Sahadeo defends VMCOTT

In the Senate yesterday, Sahadeo said she did not want to continue an argument about the items named in the Auditor General’s report, but had checked with the company, and the criticisms levelled against the company did not have a timeline and "appeared to cast some aspersions" on the current board. She said many of the payments occurred in the period prior to 2003. Sahadeo has asked "for a detailed analysis of concerns raised in the auditor’s report."

It was during Wednesday’s debate that Independent Senator Prof Ramesh Deosaran said rampant corruption was taking place at VMCOTT, and called for an investigation into the company.

Deosaran quoted from the Auditor’s General’s report (August 2000-September 2004) which stated that changing a tyre and washing a vehicle cost VMCOTT $500. He called for the entire VMCOTT board to resign.

During her contribution to the debate, Sahadeo justified the establishment of special purpose State enterprises which was lambasted by the Opposition United National Congress. While 15 companies fall under the category special purpose, Sahadeo said only five were newly created — the Rural Development Company Ltd, Education Facilities Company, Sports Company Ltd, and East Port-of-Spain Development Company Ltd.

"In addition to providing project management services, they will secure contractors and oversee the project execution completion certified expenditure."

Sahadeo said they will have a lean management structure and outsource some of these activities to the private sector. Responding to concerns raised about transparency and accountability, she said the company’s Act clearly outlines the duties of directors, and has codified the liabilities of directors while the White Paper on Procurement seeks to ensure all officials, departments and agencies are accountable for plans, actions, and outcomes involving public money.

While admitting that some State companies had losses, Sahadeo focused on profitability, touting the after tax profit of $3.2 billion for the State sector and the dividend to shareholders of $811 million. The National Gas Company saved a dividend of $475 million, $190 million National Enterprise Ltd, $125 million First Citizens Bank and $11.9 million National Petroleum Company.

Sahadeo said under the new oil tax regime, the Supplementary Petroleum Tax (SPT) will be computed on the gross oil crude income after royalty payments were deducted. She said this will allow the Government to plan ahead since "revenue recognition" will be more transparent. The SPT is based on the average crude price and is calculated quarterly. She said the cash flow will also improve and benefits would accrue to incomes and bottom lines.

Sahadeo said, "as oil prices increase, the Government will realise a greater share of that greater revenue.

"A company’s increase or decrease in exploration and development expenditure will not have an effect on the SPT." Prior to this she said substantial deductions were allowed for capital allowances and this made the STP calculations "anomalous."