,

TER~~

1.

OF REFERENCE AND CO"WOSITION OF COMMITTEE

Cabinet, in Minute No. 366

~f

11 February. 1982 appointed a

Committee to review the entire progra~me of Government-to-Government

arrangement.s in keeping with the announcement of the Prime Minister and
Minister of Finance and Planning in the 1982 Budget Statement.

The terms

of reference of the Committee are as follows:

(a)

to undertake a comprehensive review of the Governmentto---Go,.nrnment arrangements s of .the projects undertaken

to date, and the mechanisms through which the projects

ar~

i:q:lemented and monitored with a view to CBsessing

the extent to which the aims and objectives of the

Gc"ver::ment-to-Government arrangements have been fulfilled;

(b)

to m"!)(,, recommendations which should specifically include:

(i)

measures to ensure that the institutional

arrangements for the monitoring of existing

projects arc effective;

(;.i)

'Nhether or not all of the projects contemplated

should be proceeded with under Government-toGovernment arrangements.

COMPOSITION OF' THE COMMITTEE

Mr. Lennox Ballah
Permanent Serlretary

Ministry of External Affairs

MiDS A, Carrington
Treasury Solicitor
Ministry of Finance and Planning
Mr. Harold Atwell
Director
Project Analysis and Technical
Cooperation
Professor I.D.C. Imbert
Dean
FaCUlty of Engineering'
University of the West Indies
St. Augustine

Chairman

! .

II.

2.

Ti,e Po-ime Minister and Minipter of Finance in his Budget Speech

of 1979 int"od"""d a fundamental departure from the traditional method

for the

imp~e~ent3tion

t: '."

He introduci.l

of development projects in Trinidad and Tobago.

systel1! of Government-to-Government arrangements as a

novel form,,:."] :l. ,- the expeditious implementation of Trinidad and Tobago I s

develop~ent

3.

~ro~~ct~.

IT

~,.

to understand what led to the introduction of

'1'

:t~rnm0nt

GoverneJent- t ":>-(:

arrangements, it is necessary to look first at

the dram"h" t,' !ls:lbn;mtion of Trinidad and Tobago's economic prospects

after 1973.

,1'.-

"con:>my of Trinidad and Tobago recorded unprecedented

levels of e:r"wtl', (';.trir,t; the period 1973 to 1981.

The years following

1973 witnees"d El.-,ssiv', inflow8 of revenue generated by the sharp

increases in ti,' j.rice of oil.
record level .._,

Although public expenditure soared to

economy was still able to generate annually

t .,,'.

impressive bl.dg" 'J,ry surpluses.

4.

While lor the five years prior to 1973, total current receipts

were 31,833 ,Gilli,,", or an average of 3366 million a year, for the five
years 1974 to

1~78,

total current receipts were

average of :;2,1:52 million a year.

31~,661

million, or 3n

The receipts in the second five-year

period were six times the receipts of the first five-year period.
5.

For

th~

first tiffie in its history Trinidad and Tobago

possessed the fin.ncial resources to implement its

develop~ent

programme

and. to determine its own priorities without the need to roeort to

external entities for inflowB of capital.

32 billion a yeBr, tIle Government

~oved

With revenues in Excess of

swiftly to transform the economy

and lessen its dependence on oil by embarking on a large-scale programme

of industrial development.

The Government set about establishing

national priorities and policies, approving projects, creating special

funds for long-term development and establishing new organizations and
institutions in its efforts to compress as much developmental activity
in as short a period as possible.

'," i

,~

,,

- 6 -

..

.:,

10.

The decision was taken to acguire expertise in areas in

~

which it was perceived that Trinidad and Tobago was deficient expertise in constructing modern airports, large-scale road construction, hospital design and construction and in bUilding ferry
terminals.

It was thought that this imported technological capa-

bility would assist local consultants and contractors in widening

their expertise.

This was to be expected because local consultants

and contractors were to be counterparted'with foreign experts in the

implementation and execution of' projects.

11.

The Government recognised the need to guard against the

unwholesome practices involved in the so-called transfer of technology

or traffic j.n technology.

Recognition was given to the need to protect

the taxpayer against poor perf'ormance, ignoring of schedules, use of

shoddy materials.

