VZCZCXRO5046
RR RUEHGR
DE RUEHSP #0444/01 2741330
ZNR UUUUU ZZH
R 301330Z SEP 08
FM AMEMBASSY PORT OF SPAIN
TO RUEHC/SECSTATE WASHDC 9427
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHDG/AMEMBASSY SANTO DOMINGO 2631
RUEHSJ/AMEMBASSY SAN JOSE 0494
RUCNCOM/EC CARICOM COLLECTIVE
RHMCSUU/DEPARTMENT OF ENERGY WASHINGTON DC
RUEAWJA/DEPT OF JUSTICE WASHDC
RUEANHA/FAA NATIONAL HQ WASHDC
RUBDPLA/TSA HQ WASHINGTON DC

UNCLAS SECTION 01 OF 03 PORT OF SPAIN 000444 
 
SIPDIS 
 
SANTO DOMINGO FOR REGIONAL COMMERCIAL OFFICE 
SAN JOSE FOR REGIONAL ENVIRONMENTAL HUB 
 
E.O. 12958: N/A 
TAGS: ECON ETRD EFIN EINV EAIR SENV ENRG KIPR SOCI TD
 
SUBJECT: TRINIDAD & TOBAGO ECONOMIC HIGHLIGHTS FOR MID-AUGUST THROUGH 
MID-SEPTEMBER 2008 
 
The following were notable economic issues in Trinidad & Tobago during 
the second half of August and first half of September. 
 
¶1. US$2.3 billion plastics deal signed with Europeans 
¶2. Hill International wins $285 million project 
¶3. T&T faces labor shortages 
¶4. GOTT increases infrastructure borrowing authority 
¶5. NGC benefiting from high Methanol Prices 
¶6. GOTT gives CAL tax exemption 
¶7. Yachtie fuel crisis resolved 
¶8. Flow signs agreement with TBS 
¶9. GOTT to curb DVD piracy through regulation 
¶10. Committee formed to protect T&T's plant varieties 
¶11. T&T's Green Fund to begin issuing grants 
¶12. Eight industrial parks planned for T&T 
¶13. T&T appoints new Regulated Industries Commission 
 
¶1. US$2.3 billion plastics deal signed 
-------------------------------------- 
The GOTT signed a deal that will bring US$2.3 billion in Foreign Direct 
Investment from German and Netherlands-based companies for the 
construction of an integrated polypropylene complex.  This investment 
represents the largest inflow of FDI for a single project in T&T's 
history.  A joint venture between LyondellBassell (a Netherlands-based 
company wholly owned by U.S. conglomerate Access Industries) and Lurgi 
of Germany, this facility is slated to come on line by 2012 and will 
provide inputs for manufacturing plastic goods.  GOTT-owned National 
Gas Corporation and National Energy Corporation are the other parties 
to the deal.  Coming just 8 months after the companies signed an MOU, 
the polypropylene project has leapfrogged ahead of another plastics 
proposal, from Westlake Chemical of the U.S. to build a polyethylene 
complex.  Westlake signed an MOU in mid-2006, anticipating investment 
of $1.5 billion, but has not yet finalized a deal.  Speaking at the 
signing ceremony, PM Manning emphasized the potential benefits of a T&T 
plastics industry for manufacturing in other Caribbean countries and 
reiterated his support for regional integration and the EU-CARIFORUM 
Economic Partnership Agreement. 
 
¶2. Hill International wins $285 million project 
--------------------------------------------- -- 
New Jersey-based construction management firm Hill International 
announced its selection by the GOTT-owned Housing Development 
Corporation to design and construct a residential/commercial 
development in South Quay, Port of Spain. The project, valued at US$285 
million, is the first phase of a GOTT urban renewal effort in troubled 
east Port of Spain. The award to Hill represents the first time in a 
decade that a U.S. firm has won a GOTT-funded construction project of 
this magnitude, even as firms from China, France, and Canada have won 
contracts worth billions. 
 
¶3. T&T signs labor MOU with El Salvador 
,--------------------------------------- 
The GOTT signed an MOU with El Salvador to facilitate Salvadorans 
working in T&T.  With more than 40,000 open positions and less than 
25,000 job seekers, employers in T&T are facing shortages.  According 
to businessmen, they must compete for labor with government training 
and "make work" programs.  Taking a more positive view, the government 
argues labor shortages reflect a booming economy.  Unemployment is 
estimated at 4.3 percent. 
 
¶4. GOTT increases infrastructure borrowing authority 
--------------------------------------------- ------- 
The GOTT recently proposed an increase in its borrowing threshold under 
the Development Loans Act from TT$13 billion (US$2.2 billion) to TT$20 
billion (US$3.3 billion).  The new funds will be channeled towards 
infrastructure investments in water, electricity and mass transit. 
 
