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T&TEC owes NGC $3.5b
The T&T Electricity Commission owes the National Gas Company US$516 million (TT$3.5 billion), another $15.9 billion was paid out through multiple dividends in one year and millions of dollars of taxpayers’ money was mismanaged via unnecessary community projects from 2012 to 2015.
These issues have significantly weakened NGC’s financial structure and put it in a state from which it is still trying to recover, the company’s president, Mark loquan, told a Public Accounts (Enterprises) Committee meeting yesterday.
During the meeting in Parliament, Loquan told the committee, chaired by Wade Mark, that there has been no revised agreement between T&TEC and NGC since 1994. The bill still to be paid by the energy supplier was equivalent to TT$3.5 billion, he said. He said T&TEC has not been making payments on a regular basis, hence the reason for the hefty arrears.
But Loquan said solutions for a new contract agreement were now being explored, but final prices were yet to be determined.
“The T&TEC contract has not been in place since 1994, so this is an area where NGC continues to supply gas for power and has not been able to receive payments on a regular basis and has led to arrears and underpayment back to the NGC for gas,” Loquan said.
Regarding exorbitant dividend payments which were made when Indar Maharaj was president, chairman Gerry Brooks told the committee dividends were paid 11 times in some cases during one year.
“The company paid in 2012 $1.2 billion, in 2013 $4.2 billion, in 2014 $ 3.79 billion and in 2015 $6.8 billion,” Brooks said.
“The profit in 2012 was $4.42 billion after tax and the dividends paid $4.2 billion. In 2013, $3.7 billion in dividends was paid...the profitable tax is $3.8 billion. That is a clear violation of the State Enterprises’ Manual by the then directors.”
Brooks said in 2013 there were 11 dividend payments, eight in 2014 and a “significant “ number of payments in 2015. In comparison, for the period 2009 to 2011, $1.17 billion was paid in dividends.
The committee also heard that $90 million was spent on a strategic plan for 2016 to 2020 under the pervious administration. When asked to identify the company which was awarded the contract for the plan, Brooks said he preferred to put this in writing.
Brooks and the new board members took up positions in late September 2015. Yesterday, he said his new executive was finalising a strategic plan for 2017 to 2020.
The committee was also told that wages and salaries moved from $338 million to $623 million between 2014 to 2015. Total staff cost was also increased from $433 million in 2014 to $ $750 million in 2015. The NGC has 1047 employees.
VP, Finance and Information Management Narinejit Pariag said salaries and compensation costs increased during that period, as there was a lag of market adjustment.
The company also received $4.5 billion in claims directly related to gas curtailment in the 2010 to 2015 period, which NGC is currently challenging in court. Regarding penalty provisions so that NGC could also sue conglomerates for shortfalls, Brooks said “a root to branch” review of such agreements was needed.
The committee also heard that company’s general budget for community expenditure was $22 million in 2011 but in 2012 rose to $40 million, $53 million in 2013, $81 million in 2014 and $73 million a year later. This represented $247 million over a four-year time span. On top of this, the committee was told the company spent $370 million on roadworks and upgrade of recreational facilities, which had nothing to do with NGC’s core business.