PETROCARIBE SAVINGS NOT (YET) A SLUSH FUND

C O N F I D E N T I A L KINGSTON 001298

SIPDIS

SIPDIS

DEPARTMENT FOR WHA/CAR (BENT),EB/ESC/IEC/EPC (MCMANUS),
WHA/EPSC (CORNEILLE)
STATE PASS FOR DEPARTMENT OF ENERGY

E.O. 12958: DECL: 06/29/2016
TAGS: ENRG EPET ETRD EINV ECON PREL JM
SUBJECT: PETROCARIBE SAVINGS NOT (YET) A SLUSH FUND

REF: KINGSTON 925

Classified By: CDA Ronald Robinson, reasons 1.4 (b) and (d)


1. (SBU) In an informal discussion with Ruth Potopsingh,
Chairwoman of the Petroleum Corporation of Jamaica Group of
Companies (PCJ Group) on June 27, Potopsingh offered some
clarification of the mechanism through which PetroCaribe
Agreement savings are held, as well as the uses to which the
savings from the Agreement with Venezuela might be put.


2. (SBU) Potopsingh noted that the PetroJam refinery which
receives the oil remits 60 percent payment of the market
price to PdVSA, and the remaining 40 percent to the PCJ.
That money is then held in trust and cannot be touched,
except by Cabinet decree.


3. (SBU) In February, the administration tabled: "A Bill to
Amend the Petroleum Act," which will establish a separate
entity under the PCJ Group, known as the PetroCaribe
Development Fund, with a Board whose members will identify
social development and poverty alleviation projects
"appropriate to the spirit of the Agreement," she stated.
Potopsingh expected that bill to pass some time this summer,
but added that the composition of the Board had not yet been
discussed.


4. (SBU) According to Potopsingh, thus far Cabinet has
instructed that PetroCaribe funds be used for only two
projects, both under the direction of the Ministry of
Transport and Works/National Works Agency (NWA). Although
she claimed ignorance when asked to specify the amounts and
the projects, she agreed that the end result was almost
certainly for road repair, under the NWA's Damaged Road
Program.


5. (U) The Opposition Jamaica Labor Party (JLP) has made much
of the ruling People,s National Party,s (PNP) lack of
transparency regarding the use of PetroCaribe funds.
Opposition leader Bruce Golding has also been vocal in
worrying that PC is making Jamaica too beholden to the wishes
of Venezuela. Speaking about the upcoming vote for
non-permanent members of the United Nations Security Council,
for example, Golding said: "I worry that our vote has been
forced through PetroCaribe."

--------------
Comment
--------------


6. (C) Post has engaged the GOJ repeatedly on PetroCaribe,
but in the absence of a clear USG alternative, traction is
proving difficult. It is heartening that the funds are being
protected for the time being, as many suspected they would
become the PNP's election year "slush fund," but Potopsingh
was clearly anxious that the Board be established, so that
she would no longer be responsible for fund oversight.
Moreover, despite Golding's rhetoric, it must be remembered
that an election is imminent, and the JLP itself underpinned
its proposed GOJ budget using funds secured through
PetroCaribe (ref. B),so there is little evidence to conclude
that the JLP would cancel or amend the agreement. End
comment.
ROBINSON