¶5. NGC benefiting from high Methanol Prices 
,------------------------------------------- 
The National Gas Company (NGC) announced it is benefiting from high 
methanol prices.  In the past 24 months, methanol prices have increased 
from US$300 to US$700 per ton.  The rising price is driven largely by a 
surge in demand from emerging markets like China.  T&T is the world's 
largest exporter of methanol. 
 
¶6. GOTT gives CAL tax exemption 
------------------------------- 
As part of the Income Tax Amendment of 2008, passed in early September, 
the GOTT granted Caribbean Airlines (CAL) exemption from withholding 
 
PORT OF SP 00000444  002 OF 003 
 
 
taxes on its lease payments for a period of two years, beginning 
(retroactively) on January 1, 2007, saving the company TT$25 million 
(US$4.2 million) tax exemption. This measure is likely to increase the 
debate over Caribbean Airlines' financial viability.  Critics allege 
the GOTT is "secretly" subsidizing CAL's purchases of jet fuel. 
 
¶7. Yachtie fuel crisis resolved 
------------------------------- 
Two weeks after T&T Customs and Immigration cracked down on the sale of 
subsidized fuel to foreign flagged vessels, authorities gave permission 
for a boat yard in Chaguaramas to sell fuel at the international price 
to foreign flagged vessels.  The controversy erupted when T&T customs 
officials received reports that vessels were buying subsidized fuel in 
T&T and selling it at a profit in the British Virgin Islands. 
Authorities prohibited the sale of subsidized fuel to foreign vessels 
but failed to give permission to sell fuel at the international price. 
As a result, boat yards were forced to refuse fuel to the foreign 
vessels, leaving them stranded in T&T. While the new arrangement, 
worked out with a push from the Embassy, solved the immediate issue of 
fuel availability, it has sparked debate about the impact of the price 
increase on the yachting sector, a target growth industry for GOTT. 
With fuel now four times higher for foreign flagged vessels, there is 
concern that T&T will be a less attractive destination, thus stifling 
the development of this promising sector. 
 
¶8. Flow signs agreement with TBS 
-------------------------------- 
Columbus Communications, parent company of T&T's cable television 
company Flow, recently signed an agreement with Turner Broadcasting 
System Latin America to offer two new channels, Space and ISAT.  This 
agreement follows a deal with HBO Latin America last year that 
legitimized a wide variety of previously pirated channels.  While some 
pirated channels remain in Flow's lineup, the company is in 
negotiations with CBS. 
 
¶9. GOTT to curb DVD piracy through regulation 
--------------------------------------------- 
The Ministry of Legal Affairs announced the formation of a 
Cabinet-appointed committee to make recommendations on regulating the 
DVD industry in an effort to decrease piracy.  Chaired by lawyer and 
former Opposition Senator Gillian Lucky, the Committee will make 
recommendations on how to ensure adherence to copyright laws by DVD 
vendors.  In May, the GOTT passed the Copyright Amendment Act which 
strengthens IPR enforcement and prosecutorial capabilities.  The 
formation of this Committee represents the first visible effort by the 
GOTT to push ahead with implementation of this law. 
 
¶10. Committee formed to protect T&T's plant varieties 
--------------------------------------------- -------- 
The Ministry of Legal Affairs recently announced the formation of a 
Cabinet-appointed committee to make recommendations on species to be 
listed under the "Protection of Plant Varieties Act 1997."  T&T is home 
to a wide variety of plant species, including high quality cocoas and 
year-round yield pigeon peas.  By protecting these species, T&T hopes 
to protect the genetic diversity and capitalize on the market potential 
of these plants. 
 
¶11. T&T's Green Fund to begin issuing grants 
,-------------------------------------------- 
Established in 2000 to support community efforts to preserve the 
environment, the Green Fund is scheduled to finally begin issuing 
grants this year.  The GOTT levies a 0.1 percent tax on the gross sales 
of all businesses operating in T&T to support the Fund, which currently 
holds TT$1.4 billion (US$230 million). Up until recently, the GOTT was 
working to put the organizational structure and financial mechanism in 
place to operationalize the Green Fund. 
 
¶12. Eight industrial parks planned for T&T 
------------------------------------------ 
Evolving TecKnologies and Enterprise Development Company Ltd (E-Teck) 
announced plans to create eight new industrial parks on 1,066 acres of 
land.  These parks are designed to encourage light industry and help 
diversify T&T's economic base.  E-Teck is a special purpose public 
company charged with managing non-energy industrial parks and 
attracting investment into non-traditional sectors.  T&T currently has 
17 industrial parks with 500 tenants. 
 
¶13. T&T appoints new Regulated Industries Commission 
--------------------------------------------- ------- 
 
PORT OF SP 00000444  003 OF 003 
 
 
Minister of Public Utilities Mustapha Abdullah Hamid recently announced 
the members of the new Regulated Industries Commission.  The six-member 
board is chaired by Ian Welch, managing director of PCS Nitrogen.  The 
Board is responsible for promoting high quality utility services at 
fair rates. 
 
AUSTIN