TTEC owes $2.5B
By MIRANDA LA ROSE Wednesday, March 12 2014
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FACE THE MUSIC: From left, Victor Jones, deputy Permanent Secretary at the Ministry of Public Utilities, TTEC deputy chairman Aaron Henry, TTEC genera...
TRINIDAD and Tobago Electricity Commission (TTEC) has in excess of $2.5 billion in debts owing to among others, the National Gas Company (NGC), Trinidad Generation Unlimited (TGU) and British bank HSBC.
Admitting to a parliamentary Public Accounts Committee held yesterday in the J Hamilton Maurice Room, Office of the Parliament, Port-of-Spain that at present TTEC cannot manage its income and expenditure, General Manager Kelvin Ramsook said the state company has been running on an annual billion-dollar deficit and has applied for a rate review.
TTEC owes NGC $885 million; the privately-owned TGU, $600 million; the HSBC, $300 million and the remainder is owed in bonds. Asked by Independent Senator Dr Dhanayshar Mahabir whether TTEC has reached a settlement for its payments with the NGC, Ramsook said it has entered into an arrangement with the Public Utilities Ministry and Government in a $2.1 billion loan-agreement. The loan arrangement is over a seven-year period at three per cent interest effective from 2011, he said.
The main reason for the debt he said was due to the cash flows situation. “Whenever we fall short we hold back in paying NGC,” he said. Asked if maintenance of facilities is suppressed to meet cash demands, Ramsook said, “our maintenance and work are not affected by this arrangement. We don’t compromise on maintenance or major construction work that has to be done. I can assure the population that we have processes that look at maintenance for T&TEC for all our plants.”
Asked by PAC Chairman Colm Imbert how was it that T&TEC was allowed to owe TGU, Ramsook said in November 2012, he wrote his line ministry asking that Government invoke its guarantee to only pay for certain amount of megawatts of power until it can pay off its debt.
“I know that has not happened as yet,” he said noting that dialogue was taking place between TGU and various ministries.
Though it is a large sum owing, he said he has not received any indication of TGU holding back on the generation of power.
Deputy Permanent Secretary in the Ministry of Public Utilities Victor Jones explained that discussions were taking place with the Cabinet-appointed committee on the issue of outstanding monies.
“One good thing is that TGU is represented on the committee and is cognisant of the facts facing T&TEC at this time,” he said. Asked why TTEC was not managing its cash flow, Ramsook said it was a case of incomes versus expenditures.
“Expenditures would have gone up considerably in past years,” he said including generation, labour costs and the costs of doing business while our income aspect have had no major changes.”
It was automatic, he said that the company cannot balance its incomes and expenditures at this time. Wage negotiations last concluded in 2012 represented a 15 per cent increase or $100 million in that year’s labour costs, and an annual increase of $60 million annually.
Asked what TTEC was doing to increase its income, Ramsook said that it has applied to the Regulated Industries Commission (RIC) for increase in rates to cover its costs.
“We applied for a rate review and we have been making that request regularly, but we have received no positive response on that request,” he said. The deficit gap between revenue it received and expenses incurred in December 2013 was $136 million and from January to December 2013 it was a total of $928 million or an average of $1 billion according to TTEC Assistant General Manager - Finance Colleen Licorish.