Mirant
should be no surprise
By Energy Correspondent
Trinidad Express
Caracas
Petroleumworldtt.com
05 06 07
The announcement by Mirant Corporation that it
had a buyer for its Caribbean assets should have
come as no surprise. It was nine months ago- 11th
July 2006 to be exact, that Mirant announced its
intention to sell off its Caribbean assets. Yet
when the announcement was made that Japanese multinational
conglomerate Marubeni had agreed to purchase Mirant
for US$580 million, there was more than a hint
of surprise coming from the politicians in the
Caribbean.
In
Trinidad, the Public Utilities Minister asked
in public why T&TEC did not buy the shares
of Mirant. In Jamaica, Energy Minister Phillip
Paulwell hoped that "the change of hands would
be smooth and that the national interest will be
preserved".
After nine months of warning we appear to remain
underprepared. But isn't that typical of us? Was
the World Cup team prepared?
When Mirant made its announcement last year, I
suggested the following:
"Mirant's
pull out presents an excellent opportunity for
the Governments of Trinidad and
Tobago and Jamaica to place part ownership of power
generation assets in the hands of Caribbean people.
One
way to proceed is for the Government of Trinidad
and Tobago either directly or through a consortium
of state and private sector capital to pursue the
purchase Mirant's entire Caribbean holdings. For
example, the National Gas Company should have a
keen interest in pursuing this as a growth opportunity
given the close historic relationship between natural
gas and power generation in Trinidad and plans
to sell LNG to Jamaica. Following acquisition and
any necessary restructuring, at least 51 per cent
of the company should be further divested to Caricom
firms and nationals" (Business Express 19th
July 2006)
It is not known whether any of this was considered
either individually or collectively by the respective
Governments. Given the LNG spat between Trinidad
and Jamaica, my guess is that no such proposal
could have made its way to the table. But there
are other reasons why Minister Penelope Beckles
should not be surprised at the turn of events.
Firstly,
the Government of which she is a member has no
record of proactive offensive takeovers.
While the state purchased assets of foreign corporations
in energy, agriculture and finance in the seventies,
all acquisitions, in my recollection, were defensive
and reactive. More often than not the driving force
has been the need to "save jobs".
Secondly, since the years of structural adjustment,
the Governments of Trinidad and Tobago have embraced
the Washington sponsored economic philosophy that
the state should not invest directly in productive
enterprises but should merely be a facilitator.
The Government seems to have adhered slavishly
to this position, except of course in the case
of BWIA and Alutrint Aluminum smelter.
Thirdly, the Minister should know that Boards
of State Enterprises do not make independent decisions
but instead attempt to second guess what the Government
wants. Given these circumstances any move to purchase
the assets of Mirant would have had to come directly
from the Cabinet or more properly from the Prime
Minister himself.
It is pointless crying over split milk. The deal
is done. We must now look to see what benefits
Trinidad and Tobago may derive from the coming
of Japanese. Marubeni is indeed a very interesting
prospect. Established as a textile manufacturing
firm in the middle of the nineteenth century (1858),
Marubeni has now grown to be a substantial global
corporation.
In
2006, Marubeni had net assets of US$41.3 billion,
sales of US$81.6 billion. The firm generated net
income of US$1.1 billion. The company is involved
in a wide range of sectors including minerals and
mining, chemicals, energy, textiles, power ICT,
and finance. Historically, T&T has not been
a popular destination for Japanese equity capital.
However, its involvement in high value downstream
aluminum products for the computer industry, the
construction of Monorail systems and the all aspects
of the LNG business should be of particular interest
to Trinidad and Tobago. Could we capitalise on
these interests? We shall see!
Feedback: energyczartt@yahoo.com
Trinidad
Express
Wednesday, May 2nd 2007
Copyright
©2007 Trinidad Express. All Rights Reserved.
