Identifier
Created
Classification
Origin
07PORTOFSPAIN236
2007-03-16 17:50:00
UNCLASSIFIED
Embassy Port Of Spain
Cable title:  

TRINIDAD & TOBAGO ECONOMIC HIGHLIGHTS - FEBRUARY

Tags:  ECON EAIR ECPS EFIN EIND ELNT KIRP TD 
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UNCLAS SECTION 01 OF 03 PORT OF SPAIN 000236 

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SANTO DOMINGO FOR REGIONAL COMMERCIAL OFFICE

E.O. 12958: N/A
TAGS: ECON EAIR ECPS EFIN EIND ELNT KIRP TD
SUBJECT: TRINIDAD & TOBAGO ECONOMIC HIGHLIGHTS - FEBRUARY


The following were notable economic issues in Trinidad & Tobago
during the month of February:

UNCLAS SECTION 01 OF 03 PORT OF SPAIN 000236

SIPDIS

SIPDIS

SANTO DOMINGO FOR REGIONAL COMMERCIAL OFFICE

E.O. 12958: N/A
TAGS: ECON EAIR ECPS EFIN EIND ELNT KIRP TD
SUBJECT: TRINIDAD & TOBAGO ECONOMIC HIGHLIGHTS - FEBRUARY


The following were notable economic issues in Trinidad & Tobago
during the month of February:


1. PM announces "Full Employment"

2. Inflation Continues Downward Trend

3. Central Bank Bond Issue Oversubscribed

4. Smelter Saga Continues

5. Amended OSHA debuts U.S. affiliate charged

6. Music pirates keel-hauled

7. Opposition questions U.K. consulting firm ties to CAL CEO, role
in BWIA Heathrow slot "fire sale"

8. Court victory for Digicel

9. Engineers call for rapid bus, not rapid rail

10. On Location T&T - film industry incentives

--------------

1. PM announces "Full Employment"
--------------
The Central Statistical Office (CSO) released data showing that
unemployment had dropped to a historic low of 5.0 percent in the
fourth quarter of 2006. PM Manning took the opportunity of a
February 24 political rally to take credit for T&T's "full
employment economy," prompting opposition politicians to accuse
Manning of manipulating the CSO and question CSO methods, which
count beneficiaries of GOTT social safety net programs as employed.
Several private sector economists told reporters they saw no reason
to question CSO methodology or impartiality, but did voice concern
about employment sustainability, observing that most new job
creation was either in T&T's booming construction sector or in
government employment and programs.

--------------

2. Inflation Continues Downward Trend
--------------
The Central Bank of Trinidad and Tobago (CBTT) reported on February
23 that inflation fell for the third consecutive month after peaking
at 10 percent in October. Headline inflation measured 8.6 percent
on a year-on-year basis to January, down from 9.1 percent for
December 2006. Food price inflation slowed further to 20.9 percent
year-on-year to January, from 22 percent in December 2006. Core
inflation decreased marginally to 4.4 percent from 4.6 percent in
December 2006. The Bank continues to maintain the "repo" rate at 8.0

percent.

--------------

3. Central Bank Bond Issue Oversubscribed
--------------
The Central Bank of Trinidad & Tobago declared its second tranche of
bond sales a success in a February 14 press release. By the close
of the bid period for 7.80% bonds due in 2012, the Bank had received
bids for TT$911.5 million, triple the advertised amount of TT$300
million. In response, the Central Bank increased the auction size
to TT$674 million. This sale followed on the successful issue in
November of TT$700 million in 8.00% bonds due 2014 at a face value
of $700 million for a yield of 8.15%. Full text of the Central Bank
press release is at
http://www.central-bank.org.tt/news/releases/ 2007/ mr070214-2.pdf.

--------------

4. Smelter Saga Continues
--------------
Alcoa continued talks with Government to identify a new location for
its proposed smelter plant and also discuss the price of natural gas
to power the smelter. Alcoa's Communications Director Wade Hughes
was unable to say when construction of the plant would begin, since
site-specific work at Chatham was discontinued after government
decided to relocate the plant. He said work would recommence once a
new site had been identified, agreed, and developed by the
government. Hughes felt that it would be a number of years before
an Alcoa aluminum smelter could be operational in Trinidad.

At a February 8 media briefing, Prime Minister Manning said the
government was amenable to reversing its decision on the Chatham
site in light of information that "drug elements" may have
intimidated residents into opposing the planned Alcoa smelter. In
response, outraged anti-smelter activists denied that drug money was
being used to fund their activities, announced plans to continue
opposing the smelter, and called on the Prime Minister to hold a
national referendum on this issue.

