T&T ‘wins’ $1.3b. settlement
PORT OF SPAIN — An arbitration between UK-based BAE Systems and Trinidad and Tobago over the cancellation of an order for three offshore patrol vessels has been settled in this country’s favour for the sum of $1.382 billion.
That’s $272 million less than what the State was seeking when it filed a counter-claim during the two-year-long negotiations.
After the People’s Partnership Government cancelled the OPV order on September 16, 2010, BAE Systems initiated arbitration proceedings hoping to recover $611.032 million from the State as it had taken a 100 million pound sterling charge on its books.
In turn, T&T had issued a counter-claim of $1,654 million for the boats, which were valued at 155 million pounds.
Describing the outcome as “victorious”, Attorney General Anand Ramlogan said this country had demonstrated that it is serious about business and it is no “third world banana republic”, in which international companies can “simply come and get away with murder”.
He was speaking at a media briefing at his Cabildo Chambers in Port of Spain yesterday after BAE, which is a publicly-traded company on the London Stock Exchange, posted news that a settlement had been reached “at an amount consistent with provisions held”.
However, Ramlogan insisted Trinidad and Tobago would not have to pay “one red cent” to the British company.
Two weeks ago, Ramlogan said he had tabled a note to Cabinet on whether the Government would accept the $1.3 billion from BAE, with the recommendation that the Government not pay any sums to BAE.
Ramlogan said the Government’s first act, after it receives the first of two tranches of payment in January 2013, will be to settle the multimillion-dollar loans to BNP Paribas and Lloyds, which the People’s National Movement government took to buy the OPVs.
He said the balance of $1,042 million on the loan, if settled early, could save the state $57 million in interest.
After repayment of the loan, the Government will have $340 million, which Ramlogan said will be handed over to Finance Minister Larry Howai to use at his discretion on budgetary promises.
He said the Government was also able to save the country money in two instances – first, a $32 million recurrent expenditure of maintaining the OPVs annually and, second, out of an estimated legal bill of 7 to 8 billion pound sterling for the arbitration, the Government had only spent about 1.5 to 2 billion pound sterling.
At the same time, the Attorney General could not say how much money has been lost on the OPV deal because of “abysmal” record-keeping.
“Some of the expenditure was lost in the cracks of the projects, given the span of time. Large crews were housed in Great Britain and were receiving training. There were costs– infrastructure created to accommodate the OPVs, etc. A lot of money was spent,” he said. (Express)