HUNDREDS of millions of dollars invested in projects related to the construction of the Alutrint smelter at La Brea, hundreds of jobs associated with the project and the reputation of the Government of Trinidad and Tobago have all been placed in jeopardy by the quashing in April, of a Certificate of Environmental Clearance for the project, the Court of Appeal has been told.
An affidavit filed on the company's behalf by its chairman Leroy Mayers, presents a litany of woes for the project, arising out of the decision of High Court judge Justice Mira Dean Armorer, to quash the CEC, which the Environmental Management Authority granted to the company in April, 2007.
Mayers filed the affidavit in his capacity as chairman of Alutrint, but in the document he listed the several other hats he wears in relation to the integrated arrangements associated with the project.
In it he said he was also Permanent Secretary in the Ministry of Energy and Energy Industries.
He is also a member of the board of directors of Trinidad Generation Unlimited, the company constructing a power plant which will support the smelter project.
Further, he is also on the board of the National Energy Corporation whose mandate the affidavit states, "includes the construction, operation and management of industrial estates, ports and marine infrastructure that serve the country's energy industry".
The NEC is a wholly owned State enterprise.
The Alutrint smelter project is to be located at the Union Industrial Estate, La Brea and an industrial port is being developed as part of the enabling environment for its operation.
The affidavit was filed on July 7 as part of the EMA's appeal against the judgement delivered on June 16.
Going over the history of events beginning with the granting of the CEC, Mayers listed 13 developments associated with this integrated project, some of them taking place up to the day before the court order was delivered.
These include the signing of a land lease agreement between Alutrint and the NEC and a gas sale contract with the NGC.
It said "final negotiations" were in progress at the time of the court order on a pier user's agreement between the NEC and Alutrint, for use of facilities at Brighton and for a water supply agreement with the Water and Sewerage Authority (WASA).
He said also there was "satisfactory completion" of conditions prescribed by the CEC, but this is a point being challenged by those who sought the cancellation of the CEC.
And the affidavit said there had been an expansion by recruitment of skilled employees, "in anticipation of imminent and aggressive start of construction" of the plant.
The judge's decision to quash the CEC has effectively halted all of these developments.
Associated with the cost of the smelter plant, Mayers argued in the document, a US$400 million loan was being negotiated with the Exim Bank of China.
Agreement on a line of credit for US$300 million was signed on June 25.
A concessionary loan agreement for US$100 million was signed on May 19 and the Government was preparing to draw down US$85.5 million of this by June 30.
The Government had also already committed to pay US$1.5 million for "commitment and management fees" and a further US$17.56 million for "loan finance insurance".
The CEC is required as one of the "conditions precedent" to these transactions, the affidavit stated, adding that "accordingly, timely receipt of major project funding at concessionary rates has been jeopardised".
Arrangements for all the other associated projects, including the pier user facility the water supply contract, the land lease contract and the gas sales contract "have all been overtaken by the judgement delivered on June 16", the affidavit stated.
Listing a further set of hazards likely to result in the expected delays to the plant construction, Mayers further stated that a manpower supply contractor had already placed a work force of some 200 persons from China on the site, with a notice to proceed with the relevant works scheduled to be issued in mid July.
"This start date is critical to the project achieving its completion date of August 31, 2011," the document stated, arguing that the decision to quash the CEC has resulted in the halting of works pursuant to the CEC on site.
Included in this jeopardy list, the document argued, the contracting company has already claimed it will incur losses of US$3 million for each month there is no progress with the construction.
It further advised Alutrint on June 21 that soil compaction works which had been in train, will pose a significant environmental risk if left unattended.
Undrained, loose soil would be driven into the Vessigny River when the rainy season begins and months of work would become undone if the site were left open.
Still further, the contracting company was seeking immediate payment of US$16 million to secure aggregate from a Canadian supplier for scheduled works.
Should this payment not be forthcoming, significant delay could result with the onset of winter conditions.
Shipments from Canada could be prevented, it has been argued.
Regarding works on the port facilities, some US$57 million had already been spent and the works were 40 per cent complete.
Anticipated user fees pursuant to that agreement could be denied if the smelter is not commissioned on time or not at all.
This will result in a loss of revenue to the NEC, Mayers argued.
On the critical issue of the power plant, he argued: "Even if the smelter is not operationalised in July 2011 when the power plant starts running, Alutrint and T&TEC will still have to pay for the electricity the plant generates.
"Alutrint's failure to achieve its scheduled completion will result in the imposition of monthly penalties if power is not taken as from October 2011. Should the smelter not be completed on time, T&TEC will not be in a position to use the 240 megawatts dedicated to Alutrint."
In addition, he said, investments made in training and tooling persons at La Brea and surrounding communities for employment in the variety of areas to be opened up will be wasted "and the expectations of hundreds of citizens for employment will be disappointed".
Related to these projected opportunities Alutrint had already paid $1 million in annual subscription to the National Energy Skills Centre.
The document said there was an expectation that 1,200 direct long term jobs would have been generated, with a further 3,000 indirect jobs coming from such services as transportation, machine shops, fabrication shops, motor repair, office and safety supplies and a host of others.
Sizing up these and other projected negative outcomes, Mayers contended that Alutrint was "gravely prejudiced by the judgment", coming at this stage in the life of the project.
This represented a "catastrophic impact" on not only the construction of the aluminium smelter but the other related projects on which millions of dollars have already been expended to date and are committed to be spent.
"Binding contracts have been entered into which impact on the international reputations and credibility of not only Alutrint but the other State enterprises and by extension the Government of the Republic of Trinidad and Tobago.
"A substantial number of persons have been employed on the basis of the CEC which has been in force for more than two years. Further, any delays which result in failure to continue the works in a timely manner so as to achieve the scheduled completion date will result in significant financial losses not only to Alutrint but to the Government and the other State enterprises," he concluded.
