Saturday, January 20, 2018

Energy Ministry yet to receive report

‘Won’t ­speculate’: Selwyn Lashley, permanent secretary in the Energy Ministry, speaks ­during yesterday’s ­sitting of the Public Accounts ­Committee in Parliament, International Waterfront Centre, Port of Spain. —Photo: Office of the Parliament

Notwithstanding the fact that the final report of the Internal Audit Committee of Petrotrin “is all over the place”, the Ministry of Energy is yet to receive a copy of this report which gives details on the alleged “fake oil” fraud.
This was revealed by permanent secretary in the Ministry of Energy Selwyn Lashley as he gave evidence before the Public Accounts Committee (PAC) yesterday.
Chairman of the PAC Dr Bhoe Tewarie asked Lashley to fast-track the report. He said if the audit report is accurate, there should be a ­taxation audit on the producer (A&V Oil) that has under-supplied and that has been overpaid in this particular instance.
At yesterday’s meeting, Tewarie expressed alarm and “worry” that the country may be losing revenues on an unimaginable scale because proper systems were not in place for verifying the accuracy of the information obtained from foreign and local producers in the energy sector and from quarry operators—information on which the country’s revenues and its economic health is based.
Tewarie raised the question of whether the Ministry of Energy was equipped to do the job required.
“The question that arises is whether the Ministry of Energy is as equipped as it should be to do the work that is required of a small state that happens to be an oil-and-gas-producing company at a time when these resources are being depleted, at a time when the price is low and at a time when the revenue challenge for Trinidad and Tobago is perhaps the worse it has ever been for a long time,” he said.
He added: “I find all of this very, very disturbing, the casual nature of the conversation is even more disturbing,” he said.
No knowledge of final report

Asked by Tewarie whether the ministry was conscious that something was going wrong in Petrotrin where an oil producer was billing for oil that was not, in fact, being produced, Lashley said Petrotrin submitted a preliminary report indicating there was a concern about over-reporting and indicated this was under investigation by the ­internal audit.
Asked whether the ministry then took an active approach in terms of intervention in Petrotrin over a matter of “overpaying” and whether the minister had knowledge of what was transpiring before this became a public issue, Lashley said the prelimi­nary report had “no details”.
“There is a report circulating right now in the public space. Those details are part of a final report which is still to come to the ministry,” he said.
“So you have no knowledge of that report?” Tewarie asked.
“Apart from what is circulating in the public space (no),” he replied.
Asked why the final report, “which was all over the place”, had not yet reached the ministry, Lashley said he could not speculate. He said there was a process involved in the investigation.
He said he had no knowledge of the final report prior to its dissemination in the public domain and he could not speak for the minister, he said, in response to a question from Tewarie on whether Energy Minister Franklin Khan knew about the final report.
He said there was an “indication” from the president of Petrotrin to the ministry that there was a matter being investigated and that at the end of it, something would come officially from the company to the ministry. The ministry would then, of course, do further investigation.
Tewarie said he was not comforted especially at a time when the country’s revenue situation is so difficult, that the Ministry of Energy was providing a verifiable enough control over the revenue situation from energy to the Government and people of Trinidad and Tobago.
Calibration issue

He noted that at the PAC’s last meeting there was the issue of whether the ministry could verify numbers from the private sector. Noting there was a calibration issue, he said while there was the authority to go in and demand the numbers on site, this authority had not been exercised in the country’s history of engagement with the private sector firms in energy.
“The situation at Petrotrin, I don’t know how much calibration is done for the producers who sell to Petrotrin and whether they are witnessed (by Petrotrin)... Then you have a ­situation with the quarries where there is an honour system that ­cannot be managed and monitored except by query.
So you are looking at prime assets—quarries, vital to the construction and building of everything on the face of the earth in Trinidad and Tobago; you looking at oil from the foreign producers, over which we have oversight but no real control; you looking at production from oil suppliers to the State oil company which we seem not able to have control over; and we have had ­recurrent issues of the smuggling of diesel.
“When you look at that and you look at the revenue situation in Trini­dad and Tobago and the measures for revenue generation including taxation on businesses and ordinary citizens and... you look at the potential for not being able to truthfully verify all the oil on which taxes are to be paid by the private sector, I think this is a major cause of worry,” Tewarie said.