TT:
The ghost of Frank Rampersad
By
William
Lucie-Smith
Trinidad
Express
POrt
Spain
Petroleumworld.com 01 08 05
When
times were tough Government had no alternative but to divest
itself of assets. The prime reason was to avoid further financial
losses, but divestment of profitable enterprises can also make
sense. Sometimes while profitable, the enterprise does not make
an appropriate return on capital or distracts Government from
its true mandate. Sometimes it is simply that the goods or services
can be provided more efficiently by the private sector.
In
the years following the 1980s oil boom many enterprises were
privatised or partially divested. Some of these are now very
successful under their new ownership like TCL, Ispat, T&T
Urea, Fertrin, T&T Methanol, Plipdeco and Trintomar. In
many cases the State was an essential catalyst to the initial
investment and privatisation became a logical development once
the business was mature. In most cases however, the Government
sold under distress conditions and did not receive the values
that might have been possible today.
Now
that money is no longer a pressing need, the Government appears
to have completely abandoned its divestment programme. I cannot
readily recall the last privatisation or any statements on privatisation
candidates or policy. There is no news on the promise (made
to the Stock Exchange and in the first prospectus) of further
sale of shares in NEL, and no discussion about further sales
of NFM, TSTT or other good candidates.
In
the late 1980s, I was privileged to serve on a Cabinet-appointed
Committee to consider the future of all State enterprises, chaired
by the late Frank B Rampersad. I say privileged not because
I like working for governments for no pay, but because of the
experience of working with Frank Rampersad.
Frank
Rampersad was a public servant of the old school. After a government
scholarship to the London School of Economics and a career in
the public service there were many who thought Frank dogmatic
and socialist, including me. It was a pleasure to discover what
an open and brilliant mind he had and like many gifted men he
was able to make complex matters appear simple. His writing
was always simple and clear. As his office was next door to
mine on Victoria Avenue, we spent many mornings discussing State
enterprises. Frank viewed State enterprises as necessary to
the development process but believed in a dynamic portfolio.
Once enterprises were mature they should be divested. The many
Rampersad reports not only reviewed all enterprises in detail
and the philosophy behind the ownership of enterprises, but
also reviewed issues like the composition of the board and corporate
governance generally.
Frank
would not be surprised that many of his recommendations are
valid today and still ignored. There is no philosophical underpinning
or strategy to the state enterprise network. The Government
still wishes to create companies "to bypass the bureaucracy"
without recognising its obligation to the modernisation of the
bureaucracy. The Government still seeks to sell only in a distress
and jealously holds on to the enterprises that are mature in
order to continue to control patronage.
It seems to me that at the peak of our boom and with monopoly
no longer a problem, it would be obvious that the investments
in TSTT and NFM should be sold. With oil and gas at a peak it
should also be the time to sell NGC, Petrotrin and Tringen.
The Government however, through NGC and Petrotrin, is actually
buying 30 per cent of the mature Tanteak, Samaan and Poui fields
from BP. The Government is also considering further investments
in aluminium smelters despite the widespread public outcry against
the proposed Alcoa plant. New investments should not be criticised
where they are required for developmental purposes. But the
energy sector is mature and the Government's role should really
be as a regulator and facilitator.
New
investment is required in healthcare and education both of which
are capable of making a return on capital. When the Mt Hope
Complex was built the vision was that it would become a world
class medical facility and attract patients from throughout
the Caribbean. The reality is that our Prime Minister chose
to go to Cuba for medical care, a choice not open to all of
us. What happened to the vision for Mt Hope?
Now is the right time for the Government to enter into a significant
divestment programme and reduce or eliminate our public debt
as well as re-invest for the future. The mature and profitable
enterprises can be sold at very good prices and the funds better
used elsewhere. This would also help promote genuine competition
in our industry for the benefit of all citizens. Let us not
hang on to these "crown jewels'' until they are devalued
and sold for scrap like Tanteak. The opportunities abound. In
his speech at the recent PNM conference the Prime Minister mentioned
sale of BWIA shares which again is more of a distress sale of
an unwanted asset. In my view the opportunities lie with Petrotrin,
NP, NGC, Plipdeco, NFM, TSTT, Lake Asphalt, Tringen, Phoenix
Park and the Port of Port of Spain. How I wish Frank Rampersad
were alive to give the Government some honest advice, like the
Ghost of Christmas past.
Trinidad
Express
Monday,
January 2nd 2006
Copyright © 2006 Trinidad Express.
All rights reserved
