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Secretaries Answers to Questions

FULL VIDEO


Financial Assistance - Tobago Hotels

The Minority Leader asked the Chief Secretary and Secretary of Finance, Trade and the Economy, the following question: 

“With respect to assistance given to any hotels on the island from the Division of Finance, Trade and the Economy, can the Secretary provide the following:

(a)  Name of hotels, if any?

(b)  How much was the total assistance given, if any?

(c) What was the qualify criteria?”

 Thank you, Madam Presiding Officer.  I wish to point out that no assistance was given from the Division of Finance, Trade and the Economy. So the answer to that question is, none.  However, I believe the Minority Leader maybe, is trying to find out about the assistance given to hotels concerning their bill with the Trinidad and Tobago Electricity Commission. That was done by TITAL.  I will like to offer the information nonetheless, if that is okay.

In a letter dated January 24th, 2022, the head of the Tobago Hospitality of Tourism Association, Mr. Chris James, co-wrote the Chief Secretary and the Secretary of Tourism, Culture, Antiquities and Transportation, detailing the worrisome threat of closure due to the none payment of reserve capacity rate fees by medium to large sized hotel plants on the island.  These reserve capacity charges accrued significantly during the COVID-19 period lockdown of almost two years.

          For those unaware of what the reserve capacity is, the reserve capacity is a backup energy generation capacity that is used by the electric grid in the occurrence of an unexpected fault such as the unavailability of a power plant.

  The Trinidad and Tobago Electricity Commission (T&TEC) determines the reserve capacity by looking at the load detail or the types of equipment present on the premises of the customer - in this case, the hotels.

Essentially, those required to pay the reserve capacity are industrial customers. 

The reserve capacity provided by T&TEC based on their policy, is equal to the customer’s highest monthly KVA or per thousand volts amps demand. 

This rate, once determined, is paid monthly, regardless of the consumption for that month.  For example, if a hotel has a rate of thirty thousand dollars ($30,000) reserve capacity per month, whether that capacity is tapped into or not, that rate is attached to their bill. 

During the COVID-19 pandemic lockdown for over two years, hotels were required to pay this rate.  After much discussion with the Board of T&TEC, the CEO of T&TEC, and the Minister of public Utilities, it was determined by T&TEC that they will not waive the reserve capacity rate for the Tobago hoteliers.  So, the qualifying factor was that the hotels had to have this reserve capacity bill wrapped up over the COVID-19 period. 

Almost one year later, on December 12th, the Tobago Tourism Institute Agency Limited (TTAL) was forced to jump into action as T&TEC was about to disconnect the second largest hotel on the island, owing to the non-payment of this reserve capacity rate.  I will now present what the total costs were.

    The Tobago Tourism and Hotel Association, through its membership, sought to find out those that were affected.  A total of six hotels were presented.  The Tobago Tourism Agency Limited (TTAL) proceeded to verify the figures with T&TEC.  When verified, five of the six establishments had outstanding bills. One of the six had in fact, paid their bills and therefore, TTAL paid the reserve capacity rates for the following hotels:


1:56 P.M
  • The Mt. Irvine Bay   Hotel;

  • The Star Fish or   otherwise known as ‘Long Beach Hotel;’

  • The Rovanel’s Resort,

  • The Grafton Beach   Resort; and

  • The Halfmoon Blue   Resorts Limited, or what some will know as ‘Bacolet Beach Club.’


The total sum was two million, one hundred and seventy-three thousand, five hundred and twelve dollars and fifty-four cents ($2,173,512.54). The one (1) hotel whose name was submitted, but when TITAL checked with T&TEC, it showed that they that no outstanding balance, was the Crown Point Beach Hotel and therefore, nothing was paid on behalf of that hotel.

Madam Presiding  Officer, given that we were told by the Secretary of Tourism, that during the Carnival, the revenue particular with respect to the hotels was something   upwards of three hundred million dollars ($300m), what was the need if the hotels would have had so great a season? They had such great revenue, that Tobago   taxpayers’ hard-earned money was used to bail out these hotels, that were   told did so well in October?

Madam Presiding Officer, the hotels had one (1) single   period, not even a season, but one (1) single period of good occupancy owing   to the Carnival. That figure quoted by the Secretary of Tourism, I believe,   Madam Presiding Officer, spoke to how much the entire space made, not just   specifically hotels on the island.

     One would also   appreciate that with two (2) years of lock down, it meant that these hotels   continue to incur debts, because they have their long-standing debt to   service, while at the same time not having any customers.

I must also add that it is not yet one (1) year since the   Tobago economy is fully reopened.


     You may recall, Madam Presiding Officer, that it was only in Easter or April of last year, that Tobago returned to half the pre-COVID-19 number of domestic flights and only   in January of last, that we resumed international flights - one (1) flight.   So we are not a full year yet to April, when our economy in Tobago was   considered fully reopened for the Tourism sector.

