential housing estates $592million,

n Development of agricultural estates for 8,388 former Caroni employees—$598 million,

“A total of $2,845 million, that is what we put into the closure of Caroni up until that time. But there were additional costs,” Manning said.

He said arrears to creditors amounted to $150million, administrative costs to $127million, legal fees and consultancy fees to $35million, statutory liabilities (taxes, NIS) $177million, loan repayment $12 million, assumption of loans, $3,400 million, together with two loans, one from RBTT guaranteed in the sum of $719 million and the other from Citibank in the sum of $131million, amounting to $4,781 million.

“In addition, as cane farmers sought to exit the system, government agreed to pay $82million in transitional cost.

“The total cost, therefore, for closing Caroni Ltd, amounted to $7,709 million. It did not cost us two cents.

“And if you add on to that, what Caroni cost us in the period 1975 to 2002, it cost the country, because it was not profitable, $4,755 million.

“The sugar industry cost us between 1975 and 2008 $1,2464 million—$12.5 billion.”

Manning also scoffed at those who envisioned massive unemployment of the 9,000 ex-sugar workers when the industry was shut down.

He said the country is experiencing full employment.

“The economy has expanded to such an extent that we are no longer able to satisfy the demand for labour.”

To continue its accelerated rate of development, Manning said the Government now has to turn to Caricom countries, Malaysia and even China to satisfy its labour needs.