The sea-bridge and the PNM’s sinking ships

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The contract termination with Inter-continental Shipping Company Ltd (ICSL) for the Galicia ocean vessel sea-bridge services between Trinidad and Tobago was known by the Keith Rowley –led PNM Government for over one year before the collapse of the inter-island connection.

And despite this long prior knowledge and a number of closed door meetings between Government and ICSL, Rowley Administration officials have been quick to feign surprise that sea transport between both islands have erupted into the scandalous ‘FerryGate’.

The scandal erupted when the Rowley Cabinet rejected the renewal of the contract with ICSL’s Galicia. But theGalicia impasse is only one in a long line of mismanaged and corrupt deals to service the sea-bridge by previous PNM Governments.

Galicia gone

ICSL has managed the sea-bridge service between Trinidad and Tobago with the super-fast, Galicia since 2014 when the former People’s Partnership Government signed a one-year contract.

The Galicia received two one-year contracts – 01 May 2014 to 30 April 2015, and 01 May 2015 to 30 April 2016.

It was reported earlier this month (April 2017) that the Rowley Cabinet rescinded the Port Authority of Trinidad and Tobago’s (PATT) commitment to ICSL, one year ago, for an two-year contract extension.

In rejecting the Galicia, the Rowley Cabinet had no replacement in mind, despite the fact that just five months later in 2016, the contract renewal for the MV Warrior Spirit was also rejected by the Rowley Cabinet.

As early as March 2016, ICSL was informed in writing by the Secretary of the Board of the Port Authority of Trinidad and Tobago (PATT), Pamela Ford (sister of Ashton Ford) of the cancellation of the tender process for “The Supply of a Passenger/Cargo Roll on-Roll off Ferry on a three year Time Charter”.

Ford’s terse letter of 29 March 2016 to ICSL stated: “Regrettably, we wish to advise that the Port Authority of Trinidad and Tobago has decided to cancel this tender process.”

This letter followed a decision by the PATT Board in late September 2015 to extend the Galicia’s contract by two years.

ICSL wrote to former Works and Transport Minister, Fitzgerald Hinds, in December 2015 citing the PATT’s decision to award a two-year contract, stating that ICSL was yet to be formally notified of official confirmation of the contract.

In the letter to Hinds dated 14 December 2015, ICSL noted that the Galicia had only six days of unscheduled downtime days during its 22-month engagement and further noted that the PATT did not always abide by the contractual agreement.

The letter stated: “It should be noted that the PATT has not always abided by the terms of the contract, and in several instances we ‘carried’ the PATT when it could not pay on time, and in good faith, did not institute the related remedial provisions of the contract.”

The ICSL also noted its ‘legitimate expectation’ based on the PATT’s agreement to a two-year contract, stating: “Consequent to this agreement, and based on our legitimate expectations emanating from the 2-year extension, we initiated financing arrangements through a local financial institution for the outright purchase of the vessel. It should be noted that the ship’s owners have agreed in principle to the sale, but advised that otherwise, the vessel will not be returned to Gibraltar at the end of February 2016.”

Promises, promises

Hinds did not respond to ICSL and the company then wrote to former Works and Transport Minister, Colm Imbert, in his capacity as Finance Minister. Imbert, was the mastermind behind previous ferry deals in a past PNM Government and has been silent on the issue. The letter was dated 20 January 2016.

Further letters indicate that a meeting eventually took place on 12 December 2016, almost a year later, with ICSL and new Works and Transport Minister, Rohan Sinanan.

During that time, as you will read in subsequent paragraphs, moves were made by the former PATT Chairman, Christine Sahadeo, to find a way to rescind the PATT’s word to ICSL that the contract would be extended by two years.

Sahadeo abruptly resigned earlier this year.

By April 2017, the Tobago House of Assembly (THA) Chief Secretary, Kelvin Charles promised Tobagonians that the sea-bridge connection would not be adversely affected by the Cabinet’s refusal to honour the PATT’s written commitment to renew the ICSL contract for 18 months.

Two days later, Works and Transport Minister, Rohan Sinanan gave a similar commitment in the Senate, promising there would be no problem with cargo transport on the sea-bridge for Easter. Sinanan told the Senate that Cabinet gave approval for the Port Authority to proceed with chartering a vessel for three years. He promised that the process would be completed by May 2017.

Reports have since indicated that a vessel called the MV Atlantic Provider from Guyana was contracted as a cargo vessel. While the Galicia transported passengers as well as cargo, the MV Atlantic Provider could only transport cargo.