     You will also   recall that in January last year, we were still debating and pushing about   reopening our beaches so that we could have reopened the sector. Given the   fallout from COVID-19, the THA, this Administration could not allow these   hotels that are significant in size, to go down because of the reserve   capacity charges, which quite frankly, should not have been levied against   them because those charges, during the COVID-19 period, were unfair charges.

Madam Presiding   Officer, it is no secret that the Member or the Chairman of the Tobago Hotel   Tourism Association also happens to be an ex-officio member of the   Tobago Tourism Agency Limited, and the Chief Secretary would have quoted a   letter coming from that Organization. My question is, 1, whether that member was   part of the TTAL’s decision, because what would arise, is a clear conflict of   interest in terms of having a sitting member of TTAL taking to the Board, a   policy to have some direct benefit for himself.

Member, I do not think I heard the question.

Madam Presiding Officer, the question is whether the Chief   Secretary and the Executive considered the issue of conflict of interest in   this matter?

Thank you, Madam Presiding Officer. You will note that I indicated   that the letter that came from the head of the Association was dated January   24th, 2022. That was well before even TTAL was formed. The Tobago   House of Assembly started this discussion, started having the considerations with the Trinidad and   Tobago Electricity Commission   (T&TEC) prior to the formation of the current Board of TTAL. That is the   first thing to be noted.

Secondly,   certainly the possibility of a conflict of interest was considered. It is for   that reason that all due diligence were done by checking in with T&TEC   who provided the rates, as opposed to getting it directly from the hotels   themselves. However, the principle stands. Were we to allow these hotels to   be closed, to be shut down by T&TEC, or were we to save them? That was   the ultimate question considered and this Administration decided to move in   the affirmative.

MR. K. MORRIS: Madam   Presiding Officer, I quite admire the Chief Secretary’s use and application   of words, but the question is simple and it was simply, was this gentleman   who is also the leader of the Tobago Tourism Hotel Association, part of the   decision? What we were told, is that this decision came from the Tobago   Tourism Agency Limited of which he is an ex-officio member. So the   question, I am simply asking is, was he part of the decision? Yes or no?

Thank you, Madam   Presiding Officer. That actually was not the question asked before. So thank   you for a new question. Yes, he was part of the decision.

If he was part of the   decision and the previous question was whether there was an issue of   confliction, then I cannot see how come the issue of conflict does not arise.

Is that the question?

Well, Madam   Presiding Officer, the last time I checked, he is one (1) member of a Board   with several other Board members. As indicated, all the due diligence was   done. All the checks were made with T&TEC before TTAL made a decision   almost one (1) year later, from the date that the request came from the   hoteliers.

We have three (3) questions ...

You said that the last time...

But, Madam   Presiding Officer...

Minority Leader.

You can pose your questions at the next Sitting for oral response. Next question.

MR. KELVON MORRIS (Minority Leader) asked the Chief Secretary and Secretary of Finance, Trade and the Economy, the following question:

“As it relates to the bailout of businesses by the Tobago House of   Assembly, can the Secretary confirm the following:

  •  (a)  Whether any financial assistance was given to Tobago Taxi    Cab  Coop Society Limited or any other similar entity in 2022?

  • (b)  What was the amount of the assistance disbursed?”

Thank you, Madam Presiding Officer.

The Tobago Taxi Cab Co-operative Society in 2022, requested financial assistance from the Tobago House of Assembly. Such a request was sent before the Venture Capital Fund Limited, Business Development Unit and the Co-operative Unit of the Division of Finance, Trade and the Economy. The decision was taken, that an injection of seven hundred thousand dollars ($700,000) into the operations of the Company be done. That is loan, monies to be repaid as per a contract signed by the Tobago Taxi Co-op Society. The contractual arrangement also allows the Venture Capital Fund Limited, to be the executing agency, to provide a member that will sit on the Board of the Tobago Taxi Cab Coop Society, to provide auditing services, external auditing services and to direct the company thereafter.

Can the Chief Secretary give a bit more detail as to the terms and conditions of this loan? How long the loan is for and at what interest rate? Of course, we would want to know at whose cost this auditing/ external auditing is being incurred. Is it the cost of the Tobago taxpayers or is it the company’s?

Madam Presiding Officer, I do not have a copy of the contract before me. Additionally, I wish to be cautious as to whether or not the contract as it is, can be just released publicly, but certainly, I can ask the Venture Capital Fund Limited to provide a response guided by legal advice.

1:50 P.M.

Minority Leader.

Is the Chief Secretary telling the people of Tobago that monies utilized, that is owned by the people of Tobago, that he is so not guided to give details of such?

Just to repeat. I do not have the contract in my presence, and therefore, I cannot give the detail of the terms of that contract. I am also saying further, that any release of such contract by me, and or agencies of the Tobago House of Assembly (THA) must be legally guided. I can ask the Venture Capital Fund Limited, with whom is charged to manage this particular portfolio, to provide additional details to the Minority Leader.

13th Plenary Sitting Tobago House of Assembly 2021 - 2025 Session

TOBAGO HOUSE OF ASSEMBLY

26 January 2023
Supplemental question to the main question :
REVISED
UNREVISED
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