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Columns

Why fight the LNG plan?

Mark Wignall

Thursday, July 08, 2010



THERE is nothing as political as politics, especially when an organisation or elements within it turn upon itself and attempt, like termites, to eat away from within the entity.

Recently the Office of the Contractor General made a surprise "raid" on the offices of the PCJ. The sudden investigation gave many the impression that shenanigans were taking place with the highly publicised LNG energy plan and the bidding process which awarded Exmar Consortium the go-ahead to roll out its proposed LNG facility by early 2013.

The consortium partners are Exmar NV, a Belgian diversified and independent gas shipping and offshore group specialising in the transport of gas such as LNG and LPG; Promigas, a Colombian outfit which is in the business of LNG transportation and distribution and telecommunications; and CLNG, a special-purpose Jamaican company whose business will be to assist the Exmar Consortium in the development of an integrated LNG infrastructure and delivery project in Jamaica.

My information is that the anonymous information package that was passed on to the OCG and sections of the media came from within the PCJ and one source told me, "We are not ruling out that it came from within the PCJ Board appointed by the JLP government."

The question is, why would this be so when the procurement process last year had been monitored by the OCG and that entity was afforded every opportunity to operate with sufficient oversight of the process, down to bid opening?

The "anonymous" informant had loosely pieced together bits of information in a crude bid to create the impression that something untoward was afoot. To me, the conspiracy had as its primary objective destabilising Minister James Robertson who is currently presiding over two of the largest and most important private investment packages seen in Jamaica over the last 30 years.

Let us call a spade a spade, not a spoon. There are some people in corporate Jamaica and in other places who simply do not like James Robertson. Frankly, whether I happen to like the minister or not ought to be immaterial, if more than some good seems to be coming out of his ministry.

It ought to be plainly stated also that I am a great admirer of the work of Greg Christie, the contractor general, and his hard-working and highly efficient staff. The OCG must be commended for its zeal in its work but at the same time Mr Christie must know that others will use that very zeal for narrow political purposes. Certainly the OCG cannot respond to every "anonymous" tip, dubious or otherwise. That said, it appears to me that in the present instance the information passed on to the OCG was effected with the sole purpose of embarrassing the mining and energy minister.

But it also indicates that at a certain level there is infighting in the JLP.

Some of those critics of the plan seem to have made it their secondary mission to target CLNG, the local partner.

Made up of eight highly successful Jamaicans and one foreign partner, somehow they are seen as too successful, and that is something to be frowned upon in our neck of the woods. It ought to be known that it is nothing less than a requirement that whenever large companies (like Exmar Marine NV and Promigas) engage in large projects in countries like Jamaica, local participation or partners must be part of the deal. In that regard, CLNG has already spent more than US$1 million to engage the services of top engineering firms like Bechtel Corporation and the very best lawyers specialising in work of this nature.

The rationale behind local partnership, small though it may be in relation to the overall proposed investment, is that local partners must prove that they are not averse to risking their own funds, that they have more than just a "chat" in the project before the major foreign players enter. That is just plain horse sense.

As I understand it, all the money spent so far by the GOJ is either grant-funded by the World Bank and/or being taken up through the PetroCaribe funds. Basically, therefore, what Minister Robertson is riding on is his political horse and he ought to be congratulated whether we like him or not. We know, however, that successive governments have proved that their word is to be lightly taken so we will be holding the minister to his word and questioning him at every opportunity.

Let me reiterate for the critics. This investment is a purely private one and represents the largest investment in this area in the last 30 years. Why are more of us not lauding it?

LNG criticisms

One man who claims knowledge of the workings inside government wrote to me and said, "I am not arguing against LNG but the manner in which it is being handled. Some people are set to make a great deal of money perhaps at Jamaica's expense and without transparency."

In a July 3, 2010 column, "Talk is cheap! Is LNG?", Marcia Forbes who was recently permanent secretary in the Energy and Mining Ministry wrote, "Soon after I had resigned as permanent secretary in the Ministry of Energy and Mining, I engaged in a conversation regarding LNG. Having expressed concern in the manner it was beginning to be positioned to Jamaicans, with focus entirely on pricing, I opined that a better strategy was to spell out its environmental advantages. I was concerned that based on everything I had learnt about LNG, by the time it became available to the householders of Jamaica, light bills would perhaps not actually be reduced to the extent they were led to believe would happen."

She also said in her column, "Paulwell questions the extent to which the bauxite sector, a key stakeholder in supporting the LNG initiative, is 'on board', meaning not just word-of-mouth support but a signed commitment."

It is accepted that if Jamalco, the largest proposed user with JPS second, is not fully up to 100 per cent capacity by the time LNG is proposed to be ready, early 2013, the programme will prove to be unviable. It is therefore incumbent on Jamaica that the deal with Zhuhai Hong Fan Trading of China for the sale of Government of Jamaica's share in Jamalco be completed as proposed.

