Ink far from dry on refinery deal

SEVERAL aspects of Stuart Young’s February 27 announcement about the fate of the Guaracara refinery suggest the matter is far from a done deal.

Speaking at Whitehall, Mr Young, a lawyer by training, was very cautious in his use of words.

The Energy Minister disclosed that a cabinet sub-committee led by Minister of Planning Camille Robinson-Regis, oversaw a review exercise before the full cabinet came to a particular decision.

That decision was stated in the following terms, “We have noted the evaluation committee’s recommendation.

“We have also noted the proposal for the lease-type commercial arrangement proposed, which sees the Guaracara refinery operating alongside Paria Fuel Trading Co Ltd by way of granting access to Paria’s associated logistic assets via a commercial arrangement between Paria and the lessee, which lease arrangement would allow the government several things – to retain ownership while granting usage rights to the preferred bidder.”

Further, “the cabinet took the decision to inform Trinidad Petroleum Holdings Ltd (TPHL) of our non-objection to the recommendation of the evaluation committee and its proposals for the sale or lease of the refinery and ancillary assets of Guaracara. We also agreed that TPHL should consider the recommendations of the said evaluation committee and proceed accordingly.”

Non-objection is not an outright endorsement.

After a lengthy process involving several committees, numerous rounds of negotiation and several years since 2018, the cabinet has, again, essentially kicked the can down the road with the ball now being in the court of TPHL, which is the holding entity for the country’s energy assets.

The formal delegation of this matter to TPHL means it is not a virtual certainty that Oando Trading DMCC will be approved by the state-appointed board of that entity, whose members hold specific fiduciary duties to the government shareholder, even if approval appears highly likely.

This further suggests the matter is not set in stone as the government’s strict policy position is that whoever runs the refinery should do so “at no cost to the taxpayer.”

In this regard, the terms of the proposed commercial arrangement with Paria, involving “granting access to Paria’s associated logistic assets” have not been spelt out, if indeed they have been determined. It must fall to the TPHL board to guarantee that any arrangement is not financially detrimental.

Additionally, the timing of Mr Young’s announcement is a reason for pause. As is his statement that the disposal of the state asset does not fall under current procurement laws.

That statement is likely to be tested in court, while the outcome of the general election itself remains to be seen.

Much light must now be shed by TPHL.

But it is uncertain how quickly that entity will complete its own review and whether that process will end prior to the election.

The opposition UNC has already expressed dissatisfaction with the notion of any deal on the eve of a poll.

It remains to be seen whether the convention that outgoing governments hold their hand on significant policy measures will be observed.

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