Tancoo defends Ramdeen, says bold approach is ‘fulfilling his mandate’

Ke­jan Haynes

Lead Ed­i­tor News­gath­er­ing

ke­[email protected]

PANA­MA CITY -Fi­nance Min­is­ter Dav­en­dranath Tan­coo has pushed back against crit­i­cism of Na­tion­al Gas Com­pa­ny chair­man Ger­ald Ramdeen, re­ject­ing claims he is act­ing uni­lat­er­al­ly as the Gov­ern­ment moves to raise nat­ur­al gas prices and dis­man­tle sub­si­dies.

The de­fence comes af­ter in­dus­try sources warn the heavy-hand­ed ap­proach to con­tract ne­go­ti­a­tions could force sev­er­al down­stream man­u­fac­tur­ers off the Point Lisas In­dus­tri­al Es­tate.

Speak­ing to Guardian Me­dia on the side­lines of the CAF In­ter­na­tion­al Eco­nom­ic Fo­rum in Pana­ma last Wednes­day, Tan­coo re­ject­ed claims Ramdeen had be­come too pow­er­ful or was act­ing uni­lat­er­al­ly, in­clud­ing ac­cu­sa­tions he was the sole dri­ver be­hind ef­forts to ex­tract about US$28 mil­lion in retroac­tive port fees from Nu­trien.

“I don’t think Mr Ramdeen is a law un­to him­self,” Tan­coo said. “I think he’s ful­fill­ing his man­date. The Na­tion­al Gas Com­pa­ny is not sup­posed to be a gift to every­body.”

The com­ments come as the whol­ly State-owned NGC in­formed man­u­fac­tur­ers that it will in­crease the price of nat­ur­al gas be­tween 60 and 70 per cent by the end of Jan­u­ary, as it rene­go­ti­ates sev­er­al long-ex­pired sup­ply con­tracts at the Point Lisas and Union In­dus­tri­al Es­tates.

NGC has al­so raised the price of gas sold to its sub­sidiary Phoenix Park Gas Proces­sors Ltd by 38.66 per cent, from US$3.75 to US$5.20 per mil­lion btu.

Ramdeen has de­fend­ed the in­creas­es on the grounds that man­u­fac­tur­ers ben­e­fit­ed from heav­i­ly sub­sidised gas for more than a decade and, in some cas­es, paid prices be­low NGC’s own cost of ac­qui­si­tion.

“When you take a prod­uct for grant­ed, you don’t fo­cus on ef­fi­cien­cy,” he said. “No Gov­ern­ment be­fore took the de­ci­sion to bring gas prices up to pro­duc­tion cost.”

He al­so dis­missed claims con­sul­ta­tion was lack­ing, ac­knowl­edg­ing Ramdeen’s style had drawn crit­i­cism but main­tain­ing the di­rec­tion was clear.

“He may not be as diplo­mat­ic in how he says things, but he’s go­ing in the same di­rec­tion we need to go.”

Tan­coo ac­knowl­edged con­cerns from Trinidad Ce­ment Ltd (TCL) and oth­er down­stream man­u­fac­tur­ers over ris­ing gas prices, but said the in­creas­es are nec­es­sary to end long-stand­ing sub­si­dies that trans­fer tax­pay­er mon­ey to pri­vate com­pa­nies. He urged busi­ness­es to re­assess their op­er­a­tions and im­prove ef­fi­cien­cy.

Tan­coo said the Gov­ern­ment could no longer jus­ti­fy ask­ing tax­pay­ers to ab­sorb those sub­si­dies, es­pe­cial­ly in a pe­ri­od of tight gas sup­ply.

“I am be­ing asked to sub­sidise gas for a pri­vate sec­tor com­pa­ny,” he said. “Then I’m asked to pay twice, be­cause the gas could have been sold at mar­ket val­ue and gen­er­at­ed for­eign ex­change.”

He in­sist­ed prices would re­main in­ter­na­tion­al­ly com­pet­i­tive even af­ter the in­creas­es.

“Even with the ad­just­ment, the price they’re pay­ing is still low­er than in­ter­na­tion­al gas prices,” he said. “What we’re say­ing is sim­ple: pay a fair price for the prod­uct the State is pro­vid­ing.”

Speak­ing on a pan­el ti­tled The Growth Agen­da: In­vest­ment, Pro­duc­tiv­i­ty, and Pro­duc­tion, Tan­coo placed the gas pric­ing de­bate with­in a wider eco­nom­ic con­text, de­scrib­ing en­er­gy as a cru­cial but no longer dom­i­nant pil­lar of the econ­o­my.

He said the en­er­gy sec­tor con­tributes about 30 per cent of GDP, while the non-en­er­gy econ­o­my ac­counts for the re­main­ing 70 per cent, though en­er­gy re­mains one of the coun­try’s main for­eign ex­change earn­ers.

Tan­coo said many gas fields are now ma­ture, with nat­ur­al de­clines in pro­duc­tion, prompt­ing the Gov­ern­ment to roll out new in­cen­tives since tak­ing of­fice to en­cour­age deep-wa­ter drilling, on­shore ac­tiv­i­ty and the re­sus­ci­ta­tion of old wells.

As a re­sult, he said, com­pa­nies in­clud­ing Shell, BP, EOG and Peren­co have sig­nalled re­newed in­ter­est, with sev­er­al fi­nal in­vest­ment de­ci­sions al­ready tak­en.

“We ex­pect about two bil­lion stan­dard cu­bic feet of gas to come on stream from the end of this year in­to next year and go­ing for­ward,” Tan­coo said.

He said lessons from past oil booms shaped the cur­rent pol­i­cy ap­proach, point­ing to the dam­age caused by Dutch dis­ease when en­er­gy crowd­ed out oth­er sec­tors and left the econ­o­my ex­posed to price swings.

The cur­rent strat­e­gy, he said, us­es gas rev­enues to sup­port down­stream in­dus­tries and di­ver­si­fi­ca­tion, re­duc­ing re­liance on cycli­cal com­mod­i­ty prices over time.