Most of the criticisms impute some "inside deal" but so far, none has been revealed. I invite those who claim to have such information to link with me.

observemark@gmail.com



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COMMENTS (15)

howie J
7/9/2010
Two reasons for fighting the LNG plan:
[1] War with Iran could triple price.
[2] Never enable the bad guys to continue destroying mother earth. Here I am taking about shale gas extraction by hydraulic fracturing or fracking. See http://gaslandthemovie.com/whats-fracking/

Peter Lawrence
7/9/2010
Asking questions is not trashing Min. Robertson or LNG. Why does every little thing have to be cloak and dagger AND SO OPAQUE in Jamaica. There are questions re insider trading& so, conflict of interest in Carib LNG. What about other major, offshore ,shareholders!!! LNG may be cheap now but it is subject to price fluctuations and Jamaica is a mini player which claims absolutely NO known reserves? am I right?
Diverse energy policy should be a priority in our sunny isle. Speaking of sun...
Tracey Barnes
7/9/2010
Are we really serious, is it that we just want to see a project;a project that would help our country out of debt and help to reduce people's bills fail?
We must not be selfish!!
howie J
7/9/2010
Ms. Forbes you missed the point. Mr. Howard’s letter was generated from your amateurish attitude to a very serious issue. As he puts it, you were “as flippant on matters as serious as the future energy prospects of Jamaica. To say her analysis of the issue was simplistic would be to put it mildly.” I concur with his assessment.
Eric Thor
7/9/2010
Smokescreen and parlour tricks. Like bauxite and oil (in other countries) this deal will probably only benefit a few highly placed individuals. Marcia Forbes is correct in being skeptical about the supposed benefits to Jamaica. I would like Robertson to also put as much energy into following thru on comprehensive energy policy ie alternative energy especially wind and solar and improving efficiency. We Jamaicans are energy gluttons, we simply cant afford it.
wilfred hermitt
7/8/2010
Mark is really an expert at taking through the both side of your mouth

7/8/2010
Why not ask NZ to build a MTG plant.
Marlon Dyer
7/8/2010
This article raises important questions that most be answered! What is the motive of those who opposed to LNG? Clearly based on all I read regarding this issue, the procurement procedures were duly adhered to. Can people be so malicious they would rather see the country in debt, to impose their agenda? Can people be so selfish they would rather see the LNG project fail, as they do not benefit? Are we to believe that real money should only be made by a selected few? Who determine these selection?
gary lee
7/8/2010
Ethanol is being put on the back burner why?
Mark Forbes
7/8/2010
Mark, I don't believe you can be impartial when it comes to Robertson,Vaz and Montague. Case in point: why promote the usage of LNG as Robertson's brilliant idea since he became minister. We have all heard it at least since Paulwell was at MM&E. Robertson is just lucky that it might be more feasible under his watch.
When it comes to you, Robertson and GChrist, I know who I trust.
Wa Tch
7/8/2010
Sunday's Observer editorial stated:
"records of the Registrar of Companies of Jamaica show Mr Moore as director of Caribbean LNG (Jamaica) which was incorporated in Jamaica on June 19, 2009, approximately seven months after he demitted office as chairman of the .. (PCJ)"and "..the major problem . is in the OCG's claim that the LNG procurement process was initiated in in April 2007. At that time, Mr Moore was still chairman of the PCJ."
Not a baseless imputation Mr. Wignal!
Marcia Forbes
7/8/2010
Thank you for referencing my article, Talk is Cheap! Is LNG?, in your balanced piece. The Observer has skillfully positioned a letter from a writer questioning my motive for writing that piece. It's strange that although I clearly stated my overall support for LNG, as you repeated, that writer makes all sorts of spurrious charges.
We must hold our political leaders accountable. My concern is that with so many uncontrollable variables, LNG may not end up being as cheap as we are being sold.
denise harrison
7/8/2010
Here is something that promises to benefit every Jamaican, and create much need jobs. So why ohh why are we trying to destroy the people and the funds already spent? Can we leave all the comments to the experts in this field.
This is Jamaica's problem, "ITS NOT DUDUS OR JUST CRIME" it is the "tear down" mentality. Aren't we mature enough as a country to want to see and do better. And you wonder why investors only want tourism projects.
Hugh Maxwell
7/8/2010
Greg Christie cannot do otherwise, than to move on to 'every appearance evil' whether it be for political motive or not of others bringing things to his this attention so be it. He should not take on the job to determine whether some things is for political motive or not. If he should then his office could be seen biased. No way Mark..leave out Greg out of this completely! Yes he can respond to every anonymous tip, that is where "things" usually starts from. Things will eventually play out!!!
JA Cynic
7/8/2010
May be the fight is not aimed at the plan but some of the central movers & shakers involved.
JA Cynic

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