Govt divests Sugar Manufacturing Company

Addressing the opening of the 2006 TT Petroleum Conference at the Hilton Trinidad, Sahadeo also indicated that steps would be taken to encourage more local private companies to become listed on the TT Stock Exchange. She said while an active Government investment strategy was necessary to correct certain market failures, "equally important to the success of that strategy is the divestment of State enterprises when they have matured and can be run efficiently by the private sector.

It is therefore important that we do not interpret Government’s divestment of State enterprises as a failure of Government, but as a necessary and complementary part of the process," she explained.

Noting that in 1992 there were 87 State enterprises and five public utilities that were "a severe drain on the public purse," Sahadeo said Government began the divestment of these companies in 1993, and today there are only 79 of them. Recalling that the now defunct Caroni (1975) Ltd was one State enterprise that placed the Treasury under strain, Sahadeo said Government decided to divest Caroni in August 2003 in light of the "dampened" international prospects for sugar, and established the SMCL. "Most recently, due to expressions of interest from the private sector, Government has recently taken decisions with respect to the divestment of SMCL and the Rum Distillers of TT (formerly Caroni’s rum division)," she disclosed.

Sahadeo subsequently told Newsday that Government decided to divest SMCL last month and tenders would be invited shortly.

While questions have been raised in the past about divesting First Citizens Bank (FCB), Sahadeo said FCB has been a success story since its establishment in 1993 and today is TT’s third largest bank with an asset base of $1.5 billion. She said the only question which remained was whether to privatise FCB, or extend its role to a development bank.

Outlining Government initiatives to develop the capital market, Sahadeo expressed concern that there was an "inadequate number of companies" now listed on the stock exchange. Noting that concerns such as onerous disclosure requirements may prevent some private companies from going public, Sahadeo said discussions will be held to encourage the private sector "to play a greater role in the domestic capital market."

Reiterating that Government will soon bring legislation to Parliament to formalise the Heritage and Stabilisation Fund, Sahadeo said the fund’s balance stood at $5,484.5 million at the end of January. She added that Government has budgeted to transfer a further $1,862.8 million to the fund and this will bring the estimated balance of the fund $7,347.3 million at the end of fiscal 2006.