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Symmonds accuses DEMS of secret move to complete BNTCL sale

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Symmonds accuses DEMS of secret move to complete BNTCL sale

Unread post by bimjim » Fri Feb 16, 2018


‘DLP plot’
Symmonds accuses DEMS of secret move to complete BNTCL sale
George Alleyne
February 15, 2018.

The Opposition Barbados Labour Party (BLP) is accusing the Freundel Stuart administration of plotting to bypass the ruling by the Fair Trading Commission (FTC) on the sale of Barbados National Terminal Company Ltd to the Sir Kiffin Simpson-led Sol Group.

The BLP’s Kerrie Symmonds said in Parliament yesterday that he had evidence Government was contemplating changing the law so the sale could proceed, despite the FTC’s ruling on November 28 last year that the deal could not go through in its current form because it was “anti-competitive, restricts competition or potential competition”.

In fact, during debate on the Estimates of Revenue and Expenditure for 2018 to 2019 Symmonds claimed to have had a copy of a January 19, 2018, letter from Sol to the ministries of Finance, Energy, and Industry and International Business, seeking confirmation on a draft legislation.

According to Symmonds that letter also asked about confirmation on implementation of a moratorium, something the FTC had rejected.

“If there is a request for draft legislation, it would suggest to me that there is an intention or some discussion about having legislation which would do that which the Fair Trading Commission said should not be done,” the BLP parliamentarian said.

In a bid to prop up tumbling foreign exchange reserves and close the gaping fiscal deficit, Government last year agreed to sell the statutory corporation to Sol for US$100 million – a decision over which Sol competitor, Rubis, has gone to court, challenging the inclusion of a 15-year moratorium clause in the agreement between Government and Sol for the merger.

The clause prohibits the construction of another oil terminal in Barbados, as well as the granting of licences for the storage of fuel, aviation fuel and jet fuel for the commercial and industrial purposes.

The FTC, which had also been looking at the deal, later ruled that the deal could only go ahead if certain conditions were met, such as a stipulation that there could be no 15-year moratorium on the construction of new terminal facilities.

The regulatory authority also rejected Sol’s call for a 32 per cent pre-sale increase in throughput fees at the Fairy Valley storage site on the basis that it could impinge on the provisions of the Fair Competition Act, which prohibits post-merger increases in prices.

“Higher throughput fees charged post-merger may provide a sufficient cushion for Sol to engage in anticompetitive tactics in any of its downstream operations, which could potentially have a negative impact on consumers,” the FTC had said.

With the controversial deal, there were also concerns that costs would likely be passed onto consumers and that Sol could end up with an energy monopoly.

Despite this ruling, Symmonds claimed, “a letter is being directed to the Minister of Finance asking for confirmation of the implementation of the moratorium by the Government”.

The letter as read by Symmonds also sought confirmation of a proposed 32 per cent increase on throughput fees for gasoline and diesel.

“If the Government is saying that they are going to go behind the Fair Trading Commission and legislate what they wish to legislate in spite of the commission’s protection of consumers in Barbados . . . then the Government must come clean and say, ‘we are turning our back on the Fair Trading Commission and we are going do what we want to do through Parliament,’” the Member of Parliament for St James Central said.

“If Government’s intention is in fact to take the step of legislating its way so as to ensure that the transfer of the BNTCL to this particular company is done, then Government has to be mindful of the Opposition’s position” that there must be “a Barbados which is characterized by fairness in the marketplace”.

Minister of Commerce and Industry Donville Inniss was quoted earlier this month as saying efforts were under way to salvage the BNTCL sale.

However, while there was no information on the efforts, the minister is reported to have stressed that any such divestment “must be” done under FTC rules, with his preference being an arrangement that includes both Sol and Rubis.

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