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CONTACT Magazine (Vol.18 No.1 – April 2018)

The first issue of the rebranded CONTACT Magazine — with a brand new editorial and design direction — produced by MEP Publishers for the Trinidad & Tobago Chamber of Industry & Commerce

transforming t&T To what

transforming t&T To what extent these policy objectives were achieved is debatable. For sure, the project was starved of funding as budgetary transfers from Trinidad, the major source of Tobago’s finances, fell from $2.609 billion in fiscal 2015 to $2.19 billion for fiscal 2017, a far cry from the $5 billion requested by the THA annually to run the island’s affairs. Tourism Some rebranding of the island to sustain the tourism product did occur, but its effectiveness remains in doubt, as the industry has declined rapidly, helped on by successive failures of the ferry service from Port of Spain. According to the Tourism Development Company of Trinidad and Tobago (since wound up), international tourist arrivals in 2005 were close to 90,000, and occupancy levels were high. But by 2015 the numbers had fallen for the fourth consecutive year to 22,435, and industry insiders have reported that last year fewer than 20,000 international tourists visited the island. For a while, the industry was kept afloat by an increase in domestic tourism. The World Travel and Tourism Council (WTTC) reported that domestic travel spending generated 53.7 per cent of the travel and tourism contribution to GDP in 2016, and noted that the market was expected to grow by 1.9 per cent in 2017. Though the WTTC figures did not disaggregate travel from Trinidad to Tobago, the government in Port of Spain, in launching the Tobago leg of its “staycation” programme, said 59 per cent of domestic trips originated from Trinidad. The 2017 growth predicted by the To accommodate the Sandals project, extensive infrastructural work is planned WTTC never materialised. Domestic travel was seriously damaged by challenges on the air and sea bridges. But tourism arrival statistics and budgetary allocations from Trinidad tell only part of the island’s economic story. Its hotels and guest houses were starved for international and local direct investment flows; properties could not be upgraded. The Foreign Investment Act of 1990, requiring foreigners to acquire a licence before purchasing land, and financial institutions’ reluctance to give government-guaranteed loans to local investors, have blocked investment flows needed to build new properties and upgrade existing ones. Private sector participation The private sector is playing an active role in the island’s plan for economic transformation, but again the focus is on tourism. According to Demi John Cruickshank, immediate past chairman of the Tobago Division of the Trinidad and Tobago Chamber of Industry and Commerce, “the business association will drive the economy with the government as its partner.” In January, Tobago business owners met with a ministerial team led by prime minister Dr Keith Rowley (himself a Tobagonian), and several decisions were taken involving private-public partnership (PPP). Revamping the economy in 2018 The government-guaranteed loans programme will return, and the period of repayment will increase from seven to fifteen years. This facility can now be accessed by all tourism and tourism-related industry stakeholders. Two marinas are planned for the western end of the island, and the proposed Sandals Resort will proceed as planned. The government will build the hotel, sourcing funds from the private sector, and Sandals will provide management services. To accommodate the Sandals project, extensive infrastructural work is planned. Work will begin on desalination and sewage treatment plants, and Tobago’s electricity capacity will increase with a $132 million expansion of the Cove Power Station. Twenty megawatts will be added to the plant’s present 64-megawatt output. Three vessels will operate the domestic sea bridge, and a new terminal for Tobago’s airport will be built through a build-own-lease-andtransfer financial arrangement. These PPP projects are primarily geared towards reviving the tourism sector, but in the process they are intended to kick-start the transformation of Tobago’s economy are intended to kick-start the transformation of Tobago’s economy. 34 Trinidad and Tobago Chamber of Industry and Commerce

transforming t&T Can we let go of fossil fuels? Does Trinidad and Tobago really believe in renewable energy? WORDS By: david renwick Average daily production of crude (bpd) and natural gas (bn cf) 2016 71,846 3.3 2017 71,700 3.8 Energy revenue (TT$bn) as a percentage 35 Economic transformation in the energy sector in Trinidad and Tobago would require two principal initiatives: raising the current level of crude oil production, and adopting renewable energy as an essential element in energy activity. The first is probably easier and quicker to implement. Crude production Current crude oil and condensate output is around 72,000 barrels a day (b/d). Raising that requires more development drilling by the upstream companies. At the very least, they should attempt to maintain that level in 2018. That means tht state-owned Petrotrin, which, together with contracted services, accounts for about 58% of total production, must up the ante. Petrotrin needs to be more active in its Trinmar acreage in the Gulf of Paria, and has indicated that it will be sinking five exploration holes there this year. On its land acreage, another five exploration wells will be drilled by lease operators and farm-out operators. EOG Resources will drill four exploration wells in its Modified Ub block, while BHP will be recommencing its deep-water exploration programme with the drilling of three wells, two in Block TTDAA 5 and the third in Block TTDAA 14. BHP sank the Le Clerc 1 well in May-August 2016 as the first of two Debt to GDP ratio exploration holes required during the first phase of the Block TTDAA 5 production sharing contract. The result 2016 was preliminarily classified as a natural gas discovery. All this activity has convinced the energy and energy industries minister, Franklin Khan, that “the outlook for the domestic energy sector in 2018 is reassuring.” On the gas side, about 1.7 trillion cubic feet (tcf) is likely to be lifted this year. 2017 Caribbean Susta Strategy (C-SER 20% by 2017 28% by 2022 47% by 2027 “Renewable sources of energy a Trinidad and Tobago Chamber Robert Le Hunte, Public Utilities of Industry and Commerce

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