“It is on­ly non-trans­fer­able tax cred­its that are giv­en to oth­er com­pa­nies mak­ing in­vest­ments, and these non-trans­fer­able tax cred­its can on­ly be used to off­set tax on in­come from their own op­er­a­tions, and can­not be used by oth­er un­re­lat­ed com­pa­nies and there­fore do not rep­re­sent any fi­nan­cial out­lay on the part of Gov­ern­ment,” he said

Im­bert said the prob­lem with a trans­fer­able tax cred­it is that it was not linked in any way to the ac­tiv­i­ties, in­come or op­er­a­tions of the com­pa­ny in­volved and is in ef­fect a form of cash or rev­enue fore­gone

“A trans­fer­able tax cred­it can thus be sold on the open mar­ket for cash and is a le­gal and bind­ing oblig­a­tion of the Gov­ern­ment, which in this case would have no re­la­tion­ship or con­nec­tion to the restart or op­er­a­tion of the Re­fin­ery,” he said

Im­bert said that as a re­sult, whether the re­fin­ery was restart­ed or not, the pro­posed trans­fer­able tax cred­its would be sold for cash

“Sim­ply put, the fun­da­men­tal con­di­tion­al­i­ty in the fi­nanc­ing pro­pos­al from Cred­it Su­isse was that the Gov­ern­ment was re­quired to is­sue to Cred­it Su­isse, through Pa­tri­ot­ic, US$750 mil­lion in ful­ly trans­fer­able and trade­able tax cred­its in ex­change for the US$500 mil­lion that would be paid to Trinidad Pe­tro­le­um Hold­ings for the Re­fin­ery and Paria,” he said

The Gov­ern­ment, Im­bert said, was re­quired to give Cred­it Su­isse US$750 mil­lion in ful­ly trans­fer­able mon­ey mar­ket in­stru­ments, “which in­stru­ments Cred­it Su­isse had stat­ed up­front that they planned to sell on the open mar­ket.”

“Pa­tri­ot­ic would then get the Re­fin­ery and Paria for free, hav­ing put up no mon­ey, col­lat­er­al or se­cu­ri­ty and could mort­gage the Re­fin­ery and Paria as they saw fit,” he said

“This was not what was en­vis­aged or stat­ed when the Re­quest for Pro­pos­als for the sale or lease of the Re­fin­ery was is­sued in 2019. It is al­so com­plete­ly in­con­sis­tent with the gen­er­al cri­te­ria and con­di­tions as­so­ci­at­ed with the pro­cure­ment process for the dis­pos­al of the Re­fin­ery and cer­tain­ly not in the pub­lic in­ter­est.”

This crit­i­cism of Pa­tri­ot­ic comes af­ter both Im­bert and En­er­gy Min­is­ter Franklin Khan de­fend­ed their de­ci­sion to award the RFP to Pa­tri­ot­ic to take over the re­fin­ery

Back in 2019 when asked how the months-old Pa­tri­ot­ic was able to af­ford the re­fin­ery, Im­bert said that the com­pa­ny was cho­sen be­cause it pre­sent­ed the most lu­cra­tive pro­pos­al. Im­bert said then that Pa­tri­ot­ic has shown its abil­i­ty to raise fi­nance and was al­so ex­pe­ri­enced in mar­ket­ing

Fi­nance Min­is­ter Colm Im­bert is clar­i­fy­ing Pa­tri­ot­ic En­er­gies and Tech­nolo­gies Ltd “com­plete mis­un­der­stand­ing” of how the tax in­cen­tives and con­ces­sions work.

Victor Gill Ramirez

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Pa­tri­ot­ic is whol­ly owned by the Oil­fields Work­ers Trade Union (OW­TU) and on Fri­day its pres­i­dent gen­er­al An­cel Ro­get held a press con­fer­ence to re­spond to Im­bert, who said that the com­pa­ny was no longer qual­i­fied to take over the Petrotrin re­fin­ery.

