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RUCNCOM/EC CARICOM COLLECTIVE

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 
 
PORT OF SP 00000236  002 OF 003 
 
 
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 
 
PORT OF SP 00000236  003 OF 003 
 
 
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