JSC warns TTEC over $660M debt

The Joint Select Committee (JSC) of Parliament, which oversees Government ministries, yesterday chided the Trinidad and Tobago Electricity Commission (TTEC) for accumulating a debt of over $660 million. At the Red House yesterday, the JSC held a public hearing into the operations of TTEC, WASA and the Solid Waste Management Company Ltd (SWMCOL) which all fall under the Ministry of Public Utilities. In the presence of the ministry’s Permanent Secretary, Anthony Bartholomew, and TTEC general manager, Denis Singh, JSC chairman, Independent Senator Parvatee Anmolsingh-Mahabir, criticised a TTEC Status Report submitted to the JSC for scrutiny. She slammed: “This report conceals more than it reveals.”  Mr Bartholomew, the Committee members are in the dark as regards several areas of the report.” Noting the report contained TTEC’s financial statement just for 2000, she remarked: “There is a total blackout of information on the financial reports for the years 2001, 2002, and 2003.”

She urged that the JSC be given a statement of TTEC’s revenue and expenditure for a period of up to ten years. “This report shows TTEC is incurring losses at an alarming rate.” Anmolsingh-Mahabir traced how TTEC’s debt had increased in recent years. TTEC’s accumulated debt was $645 million in December 2003, $669 million in May 2004, and by year end was predicted to grow to $720 million, she warned. “What are the implications of this for your customers? Must they expect a rate increase? Have you applied to the Regulated Industries Commission (RIC) for an increase in your rate?” TTEC GM Denis Singh remarked that since 1984 the company had never received a subvention from the Government, but in fact paid some $100 million in VAT to the Treasury each year. “We are not a burden on the State,” he said. Singh also noted that TTEC had cut the losses it incurred each year, from an operating shortfall of $121 million in 2001, to $56 million in 2002, and to $27 million in 2003.

He said the accumulated deficit had been built up over many years. Perhaps dropping a hint, he remarked that TTEC had much work to do to build its infrastructure for both its generative capacity and transmission/distribution network. Singh said that TTEC had not applied to the RIC to increase its rates. He explained how TTEC had incurred such debt. “For every unit of electricity we sell, we are losing money. You earn less than it costs.” Some 70 percent of TTEC’s operating costs, he said, were paid to its suppliers of electricity and natural gas namely PowerGen, Trinity and National Gas Company. TTEC had no control over these costs, he said. Singh disclosed TTEC was obligated to a $500 million bond it took out in 2001 and had to repay at a fixed interest-rate of 12 percent annually, and to a $200 million bond taken out in 1994 at an interest rate of eight percent. The JSC chairman Anmolsingh-Mahabir told Newsday to be careful about the trend of showing losses annually. “We are scrutinising their books, seeing losses, and saying ‘Take stock!’”