Origin of and lessons from Petrotrin debacle

In short, notwithstanding that an enterprise might be predominantly owned and controlled by the State, there should normally be no fundamental difference between the overall objective of being a State enterprise and that of being a privately owned entity, ie, the profit motive.

Here, we should note that the origin of our State-owned enterprises sub-sector may be said to have been dictated predominantly — initially — by, inter alia, the assumed need to bring the “commanding heights” of the economy under State control and direction in the thrust towards national economic development. In this regard, the then privately owned foreign sugar and oil industries were clearly identified.

Unfortunately, there has been a bludgeoning of the bodies which comprise the State enterprises sub-sector (now approaching 100 in number), many of which can’t, on no account, “fit the bill” of being a classical State enterprise.

It has been said that many of these (questionable) bodies were established under the Companies Act in order to facilitate quick decision-making through their being enabled to avoid the mechanisms of the Central Tenders Board and perhaps even lessening their accountability to Parliament.

In any event, it is clear that, unfortunately, many have become havens of political patronage and more like dispensers of social welfare rather than being enterprises in the classical profit-making mold. Needless to say, it is within this context that the current situation at Petrotrin must be described as a “debacle”, that is, being in a state of a “calamitous breakdown, rout or collapse as an enterprise” (Lexicon Webster).

It seems clear that there has been a blurring of the difference between the status of being a State enterprise and that of being a statutory authority since the latter is established by an Act of Parliament with definite duties, objectives and obligations.

Furthermore, statutory authorities are subject to general and specific directions from the minister. This is unlike State enterprises, these being established under the Companies Act.

It should be noted that statutory bodies such as T&TEC and WASA which, according to their statutes, are required to be in at least a “break even” position taking one year with another, have been failing to meet their financial obligations, thus being a burden on the national Treasury.

I therefore postulate that what is required, in the first instance, is a complete “root and branch” review of the State enterprises sub-sector as well as of statutory authorities, with a view to (a) having genuine State enterprises classified as such and having as their prime objective the “profit motive” and (b) the necessity, purpose and future status of these bodies (including the statutory authorities).

Here we should note the view of the Prime Minister himself in foreshadowing the need for far-reaching decisions while focusing recently on the Petrotrin issue.

Errol OC Cupid Trincity, Tacarigua