it have anything d govt does run properly & not run it down into d ground ....https://trinidadexpress.com/business/lo ... MSZ31HWdpY$30m subsidy to keep Lake Asphalt afloat...not sustainable, says Sinanan
Asha Javeed ... [ent this d same woman who made d news while back for certain allegations]
GOVERNMENT is determined to keep T&T’s 44-year-old pitch company, the La Brea-based Lake Asphalt, in operation.
Lake Asphalt is now receiving a monthly subvention of $2.5 million, $30 million a year, from the Ministry of Works and Transport to keep it operational.
The Express Business was told that the sum covers salaries for the company’s 240 employees, as the company’s sales only account for 25 per cent of its total costs.
Two weeks ago, about 200 employees of Lake Asphalt, which is wholly State-owned, protested outside the Ministry of Works and Transport in Port of Spain over unpaid wages.
“The subvention is to make sure the workers are paid on time. Since we took over, we have ensured that all outstanding salaries have been paid up to date. We still have some outstanding statutory payments, which we are working with the Ministry of Finance on,” said Works and Transport Minister, Rohan Sinanan in interviews.
He said the Government is committed to finding a workable solution for the company but acknowledged that it cannot survive on just a subvention.
“It’s not sustainable at all,” said Sinanan.
He told Express Business that his Ministry had met with the management team and they have done a proposal to transform the organisation.
Lake Asphalt, the bitumen-based company, was transferred from the Ministry of Energy and Energy Industries to Works and Transport three months ago.
The announcement was made by Prime Minister Dr Keith Rowley at a public meeting in San Fernando in early April.
“The Cabinet has put Lake Asphalt in the Ministry of Works and has put a committee in place with NIDCO (National Infrastructure Development Company) acting as the operating agency to create a new business model for Lake Asphalt to make it sustainable, to make it profitable, to make it a contributor from the lake and from otherwise,” Dr Rowley had said.
“What was happening before was that Lake Asphalt was being supported by selling bitumen from Petrotrin. So once the refinery was closed down, all of a sudden the Lake Asphalt company had no revenue stream.
“And, of course, to pay the workers the Ministry of Finance has to provide every three months a certain amount of millions of dollars. How long can that go on for? “We are going to fix that and we are going to create something sustainable in the La Brea area for the La Brea people and for the country of Trinidad and Tobago,” Dr Rowley had said.
Dr Rowley had pointed out that one of the problems in T&T is potholes.
”Yuh know why? You can’t get bitumen to pave the roads. Not being produced here, can’t be imported because of the business model. We are dealing with that,” he had said.
In the 2020 Review of the Economy, Lake Asphalt reported an operating deficit of $10.2 million.
Sinanan told the Express Business the organisation has many challenges.
He said a plan has been completed but the way forward first has to be approved by Cabinet.
Questioned on why the Government chose to keep the company operational as opposed to closing it down, he said Lake Asphalt was an asset of the Government that has all the potential to be profitable but its business model needs to be revisited.
“We are working on a different business model, as in its present state it is not working,” said Sinanan.
Sinanan explained that the work of his Ministry dovetailed with the main product being produced by Lake Asphalt, bitumen.
“One of the main products for roadworks is bitumen and we had serious challenges getting bitumen out of Lake Asphalt. So it affected us and our work” he explained.
Following the closure of Petrotrin, Lake Asphalt lost access to its main commodity, bitumen.
Up to that time, Lake Asphalt had enjoyed a virtual monopoly in the supply and sale of bitumen.
However, when Petrotrin was closed the Government had taken a decision to open the market and allow contractors to import it to meet their needs.
To this end, bitumen was sourced from Suriname, Barbados and Jamaica.
Last year, the Ministry of Energy and Energy Industries twice sought subventions to assist Lake Asphalt in the payment of its expenses, including the payment of its workers.
The Contractors and General Workers’ Trade Union (CAGWTU) condemned the decision and called on the relevant minister with responsibility for Lake Asphalt to immediately engage the union in discussions about the current status of Lake Asphalt, the job security of the workers, payment of ongoing salaries and plans for the future viability and sustainability of the company.
Since 2016, a Terrence Farrell-chaired committee to review and assess State enterprises had suggested that Lake Asphalt be one of eight companies that should be divested.
It suggested that eight companies be divested- VMCOTT, SWMCOL, National Petroleum (following a deregulation plan), National Quarries, First Citizens, Lake Asphalt, National Helicopter (which it suggested be divested to National Gas Company (NGC) and National Maintenance Training and Security Limited.
“In the minds of many citizens, State enterprises are seen as mechanisms for the dispensing of political patronage, as inefficient and loss-making providers of services, or as providing employment for supporters of whichever party happens to form the Government,” was the opening statement of the report’s executive summary which was dated July 18, 2016.
According to its website, Lake Asphalt is charged with the commercial development of the Pitch Lake of Trinidad and Tobago, the world’s largest deposit of natural asphalt.
It says that Lake Asphalt has been involved in the mining, refining, manufacture and distribution of high quality road building materials and other asphal-related products for over 100 years and is a global organisation with distributors and alliances in five of the seven continents of the world.
“Lake Asphalt processes and exports Trinidad Lake Asphalt (TLA), which is mined from the Pitch Lake in La Brea. TLA, the company’s flagship product is recognised around the world as the superior modifier for refinery bitumen and has been used on every continent in the world over the past century in a number of applications including the paving of some of the largest roadways, highways, bridge decks, racetracks and airport runways across the globe,” according to the company’s website.