Finance Minister Colm Imbert says the former PP government raided the National Gas Company (NGC) of almost $14 billion in cash. He made the claim while presenting three motions for debate in the House of Representatives yesterday.
The motions seek to increase the ceiling for government borrowing by $50 billion under the Development Loans Act, External Loans Act and the Guarantee of Loans (Companies) Act.
Imbert said the former prime minister Kamla Persad-Bissessar’s government increased the borrowing limits under the legislation by $32 billion in 2011.
Imbert said when the limits were increased the then government said it would not use all the funds. He said the former government used $28 billion out of the $32 billion.
“Only $4 billion left out of that 32 billion,” he added.
Imbert said, “Instead of seeking to further increase the limits they raided the NGC. They took $1.5 billion in 2013, $1 billion in 2012, $4.5 billion in 2015...They raided the NGC of almost $14 billion in cash. They went into the NGC bank account and took out $14 billion and used it for recurrent expenditure with no proper procurement.”
He also said the former administration “consistently went into the overdraft at the Central Bank, they raided the overdraft, they wiped out that whole $6.5 billion and then used up the entire $9 billion overdraft limit.”
He said, “They took $14 billion from the NGC in cash, they took $16 billion in cash from the Central Bank from overdraft and then they borrowed $28 billion...$58 billion, and rather than telling the Parliament what they were doing, they hid it from the country.”
Imbert said deposits in the Green Fund ($3.7 billion) and the Unemployment Fund ($8.3 billion) have been “pledged as collateral against the overdraft and they have borrowed against it and now those funds are not available to people of this country.”
Imbert said there was now no access to the Funds. “They have mortgaged the Green Fund, they have mortgaged the Unemployment Fund. So $8.4 billion in the government’s Unemployment Fund cannot be touched, so they mortgaged it.”
He told legislators, “With the continuing need for rolling out debt finance infrastructure as well as for meeting budgetary purposes, the Government must pursue a debt strategy which is sustainable and flexible.”
If those objectives were to be achieved, Imbert said, “The Government must create head room under the existing pieces of legislation to maintain a range of borrowing options in sufficient amounts so as not to unduly limit the country’s ability to make financing decisions which would minimise both the cost and the risk of the debt portfolio as well as ensure that the total public debt does not exceed sustainable limits.”
The minister added, “This debt strategy cannot now be implemented given that Government is constrained by the absence of adequate head room under the three pieces of legislation which permit it to borrow.”
He said the new strategy “will allow the Government to streamline its interactions with financial institutions which provide the financing requirements not only for the Government but for state enterprises and statutory authorities and also to adhere to best practices at managing its debt profile.”
He said the Government intended to ensure that T&T’s debt portfolio remained within international benchmarks as measured by the debt to GDP ratio.
He said in 2015 under the former government, “$1.8 billion in new loans have been contracted; Couva Children’s Hospital $1 billion.”
He said, “There were several new loans which were in the final stages of negotiations, prior to the Sept 7 election, which this Government is now saddled with. They just borrowed like they were going crazy.”
Imbert added, “In 2015, under the Guarantee of Loans Act, several loans in an amount of $1.3 billion are under review and Letters of Guarantee may or may not be cancelled.”
He said the current debt to GDP ratio of 46 per cent reflected an outstanding debt amount of $76.5 billion. “This amount is in excess of the statutory limit under the three pieces of legislation that exists at present,” the minister added.
He said the new Government did not view the proposed increase in the ceiling limit as a licence to borrow indiscriminately.
According to Imbert, the Government was seeking to increase the total limit by $50 billion via:
• The Development Loans Act from $30 billion to $45 billion
• The External Loans Act from $15 billion to $30 billion
• The Guarantee of Loans (Companies) Act from $25 billion to $45 billion
Also in Parliament yesterday, the Government and Opposition paid glowing tribute to founding member of the PNM Kamalludin Mohammed who died on Tuesday night at the age of 88. Imbert and Opposition MP Dr Fuad Khan were high in their praise for the contributions made to this country by Mohammed. He was awarded the country’s highest award, the ORTT, and he was also a recipient of the Order of the Caribbean Community. The House observed one minute’s silence as a mark of respect for his passing.