While desi'rous of encouraging local firms to expand

their techn'.log; cal base and not just their profits, Government was
cognisant oj' th"
"front

men~l;

the umbrell.

need to bE' on guard against the burgeoning breed of

conmission age11ts and "two-dollar " companies which, under

of ()f,ing local, provided the front for foreign firms

chosen 'by them.

12.

I!.

n,~(~ds

to be said that Government was not unaware that

poor perfor'oronC'" ",_nd in".bil.i. ty to adhere to agreed schedules was not

confined to thE 'ncnl contractors alone.

Some transnational con-

st.ructio!1 ,",",n-p''''; 'C'" eng2gild on the Gover!l;;lent' s energy-based projects

were silmila>'ly "'ll.pable.

13.

P:. tr"

end of

197~3,

the use of foreign expertise in the

implemen tat i Jr. ' " hoth 1 arge-scale infrastructure and industrial
projects ha,: i," ,-a.:lsad significantly.
of the dev8, OpT"" t effort
of this exp' rr,; "".

'HS

Indeed, much of the success

predicated on the continued availability

Up i.o th1t time the procurement of these inputs

of forei..-n dope ,";is<' hac beGn arranged almost entirely through private
sector

intE~esl:. c~tering

Bubstantially to t.he requirements of the

projects of th,: (; JVernlllen t 's development programme.

11

- 18 -

,
PROJECT

BELGIUM
cont'd

ExeCUTING
.!,GENCY

'~

PROJECT DETAILS

Otiher Relevant Information

il
The Belgian Government h~s informed as follows:
f

- The Governn,ent of Belgium has never entered into

a Government-to-Government Arrangement with any,
Governments;
- The Belgian Constitution precludes that Governmfr
from direct involvement in private enterprise
activity.
- The Belgian Government could provide financial ar
other incentives to assist private enterprises'
interested in foreign government contracts
- The Belgian Government is ready to provide the
Government of Trinidad and Tobago with assurances
with regard to the experience, integrity,
technical nnd financial competence of Nobels
Peel man - the firm interested in the proposed
projects.
- The Belgian Government desires to con~ider on a
more general basis the whole question of trade
relations with Trinidad and Tobago.

The Ministry of Works, Maintenance and Drainage has

indicated that the implementation of-these projects has
nlready been delayed too long.
It has suggested that
20 alterr.~tive source of expertise be sought.
F.co i (ct Classification:

pro jects contemplated.

."

'.

-,

; )

"'r

',! -.

i4 ;

~o.

[~ practice, however, this, with possibly one exception,

d/id no'. t

._

place.

Foreign -Governments refused to accept respons-,

iJ'bili t~J fe " the performance of firms even if they were "persuaded"
tio des:'f.n~tc them.

The foreign firm consistently gets the support

o;f its for,':'gn government in pressuring government and its agencies

!

flor lar['er concessions for the

i

cpnseqcl.:nc .

.3

fore~gn

entity with undesirable

lor the government of Trinidad and Tobago.

It is true

that
the contracts are fully commercial endeavours, but it is
I

e~ident
!

tha t 'some foreign contractors and pri,ra te firms consider

G~vernment-to-Government Arrangements in more than strictly

cbmmercial terms.
i

They see these

ffi

providing them with

opportuniti~s

tb exploit situations.
I
I

The Review also indicates that in a few cases projects are'

G!1.

bieing implemented or services performed without a specific project

'.

contract.
j

412.

Monitoring Arrangements for Projects indicated in the

~eview

above vary greatly.

Responsibility can

li~

with any of the

:t!ollowing:
f

the Permanent Secretary of a particular Ministry

(ii)
(iii)
(iv)

a Division of the Ministry

a State Agency like NIPDEC or the PTSC
a specific Task Force set up specially to monitor
the Project capable of recruiting. specific legal,
technical and other experts outside of Government
to assist in the supervision and management of the
Project

(v)

!;

43.
I

a Project Implementation Group or Steering

Committee comprising representatives of Ministries.

Experience has shown that in the complex task of monitoring

the implementation of projects of the range and magnitude of projects

I

tpat fall under Government-to-Government arrangements, the monitoring

gfoups are generally deficient in critical areas of expertise.

It

is absolutely necessary for these groups to effectively control, on