This is despite the original tender for service of the sea-bridge call for “the Supply of a Passenger/Cargo Roll on-Roll off Ferry on a three year Time Charter”.

The MV Atlantic Provider will provide cargo services only, and Government has contracted the services of a barge for other sea transport to Tobago, at a cost that insiders have said exceeds US$18,500 per day.

ICSL, however, offered to provide the Elizabeth Russ ferry to ensure continuity while the Government sought a new sea-bridge service provider at US$13,700 per day.

Concern was also expressed in an assessment of the Atlantic Provider’s capability to provide the service. A legal assessment of the PNM’s choice showed that the Atlantic Provider:

(i)                  Has a speed of 10-12 knots, making the journey to Tobago last as long as 10 hours;
(ii)                Is unable to carry passengers;
(iii)              Is a single screw ocean vessel, which means it has only one engine;

(iv)              Has a cargo configuration designed for containerized cargo mainly.

As with the sale of the MF Panorama by a previous PNM Government, official information on the exact cost of the service provider, tendering process and the principals of the new service providing company have been kept hidden.

Scandalous shipping

But this is not the PNM’s first rough ride on local waters. As far back as 1982, the then PNM Government commissioned the MF Panorama. The company building the ship subsequently went out of business and two other companies had to step in to complete the project.

At that time, the woefully slow and derelict MV Tobago was the only ferry service between both islands, and the MF Gelting and the MF Teisten were chartered to operate alongside.

A project that should have lasted no more than 12 months ended up taking five years, and it was in 1987 that the new National Alliance for Reconstruction (NAR) Government took delivery of the ferry at a cost of $114 million.

By 2004, following a series of shut-downs and engine failures, the Panorama was dry-docked in Curacao at a cost of $2.5 million. No repairs were done and the ship was left to deteriorate after being towed back to Trinidad.

The Condor 9 was contracted to fill the gap left by the Panorama and on 05 November 1994 made its first voyage to Tobago. The journey time was estimated at just over 2 ½ hours but could only transport passengers and was kept for three months.

By 2005, the then Patrick Manning-led PNM Government sold the Panorama off as ‘scrap metal’ for an undisclosed sum. The Panorama Captain, Alfred McMillan, subsequently left the PATT under questionable circumstances.

The MF Panorama is now operating routes in the Greek Isles and is said to be in excellent working condition.

In December 2000 the then Basdeo Panday Administration chartered the MV Beauport, which was delivered with a passenger capacity of approximately 1000 and car capacity of 150. It was this ship that provided sea-bridge transport between Trinidad and Tobago until June 2005 when it was taken out of service.

By December 2004, The Cat was wet-leased from Bay Ferries Inc last December at a daily cost of US$23,800. TheMV Sonia was wet-leased at the same time from International Shipping Partners of Miami at a daily cost of US$24,000.

At that time, ICSL bid for the sea-bridge service contract offering a per-day cost of €15,000 (US$16,148) but the then PNM Administration rejected the bid.

Still in office, the PNM Government, through then Works and Transport Minister, Colm Imbert, purchased the MV Su in 2008 for $25 million. The Su never sailed and despite its cost, the then Government had to spend some $27 million more on repairs and maintenance.

According to reports from previous Partnership Administration Transport Minister, Devant Maharaj, as of May 31, 2012 a total of TT$55 million had been spent in the procurement, repair and berthing of the MV Su.

In November 2011, Astralship conducted an evaluation of the value of the MV Su and pegged the re-sale value on the second hand market at between TT$332,000 and TT$644,000 based on its age and condition.

Miami Connection Limited was subsequently given approval to buy the MV Su for scrap iron for $548,800, just over two percent of the original purchase price of $25 million.

One captain

PNM boat and ferry scandals, however, did not stop there. By 2012, it was reported that more than $127 million was lost following the sale of water taxis that were purchased under the People’s National Movement (PNM) administration – the HC Milancia, HC Katia and the HC Olivia.

Sale documents on the water-taxi vessels showed that $133,310,513 was spent to acquire the vessels (including the MV Sonia), but only $6,038,265 being recovered from their sale – a loss of $127,272,248.

With the Galicia having been in contracted service for the two years, and the Rowley PNM knowing for over a year that it would not renew the contract, the same Captain Alfred McMillan appears to have resurfaced.

It was reported recently that former PATT Chairman, Christine Sahadeo, commissioned a report from Captain McMillan of Magellan Maritime Services Ltd. This company is said to have been incorporated only three months before by McMillan and his daughter.

