TRINIDAD ECONOMIC HIGHLIGHTS - NOV-DEC

UNCLAS PORT OF SPAIN 001430

SIPDIS


SIPDIS

E.O. 12958: N/A
TAGS: EAIR SENV EFIN EINV ETRD TD
SUBJECT: TRINIDAD ECONOMIC HIGHLIGHTS - NOV-DEC

Ref: Port of Spain 1358

Notable economic developments in Trinidad & Tobago during the second
half of November and first half of December included:


1. Further BWIA-Caribbean Airlines Developments

2. Delta Airlines opens Atlanta-Port of Spain direct flights

3. Second Environmentally Sensitive Area (ESA) Named

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1. Further BWIA-Caribbean Airlines Developments
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The conversion of national carrier BWIA into Caribbean Airlines
continues to generate controversy as the launch of the new airline
on January 1, 2007 approaches (reftel). Daily newspaper articles
have questioned the rising cost of restructuring, the inability of
GOTT to sell the seven Heathrow slots for more than UK pounds 5
million, reports of an abortive US$20 million contract to re-brand
BWIA from June 2006 (three months prior to the announcement that
BWIA would be closing),and the logo change from the steel pan drum
to a hummingbird.

In a Parliamentary address December 1, Minister of Finance Conrad
Enill announced that the cost of the BWIA/Caribbean Airlines
restructuring would top US$350 million, up from previous estimates
of US$250 million. Almost a third of the total cost will be used to
settle the voluntary separation packages of terminated employees;
other costs include settlement of liabilities, debt reduction and
working capital for future operations.

Four days later, Enill revealed that the previously announced deal
to trade BWIA's Heathrow slots to British Airways for a BA code
share on flights to Gatwick would net the T&T carrier only UK pounds
5 million. Opposition parliamentarians have questioned the low
price of the slots sale and made allegations of profiteering against
the Minister of Trade and Industry Ken Valley in connection with
this agreement. Enill and Valley have defended the deal, declaring
it the best deal they could make in a "use it or lose it" situation
in which BWIA's Port of Spain-London routing was no longer
profitable.

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2. Delta Airlines opens Atlanta-Port of Spain direct flights
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Delta Airlines celebrated its inaugural flight from Atlanta to Port
of Spain Saturday, December 9. As part of the U.S. carrier's
international expansion plan, Delta will fly between these sister
cities four times every week and start weekly flights between
Atlanta and Tobago on February 17, 2007, on the eve of Trinidad's
Carnival. In addition to Atlanta and Port of Spain's nearly 20-year
sister city relationship, Delta hopes that increasing trade ties and
the 4,700 families of Trinidadian descent residing in Georgia will
make this route profitable.

A delegation of representatives from Delta, the State of Georgia and
the Atlanta Mayor's Office traveled on the inaugural flight and
conducted a series of events December 11 to promote the new service
and trade between the two areas. Minister of Trade and Industry Ken
Valley's speeches at both a business meeting sponsored by the State
of Georgia and at Delta's inaugural reception focused on
transforming Port of Spain into a regional transportation hub.
Announcing that Copa Airlines would soon start flights between
Panama and Port of Spain and that Trinidad and Tobago was in
discussions with Mexico aimed at launching new service, Minister
Valley also suggested that Delta should consider Port of Spain as a
hub for flights to South America.

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3. Second Environmentally Sensitive Area (ESA) Named
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The Minister of Public Utilities and the Environment Penelope
Beckles officially declared Nariva Swamp an Environmentally
Sensitive Area (ESA) in a ceremony at the Environmental Management
Agency (EMA) December 8. Nariva Swamp and Matura National Park in
northeast Trinidad, which was declared an ESA in 2004, are the only
areas in Trinidad and Tobago currently protected under the
Environmentally Sensitive Areas Rules adopted in 2001. The
Government plans to protect two additional areas: the Buccoo Reef in
Tobago and the Aripo Savannah in Trinidad.

ESA status protects an area from industrial development and
agricultural activities to preserve Trinidad and Tobago's
biodiversity. In the case of Nariva Swamp, EMA reported that an
application to drill for oil on Nariva Swamp was withdrawn a week
before ESA status was announced. Some activists opposed to the
Alcoa smelter construction in Chatham have argued that Trinidad's
south-western peninsula also should be declared an ESA and that
there is a larger number of area endemic species there than in the
Nariva Swamp (see septel).

AUSTIN