Victor Gill

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Pa­tri­ot­ic said that the tax cred­its are noth­ing new and are giv­en to multi­na­tion­al com­pa­nies mak­ing for­eign di­rect in­vest­ment in T&T

But Im­bert said that there was a crit­i­cal dif­fer­ence

“How­ev­er, what is be­ing missed is that the tax cred­its giv­en to oth­er com­pa­nies mak­ing an in­vest­ment in Trinidad and To­ba­go are not trans­fer­able or trade­able,” Im­bert said.

“It is on­ly non-trans­fer­able tax cred­its that are giv­en to oth­er com­pa­nies mak­ing in­vest­ments, and these non-trans­fer­able tax cred­its can on­ly be used to off­set tax on in­come from their own op­er­a­tions, and can­not be used by oth­er un­re­lat­ed com­pa­nies and there­fore do not rep­re­sent any fi­nan­cial out­lay on the part of Gov­ern­ment,” he said

Im­bert said the prob­lem with a trans­fer­able tax cred­it is that it was not linked in any way to the ac­tiv­i­ties, in­come or op­er­a­tions of the com­pa­ny in­volved and is in ef­fect a form of cash or rev­enue fore­gone

“A trans­fer­able tax cred­it can thus be sold on the open mar­ket for cash and is a le­gal and bind­ing oblig­a­tion of the Gov­ern­ment, which in this case would have no re­la­tion­ship or con­nec­tion to the restart or op­er­a­tion of the Re­fin­ery,” he said

Im­bert said that as a re­sult, whether the re­fin­ery was restart­ed or not, the pro­posed trans­fer­able tax cred­its would be sold for cash

“Sim­ply put, the fun­da­men­tal con­di­tion­al­i­ty in the fi­nanc­ing pro­pos­al from Cred­it Su­isse was that the Gov­ern­ment was re­quired to is­sue to Cred­it Su­isse, through Pa­tri­ot­ic, US$750 mil­lion in ful­ly trans­fer­able and trade­able tax cred­its in ex­change for the US$500 mil­lion that would be paid to Trinidad Pe­tro­le­um Hold­ings for the Re­fin­ery and Paria,” he said

The Gov­ern­ment, Im­bert said, was re­quired to give Cred­it Su­isse US$750 mil­lion in ful­ly trans­fer­able mon­ey mar­ket in­stru­ments, “which in­stru­ments Cred­it Su­isse had stat­ed up­front that they planned to sell on the open mar­ket.”

“Pa­tri­ot­ic would then get the Re­fin­ery and Paria for free, hav­ing put up no mon­ey, col­lat­er­al or se­cu­ri­ty and could mort­gage the Re­fin­ery and Paria as they saw fit,” he said

“This was not what was en­vis­aged or stat­ed when the Re­quest for Pro­pos­als for the sale or lease of the Re­fin­ery was is­sued in 2019. It is al­so com­plete­ly in­con­sis­tent with the gen­er­al cri­te­ria and con­di­tions as­so­ci­at­ed with the pro­cure­ment process for the dis­pos­al of the Re­fin­ery and cer­tain­ly not in the pub­lic in­ter­est.”

This crit­i­cism of Pa­tri­ot­ic comes af­ter both Im­bert and En­er­gy Min­is­ter Franklin Khan de­fend­ed their de­ci­sion to award the RFP to Pa­tri­ot­ic to take over the re­fin­ery

Back in 2019 when asked how the months-old Pa­tri­ot­ic was able to af­ford the re­fin­ery, Im­bert said that the com­pa­ny was cho­sen be­cause it pre­sent­ed the most lu­cra­tive pro­pos­al. Im­bert said then that Pa­tri­ot­ic has shown its abil­i­ty to raise fi­nance and was al­so ex­pe­ri­enced in mar­ket­ing.

Im­bert said the Gov­ern­ment de­cid­ed to de­fer what was in­tend­ed to be an up­front pay­ment, which en­abled the com­pa­ny to bet­ter af­ford the in­vest­ment

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