McMillan was asked by former chairman of the Port Authority to give his views “on the MV Galicia used by the Port Authority of Trinidad and Tobago (PATT) for cargo handling between Trinidad and Tobago.” The report is said to have identified six shortcomings of the vessel and recommended that it be replaced.

With questions still surrounding the sudden and unexpected resignation of Sahadeo as PATT Chairman, further questions remain unanswered as to whether Magellan Maritime Limited was awarded a contract without tendering in excess of $220 million since August 2016 to manage the sea-bridge and all issues related to passenger and cargo sea transport between Trinidad and Tobago.

$$ no problem with the PNM

By 14 June 2006, the ‘Warrior Spirit’ replaced the MV Sonia with a capacity of 120 passengers, 146 trucks and 150 cars. The Warrior Spirit was primarily for cargo transport.

This contract was also awarded without tender, and with a CharterParty agreement that contained NO TERMINATION CLAUSE. What this meant for the then PNM Government was that the contract amount would have to be paid whether the Warrior Spirit sailed, or was impounded due to engine or technical problems.

The vessel was leased from International Shipping Partners (ISP). This is the same company that leased the Soniaand the Beauport.

The Warrior Spirit cost Trinidad and Tobago US$14,000 per day. However, the contract compelled the Trinidad and Tobago taxpayer to meet the costs of the sea-bridge service even if it was not provided, without the possibility of breaking the contract, and without compelling the service providing company to foot the cost of replacement parts or maintenance.

Then Works and Transport Minister, now Finance Minister Colm Imbert has to date been silent on the issue of the sea-bridge and the history of scandalous over-payments, corrupt dealings and wasted millions.

Keith Rowley, as head of Government, has however not remained as silent, choosing to attack the business community for condemning his Administration’s decision to use a temporary barge service to fill the Galicia’spassenger and cargo transport capacity.

Corruption?

What’s more, despite having frustrated Public Procurement legislation as Leader of the Opposition, Rowley told a radio station that there was “public criminal conduct”, adding: “What has happened is that people have been the beneficiary of largesse that they found coming their way because of improper procurement procedures.”

Rowley did not actually say what criminal conduct there was, or why, if there was such conduct, his Government failed to act in almost 20 months of office.

What Rowley also did not say was that the process being used for the sea-bridge service is a “selective tendering process” which pre-selects certain firms and excludes the possibility of a local, Trinidad and Tobago firm winning the contract.

A TTWhistleblower source said such a tendering approach, in a time of economic downturn and struggling businesses is tantamount to slapping the business sector in the fact while it is on its back.

Rowley has also avoided speaking about claims of a more than $220 million contract to manage the sea-bridge given to former Panorama Captain McMillan’s Megellan Martime Limited.

In almost 20 months, Rowley has made no move whatsoever to implement procurement legislation completed by the previous Government, or review corporate governance codes to ensure that past ferry corruption is not repeated.

This has exacerbated growing suspicion of corruption, since Rowley’s view differs from his Works and Transport Minister, Rohan Sinanan, who said: “The Galicia’s size required a dredged port which would cost $50 million plus $20 million annually.”

According to well-placed sources, the Port of Spain port has developed a natural, gradual dredging due to the high volume of sea traffic entering and leaving the port.

Sinanan further complicated the reasoning behind the termination of the Galicia by claiming that ferry has caused between US$200,000 to $300,000 in damages by berthing at the Hyatt waterfront.

During the last budget debate, where issues such as these would be discussed in the Standing Finance Committee, the issue was not raised.

That notwithstanding, ICSL offered to build light dredging and maintenance works for the Port of Port of Spain into its sea-bridge contract in the area of the turning basin and berthing jetty for $36 million annually; $14 million less that Sinanan’s claim. This was never acknowledged by the Rowley Government.

Whither Tobago?

As the intrigue thickens, update reports in the daily newspapers of 20 April 2017 indicated that the Atlantic Provider has been selected to provide sea-bridge transport.

According to reports, the daily rent of the MV Provider, which is scheduled to make its first sailing on Sunday, will be US$14,500 (TT$97,150) while the Transporter will cost between US$8,000 and $10,000 (TT$53,000 to $67,000).

This is despite ICSL’s offer of the Elizabeth Russ for passenger and cargo services at US$13,700 per day.

So while Tobago suffers for suitable sea transport, it is yet to be clarified whether the termination of the Galicia was due to size, spite or preference.

And the Prime Minister appears to be more at odds with his Cabinet and his State Board appointees than ever before, leaving a declining nation and anxious population still searching for leadership.

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