-------------- -

5. Amended OSHA debuts, U.S. affiliate charged
-------------- -
The amended T&T Occupational Safety and Health Act (OSHA) 2004 made
its debut in the Industrial Court on February 7, when 11 charges
were laid against three companies following the collapse of
scaffolding on the building site of the new Customs and Excise
building on July 12, 2006. Twenty workers were injured and one lost
a leg in the accident. Following investigations by a U.S.-based

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scaffolding firm, four charges were laid against NH International
(Caribbean) Limited, six against Safeway Access and Support Systems
Limited (SASSL) who erected the scaffolding (six charges),and a
single charge against project manager Turner Alpha Limited, local
affiliate of U.S. company Turner Construction-International LLC.
Preliminary hearings are scheduled for May 9 and 10. Each charge
upheld carries a fine of US$16,000. Reports indicate that the three
companies intend to challenge the legality of the amended 2004 Act.


--------------

6. Music pirates keel-hauled
--------------
In another triumph against music piracy, four music pirates nabbed
in December and January police raids pled guilty to piracy charges
in Port of Spain's Magistrates' court February 2. They were fined
from US$400 to US$700 or ordered to serve three months in prison if
in default. The Copyright Organization of T&T (COTT) reported that
all seized vending carts, electronic equipment and CDs will be
destroyed per provisions in the T&T Copyright Act. Police continue
to conduct periodic raids, including one on February 26 in which
eight vendors were arrested and charged for piracy.

-------------- --------------

7. Opposition questions U.K. consulting firm ties to CAL CEO, role
in BWIA Heathrow slot "fire sale"
-------------- --------------
Opposition United National Congress (UNC) Senator Wade Mark raised
queries in the Senate on possible ties between UK consulting firm
Catelli PLC and Caribbean Airlines (CAL) chief executive officer
Peter Davies that would constitute a conflict of interest. Catelli
was retained for US$2.5 million to work with Davies on the
BWIA-to-CAL transition. In response, GOTT Minister in the Ministry
of Finance Conrad Enill said that he would have to investigate
Senator Mark's claim. Responding to another question from Mark,
Enill confirmed that Catelli PLC was involved in benchmarking prices
for Heathrow Airport slots which were sold to British Airways for
five million UK pounds plus a three-year codeshare on direct flights
between T&T and London/Gatwick three times weekly. The sale has
drawn local criticism that the T&T carrier was short-changed. Enill
disclosed that Virgin Atlantic had offered the one other bid, 5.75
million UK pounds, but was only willing to fly from T&T to Gatwick
via Barbados.

--------------

8. Court victory for Digicel
--------------
Trinidad and Tobago High Court ruled in favor of Irish mobile
carrier Digicel in its court action against local incumbent TSTT
over interconnection. Three orders were granted by High Court Judge
Nolan Bereaux (1) that TSTT stop blocking Digicel from using its
networks, including for international calls; (2) that TSTT provide
additional circuits for Digicel to operate; and (3) that a former
TSTT employee be allowed into Nelson Exchange to ascertain whether

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TSTT had been blocking calls. A TSTT representative said the

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company was disappointed in the decision as it creates a dangerous
precedent for anyone requiring interconnection to bypass the express
provisions of the Telecommunications Act and obtain such services at
no costs. TSTT plans to appeal the Court's decision.

-------------- --

9. Engineers call for rapid bus, not rapid rail
-------------- --
The Trinidad and Tobago Association of Professional Engineers
(APETT) called on Government to consider a bus rapid transit system
as an alternative to the proposed US$1.1 billion rapid rail system
which is projected to take eight years to complete. The rapid bus
system could be operational within six to 12 months. Speaking at an
APETT forum, transport consultant Dr. Rae Furlonge expressed doubts
that the rapid rail system would help solve T&T's transportation
problems and mandated the APETT to prepare a transportation plan in
one month and submit it to Prime Minister Manning. Furlonge blamed
limited past development of public transport for current traffic
congestion. A study conducted by Parsons Brinckerhoff in 2004
showed that from 1966 to 1996, road infrastructure improved by five
percent, population increased by 39.7 percent and the number of car
licenses issued increased by 300 percent. Government is expected to
award a contract for the construction of the proposed rapid rail
system shortly.

-------------- --

10. On location T&T - film industry incentives
-------------- --
In an effort to promote Trinidad & Tobago as a viable film location,
the T&T Film Company (TTFC),a Government agency, announced a
package of incentives to woo foreign filmmakers. The rebate
packages approved by Cabinet for local and international production
expenditure (i.e. employment, catering, vehicle rentals and
accommodation) are 12.5 percent for spending between US$200,000 and

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US$500,000, 15 percent for US$500,000 to US$1 million, and 30
percent for spending in excess of US$1 million. To add to this
initiative The University of the West Indies and the University of
Trinidad and Tobago are now offering degrees in this field.
According Carla Foderingham, CEO of TTFC, in 2006 the company had 65
projects including an MTV TV series, the Japanese reality series
Ainori and commercials for Malibu Rum. Two foreign teams recently
visited TT to explore the possibility of shooting films locally.

AUSTIN