Address by the Hon. Kamla Persad-Bissessar at UNC Monday Night Forum – GRAND BAY PAPER PRODUCTS LIMITED
I want to turn attention to the Grand Bay deal with the PNM Government which I mentioned Friday during the Mid-Term review.
The MOF indicated that the PNM Government plans to guarantee a US$5 Million loan (or TT$32.95 Million), through the EXIM Bank to a Trinidad company called Grand Bay Paper Products Limited.
The moment Keith Rowley told the Parliament “the Government didn’t guarantee a loan for a private company, it was the EXIM Bank that did it” I realised that the Rowley government intends to distort, hide and misrepresent the facts of this deal.
It is as if they are handing money to a private company and saying – hey don’t worry, it’s ok if you don’t pay it back, we got it, we guarantee it.
I wish we could all be so lucky.
PM, this is a very simple situation, if Grand Bay defaults on the loan then taxpayers will have to foot the bill.
On Friday, in Parliament it became clear that the PM didn’t know the basic facts of this deal and he was trying to hide from them.
But they can’t hide from the truth!
He didn’t know that his Minister of Finance indirectly approved a loan for a company that has borrowed from four financial institutions.
He couldn’t say the last time the company was audited, what its possible contribution to the economy amounts to, whether it is affiliated to any local business interest apart from Trinidad Tissue, or how he confirmed that there are in fact 400 employees.
It’s okay PM, since you don’t know the things you should know, I will continue to educate you on this matter.
Grand Bay is owned by a company incorporated in St. Lucia named Grand Bay St. Lucia who bought and renamed a Trinidadian company called Unicell Paper Mills Caribbean Ltd. in 2009.
To date no one knows who are the shareholders of this St. Lucian company and who therefore stands to directly benefit.
All the directors of Grand Bay are foreigners.
In 2009 Grand Bay St. Lucia also purchased a majority of shares and in 2013 became the sole owner of a company named Trinidad Tissues Ltd.
We have discovered that these companies have links to companies in Aruba, Canada, the United Kingdom, Panama, Venezuela, and Colombia.
It appears that Grand Bay St Lucia is most likely owned by a company out of Aruba named Grand Bay International and that the Aruba company is further owned by other international companies.
Grand Bay is currently carrying debt liabilities in excess of US$54.5 million (or TT$359.1 Million), and Trinidad Tissue is carrying debt liabilities of over TT$37.5 million.
This adds up to almost $TT400 Million of debt owned by Grand Bay St. Lucia and now they want to borrow more.
What the PM didn’t tell you and what the public should know is Grand Bay already had a past deal with the EXIM Bank.
Grand Bay entered into a working capital agreement with EXIM Bank worth more than US$8.1 Million in 2009.
The agreement was modified in 2012, for EXIM Bank to loan even more money to Grand Bay.
Grand Bay currently has four loans – with the International Finance Corporation, RBTT, First Citizens Bank and Exim Bank.
Something else the PM didn’t tell you that you should all know is that the collateral for all four loans is land leased by Grand Bay from the GOVERNMENT .
Grand Bay then called Unicell obtained a 99 year lease from TIDCO for lands in Arima February 2003.
We must ask what happens to this leasehold land if the Grand Bay defaults in its government guaranteed loans???
Grand Bay’s debt burden has steadily increased since then, from US$41.9 Million (or $TT276.1 Million) in 2009 to US$54.5 Million (or TT$359.1 Million), in 2015.
So what we have is a company that is heavily indebted, affiliated to a Trinidad Company also heavily indebted, with increasing debts and a history of being granted lands in Arima by a former PNM Government as far back as 2003.
Today, the company’s debts have become so high that the only way Grand Bay could obtain a loan from the EXIM Bank was through a Government guarantee.
It further appears that Grand Bay will get a loan in US Dollars and pay back the loan in TT Dollars. Is this a wise use of our already limited supply of FOREX??
This sounds like a bad deal for the taxpayers of Trinidad & Tobago and PM Rowley doesn’t seem to know anything about it.
There is something even more disturbing about this deal – there is no existing law that permits the Government to guarantee loans to private actors.
EXIM Bank loans money to private actors, but it is not accepted practice for the Government to guarantee EXIM Bank loans to private actors.
Now we come to things that only the PM can tell us.
In the absence of law or any official Government policy for guaranteeing loans to private actors we must ask the following questions:
How much monies have been set aside in the budget for the guaranteeing of loans for private actors?
What is the application process for a private actor to apply for a loan guarantee from the Government?
What was done in the Grand Bay case?
What is the criteria by which the Government will approve a loan guarantee for a private actor?
What criteria did Grand Bay meet?
What will Grand Bay do with the money?
Does the Government have any recourse if Grand Bay does not spend the money as promised?
Is the Government sure that US$5 Million (or TT$32.95 Million) is enough to save Grand Bay which is a drop in the bucket when compared to debts of US$54.5 Million (or TT$359.1 Million)?
If Grand Bay defaults on its loan with EXIM Bank, will the Government guarantee further loans to Grand Bay?
The Rowley government is playing fast and loose with the peoples’ money and pretending he doesn’t know anything.
This is not good enough.
We will continue to investigate this matter and tell the citizens exactly the kind of deal the PNM has mortgaged the people of Trinidad and Tobago!
This is what happens when the PNM is in office – incompetence, callousness and concerted distortion of facts.
PM Rowley is jumping out of his seat saying it was to save 400 jobs, but what about the 5000 jobs that he promised would be saved, but were lost right here at home?
Arcelor Mittal twice requested meeting with Rowley’s Labour Minister to discuss the “possible” closure of the company, because she was too busy.
They had a beach party and retreat in Tobago, so the jobs of citizens weren’t important enough for the PNM to respond.
It is only when almost 700 people lost their jobs that she started coming up with one hair-brained scheme after another to appear that she was doing something.
But very quietly, an unknown company, with very high levels of debts, outstanding loans from four Banks, a history with the PNM, and unable to borrow without a guarantee…that is what attracted the attention of the Rowley government.
Corruption has begun! And every time they tell you to sacrifice, I want you to remember this!
We are all accustomed to sacrifice, but what we will not do is tolerate inept politicians, incapable of managing an economy, bungling stability and then telling us to pay the price for it!